Suzano S.A.

The year 2025 was characterized by heightened geopolitical tensions and a challenging macroeconomic environment. In this context, the pulp market was notably affected, particularly in the first half of the year, due to uncertainties surrounding tariff policies. This environment influenced market sentiment, prompting caution among buyers and putting pressure on pulp prices. During the second half of 2025, the impact of these measures became more clear which, along with the exclusion of pulp from the U.S. tariff scope, contributed to a gradual improvement in industry sentiment and, combined with other factors, supported the rebound in hardwood pulp prices.

The Chinese market, in particular, showed mixed tendencies throughout the year. At the beginning of 2025, prices followed an upward trend, reflecting the temporary exit of a major integrated paper producer, which also produces and supplies pulp for their operations. From the second quarter onward, hardwood pulp prices approached US$500 per tonne, due to buyers' hesitation in the face of macroeconomic uncertainties and due to increased inventory consumption. This led to a postponement of new orders, with volumes gradually recovering as prices adjusted. From the third quarter onward, as regulatory policies became more clear, we observed a resurgence in demand, accompanied by an increase in Brazilian hardwood pulp exports to China compared to 2024. The fourth quarter was characterized by seasonal factors related to preparations for the Chinese New Year, which resulted in a decrease in pulp inventories at ports and an increase in paper production compared to the third quarter, particularly in the paperboard and printing & writing segments.

In Europe, according to annual data from Utipulp, consumption of hardwood pulp remained consistent with that of the previous year, while softwood pulp consumption declined by 10%. This trend highlights the ongoing fiber substitution, driven by our leadership and the widening price gap between the two fiber types. The sanitary paper segment demonstrated greater resilience throughout the year, whereas printing & writing papers continued to face pressure. In the second half of the year, the appreciation of the euro against the U.S. dollar increased cost pressure on European producers, influencing decisions on production downtimes and contributing to gradual adjustments in supply. In North America, the sanitary paper market remained robust throughout 2025, despite uncertainties stemming from tariff policies.

Regarding supply, the year was marked by a gradual adjustment process. The market experienced unplanned shutdowns due to prevailing market conditions, conversion from paper grade pulp to dissolving pulp by a major producer with operations in Brazil, and Suzano's announcements of production reduction. These supply reductions, however, were still below expectations given the high production costs relative to the price levels observed throughout the year.

Our pulp net sales totaled R$37,816 million in 2025 (an increase of 1% compared to 2024). The share of pulp sales from exports was 95%, while the domestic market accounted for 5%. Concerning distribution for end use, the sanitary paper segment accounted for 64% of total sales in 2025, followed by Specialty Papers with 14% and Printing & Writing with 14%, packaging with 4% and others with 4%. APAC accounted for 48% of the net sales, followed by EMEA with 28%, North and South American countries (including Brazil) with 24%.

Our average pulp net price in US$ sold by Suzano in 2025 was US$542/t, 16% lower than in 2024. In the export market, our average net price was US$542/t, down 16% from 2024.