Cash in the chain: terms, letters of credit and stock at ports

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No pulp producer we found states its payment terms in days. The one day count in our sources, 60, sits in a price assessment basis. This post follows the cash from mill to buyer and shows what a 90-day wait costs on one cargo.

Published October 27, 2026 · Facts as of October 27, 2026 · 10 min read · Sources listed at the end

Facts as of October 27, 2026. This page states the facts as they stood on that date. Figures, rules and company plans may have changed since publication. We review this guide every six months and update the pages.

36 daysThe Green Santos took 36 days to carry 72,000 tons from Santos to China in 2024, by our count of the two dates ¹

2.7 million tonsPulp in Chinese ports at the end of June 2026, as reported by Suzano ²

$16,140,000Value of a 30,000-ton cargo at $538 a ton, the 2025 China customs average for bleached hardwood (our calculation) ^14,15

$156,962Base interest on that cargo for 90 days at SOFR of 3.89% (our calculation) ¹⁴

The 60-second version

What is it?

Cash is tied up at every stage of a pulp trade: building the mill, the contract, the voyage, the port stock and the wait for payment. The payment terms set who waits.

Why does it matter?

Pulp moves in large cargoes. One ship carried 72,000 tons in 2024 ¹. When a buyer pays late or a bank does not issue a letter of credit, a large amount of cash waits.

How does it work?

The seller ships, the buyer pays by an agreed route, and the pulp may wait in port stock first. No producer we found states its terms in days, so each contract needs its own check.

Myth or fact?

"Pulp is sold on 60-day payment terms."

See the answer

Partly true. The number 60 appears in a Fastmarkets price assessment basis for North American exports to Japan: a 2% to 8% discount for cash payment or 60 days ⁴. That line describes how one price is assessed. No producer we found states its payment terms in days ^5,6.

In this post

1. Where is cash tied up in a pulp trade?
2. What payment terms do pulp sellers use?
3. What happens when a letter of credit is slow?
4. How much pulp waits at ports?
5. What does one month of waiting cost?
6. Which finance tools fit each stage?
7. What should a trader check before agreeing terms?

01Where is cash tied up in a pulp trade?

In 2024, the Green Santos carried 72,000 tons of Suzano pulp from Santos, Brazil, to China ¹. It left on March 4 and arrived on April 9. That is 36 days, counting the two dates ¹. Someone owns that pulp while it sails, and someone waits for payment after it lands.

The table follows the cash through six stages, using public sources. Each stage has a different holder of the cash and a different reason for the wait. For the full journey of one bale, see follow one bale.

Stages

Where the cash goes, stage by stage

Public information only. R$ is the Brazilian real. Dated examples are labeled.

Stage	What the sources say	Who waits for cash
Building the mill	Arauco closed US$2.2 billion of financing for its Sucuriú mill in Brazil on August 21, 2025, with IDB Invest, IFC and Finnvera 11.	Lenders and owners, for years before the first ton is sold.
The contract	Mercer says its pulp sales are "on customary industry terms" 5. In Asia, net prices follow discount talks usually held monthly 4.	Both sides, because discounts are usually negotiated again each month.
At sea	The Green Santos left Santos on March 4, 2024 and reached China on April 9 1. At the end of 2024, Suzano held R$1.51 billion of finished pulp outside Brazil 7.	The owner of the cargo, until it is sold.
At the port	Chinese ports held about 2.7 million tons and European ports 1.3 million tons at the end of June 2026 2.	Whoever owns the stock has money tied up until it is sold.
Payment	Suzano's foreign customers owed it R$7.09 billion at the end of 2024 7. Suzano says it assumes its customers' credit risk on credit sales 6.	The seller, until the buyer pays.
Letters of credit (dated examples)	In 2004, Chinese bank letters stopped and purchases of one New Zealand producer's pulp virtually stopped 8. In 2008, slow letters left pulp waiting at Vancouver 9.	Seller and buyer, until the bank acts.

02What payment terms do pulp sellers use?

No pulp producer we found states its payment terms in days. Mercer says its pulp sales are "on customary industry terms" and that it had no material payment delinquencies at December 31, 2025 ⁵. Suzano says that when it sells on credit, "we assume their credit risk" ⁶.

The size of that credit is large. At the end of 2024, Suzano's customers outside Brazil owed it R$7.09 billion. That was 77.6% of its R$9.13 billion in trade receivables (our calculation) ⁷.

One document does print a day count, and it describes a price. Fastmarkets' basis for North American pulp delivered to Japan includes a 2% to 8% discount for cash payment or 60 days ⁴. Fastmarkets also says its China assessments "assume normal and customary payment terms" ⁴. These lines describe the basis of price assessments. No source we found gives the days that producers allow their buyers.

In 2023, Fastmarkets reported that most buyers of Russian pulp and paper were traders, and that they paid by telegraphic transfer ¹⁰. Open account is a sale where goods ship before payment is due. No source we found says how much pulp is sold this way.

