Suzano S.A.

The hardwood pulp market experienced different dynamics in each quarter of 2024 influenced by unplanned events, new production capacities, and changes in global economic conditions. The year began with paper production exceeding expectations and low pulp inventories, leading to a supply that fell short of demand and creating favorable conditions for price increases. As the months gone by, a gradual normalization of supply was observed, driven by the introduction of new capacities, despite unscheduled downtimes. The replacement of softwood pulp with hardwood pulp was a significant trend that gained even more traction in the final months of the year due to the widening spread between the prices of these fibers.

In China, the year began with high paper production across all segments, but papermakers faced tight margins and struggled to pass on the increased costs of pulp. In the second half of the year, the launch of new projects, such as Suzano's Ribas do Rio Pardo Unit and Liansheng in China, combined with a normalization of supply with fewer unplanned downtimes, resulted in a greater availability of hardwood pulp. This, coupled with the squeezed margins of papermakers, led to a decline in demand in China and a reduction in prices that began in August. At the end of the year, demand stabilized due to the strong pace of paper production and improved margins for paper producers, which were able to raise the prices of finished products due to the temporary exit of a major integrated producer of paperboard and printing and writing papers from the market.

In the European market, the consumption of hardwood pulp was influenced by seasonal factors and the crisis in the Red Sea, which affected the import of finished paper products, encouraging local paper production that, in turn, boosted the demand for pulp in the region. Following the first half of the year, when the demand for pulp in Europe surpassed expectations, there was a decline during the European summer, consistent with historical seasonal patterns. Subsequently, demand returned in the last months of the year due to the replacement of softwood pulp for hardwood pulp. In North America, the sanitary paper market remained healthy throughout the year, despite economic uncertainties and inflation.

With regard to pulp supply, 2024 was a year of gradual normalization following an initial period characterized by supply restrictions due to strikes in Finland and Chile, an earthquake in Taiwan, floods in southern Brazil, and accidents at facilities in Finland and Indonesia. The entry of new capacities in Brazil and China, along with the resolution of strikes and the reduction of rainfall in Rio Grande do Sul, contributed to a greater availability of pulp in the market during the second half of the year.

Our pulp net sales totaled R$37,593 million in 2024 (an increase of 23% compared to 2023). The share of pulp sales from exports was 94%, while the domestic market accounted for 6%. Concerning distribution for end use, the sanitary paper segment accounted for 61% of total sales in 2024, followed by Specialty Papers with 15% and Printing & Writing with 15%, packaging with 6% and others with 3%. APAC accounted for 41% of the net sales, followed by EMEA with 33%, North and South American countries (including Brazil) with 26%.

Our average pulp net price in USD sold by Suzano in 2024 was US$642/t, 7% higher than in 2023. In the export market, our average net price was US$644/t, up 7% from 2023.