03What happens when a letter of credit is slow?

A letter of credit is a bank's promise to pay a seller when the right documents are presented. The public pulp examples we found are old. Both are dated examples, and neither shows current practice.

In 2004, Chinese state banks stopped issuing the letters needed to buy pulp. Executives of Carter Holt Harvey, a New Zealand producer, said that Chinese purchases of its pulp virtually stopped until banks resumed issuing letters in July 2004 ⁸. The ICC report described the bank step as an effort to cool the Chinese economy ⁸.

In 2008, Pulp and Paper Canada reported that a backlog of pulp at Vancouver was caused by the slow pace of Chinese buyers in opening letters of credit. The report said about 30% of British Columbia pulp went to China ⁹.

No source we found gives the share of today's pulp sales that use letters of credit. The two examples show one fact: when the buyer's bank is the link, cargo can wait for the bank.

04How much pulp waits at ports?

Suzano reports that Chinese ports held about 2.7 million tons of pulp at the end of June 2026. The level was in line with the previous quarter, and the stock was mostly softwood pulp ². Suzano does not name the provider of the figure or the ports it covers ².

Suzano reports that European ports held 1.3 million tons at the same date, still below the level considered normal ². EUWID reported European port stocks of 1.23 million tons in May 2026, almost 20% lower than in May 2025 ¹².

For an earlier count of two Chinese ports, Fastmarkets reported Qingdao and Changshu together at 2.07 million tons on June 23, 2025 ³. The two Chinese figures cover different ports and different years, so they cannot be compared.

Whoever owns this pulp has money tied up in it until it is sold or used. Buyers can also slow their orders. In August 2024, during a price slide, Fastmarkets reported that several buyers in China reportedly agreed to buy 50% of their July volumes ¹³.

Chart

Pulp stocks in ports, as reported

million tons. Sources: Suzano earnings release for 2Q26, end of June 2026 ²; Fastmarkets PPI Asia, Qingdao and Changshu on June 23, 2025 ³. The bars cover different ports and dates.

Suzano reports that Chinese ports held about 2.7 million tons of pulp at the end of June 2026.

05What does one month of waiting cost?

A worked example shows the base cost of waiting. Take a cargo of 30,000 tons at $538 a ton, the 2025 average customs value of bleached hardwood pulp imported by China, as reported by China ¹⁵. Customs values include freight and insurance. The cargo is worth $16,140,000.

The Secured Overnight Financing Rate (SOFR) was 3.89% on October 15, 2026, the New York Fed reports ¹⁴. At that rate, 90 days of interest on the cargo is about $156,962. That is about $1.74 a ton for each month (our calculation).

The formula is: interest = cargo value × 3.89% × days ÷ 360. Real financing costs add the lender's margin and fees. They also depend on the companies and the documents. The example shows the idea, and each deal has its own price. The same wait applies to working capital on stock at a port.

06Which finance tools fit each stage?

Each cash need has a matching tool in the Ossiano Trade Finance Guide. The cards below list common matches. The right choice depends on the companies, the country and the documents.

The timeline shows one documented cargo. The tenor of any loan should cover the whole wait, from shipment to payment. A producer paid in dollars that pays costs in local money also carries foreign exchange risk; Mercer says a stronger dollar generally benefits producers' margins ⁵. For loans to build mills, see financing a mega mill.

Where the cash goes

One cargo from Santos to China

1. Mar 4, 2024
   The ship leaves SantosThe Green Santos sails with 72,000 tons of Suzano pulp ¹.
2. Apr 9, 2024
   The cargo reaches ChinaThe voyage took 36 days, counting the two dates ¹.
3. After landing
   The pulp waits at the portChinese ports held about 2.7 million tons at the end of June 2026 ².
4. Payment date
   The seller is paidThe date depends on the contract. No producer we found states it in days ^5,6.

One documented voyage. Other routes and contracts have different timing.

The seller waits for the buyer to payReceivables finance

The seller gets cash against invoices the buyer owes.

The seller wants a bank to stand behind paymentLetters of credit

A bank promises to pay when the documents comply.

Pulp sits in port stockInventory finance

Financing for holding goods, usually with a security interest over them.

Pulp is stored in a controlled warehouseWarehouse finance

A loan secured by goods deposited in a warehouse.

The buyer may not payTrade credit insurance

Insurance that pays a seller most of an unpaid invoice after a covered event.

07What should a trader check before agreeing terms?

Five public facts shape the questions below: price is negotiated usually monthly in Asia, one voyage can take 36 days, stock can wait in port, a bank can delay a letter, and a seller can carry its buyer's credit risk. The checklist turns them into steps.

For price types, see two prices for one ton. For rules that change cost by grade, see the pulp watch.

Checklist

Six checks before you agree payment terms

• What are the terms, in days?Write the due date as days from shipment or delivery. No public producer source gives a standard.
• When will the buyer's bank issue the letter?If a letter of credit is used, agree the issue date. In 2008, slow letters left pulp waiting at Vancouver ⁹.
• What does the wait cost?At SOFR of 3.89%, base interest on $16,140,000 for 90 days is about $156,962, before margin and fees ¹⁴.
• Who owns the pulp at the port?Name the owner while the pulp sits in port stock. Chinese ports held about 2.7 million tons in June 2026 ².
• Who carries the buyer's credit risk?Suzano says it assumes its customers' credit risk when it sells on credit ⁶.
• Which month's price applies?Net prices in Asia follow talks usually held monthly ⁴. Name the month the invoice uses.

What this means for traders

• Write payment terms in days. No public producer source does it for you.
• Check when the buyer's bank will issue a letter of credit. Slow letters have held up cargoes before.
• Count the days at sea and at the port in your financing cost. One 90-day wait on a $16,140,000 cargo costs about $156,962 in base interest at SOFR of 3.89%.

Questions traders ask

What payment terms do pulp producers give?

No producer we found states its payment terms in days. Mercer says its pulp sales are on customary industry terms, and Suzano says it assumes its customers' credit risk when it sells on credit.

Is 60 days the standard for pulp payment?

No source we found says so. The number 60 appears in a Fastmarkets price basis for North American exports to Japan: a 2% to 8% discount for cash payment or 60 days. That line describes a price assessment only.

Are letters of credit common in pulp sales to China?

Our public examples are dated. In 2004, Chinese banks stopped issuing letters and purchases of one New Zealand producer's pulp virtually stopped. In 2008, slow letters left pulp waiting at Vancouver. We found no current share.

How much pulp sits in Chinese ports?

Suzano reports about 2.7 million tons at the end of June 2026. Fastmarkets reported 2.07 million tons at Qingdao and Changshu together on June 23, 2025. The figures cover different ports and dates.

What does it cost to finance a pulp cargo for 90 days?

For 30,000 tons at $538 a ton, worth $16,140,000, base interest at SOFR of 3.89% is about $156,962, or about $1.74 a ton per month. Real costs add the lender's margin and fees.

Read next

• Money and rulesOne ton of pulp, two prices: $1,710 or $722?
• Money and rulesFinancing a mega mill
• Money and rulesPulp watch: every rule and date in one place
• Makers and buyersChina: the largest buyer is building its own mills
• Start hereFollow one bale: from a Brazilian tree to a tissue roll in China
• Money and rulesShanghai pulp futures: what they are and who uses them
• Ossiano Trade Finance GuideHow each trade finance instrument works
• GlossaryTrade finance terms in plain English

Waiting for payment on a pulp cargo? Ossiano Capital works on trade finance for pulp and paper trades.

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Sources and notes

1. Pulpapernews, The world's largest woodpulp specialized vessel completes its first journey to China, April 12, 2024. https://www.pulpapernews.com/en/node/15569
2. Suzano S.A., Earnings Release 2Q26, August 12, 2026 (port inventories, Chinese and European markets). https://www.sec.gov/Archives/edgar/data/0000909327/000090932726000064/earningsrelease_2t26xen.htm
3. Fastmarkets, PPI Asia, Vol. 28 No. 24, June 27, 2025 (Qingdao and Changshu stocks). https://www.fastmarkets.com/uploads/2025/07/PPIA_24_2025.pdf
4. Fastmarkets, Price Methodology, Global Pulp, August 2026. https://www.fastmarkets.com/uploads/2026/08/FM_Price_Methodology_Global_Pulp_August_2026-1.pdf
5. Mercer International Inc., Form 10-K for the year ended December 31, 2025, Item 1 (sales terms, delinquencies, currency). https://de.mercerint.com/wp-content/uploads/MERC_10K_2025_DEC31.pdf
6. Suzano S.A., Form 20-F for fiscal year 2025, filed March 23, 2026, Risk Factors (credit risk). https://www.sec.gov/Archives/edgar/data/909327/000090932726000045/suz-20251231.htm
7. Suzano S.A., Form 20-F for fiscal year 2024, trade accounts receivable (R13) and inventories (R14), filed April 2025. https://www.sec.gov/Archives/edgar/data/909327/000162828025020368/R13.htm
8. ICC Documentary Credits World, China uses L/C intervention to cool economy, July 28, 2004 (a dated example). https://library.iccwbo.org/content/tfb/news/dcwn_28July200414538.htm
9. Pulp and Paper Canada, Credit concerns create pulp backlogs, October 16, 2008 (a dated example). https://www.pulpandpapercanada.com/credit-concerns-create-pulp-backlogs-1000085611/
10. Fastmarkets, Renminbi appreciation and volatile futures spice up softwood pulp market in China, January 18, 2023. https://fastmarkets.com/insights/renminbi-appreciation-and-volatile-futures-impact-softwood-pulp-market-in-china
11. Arauco, Arauco successfully closes a US$2,200 million financing for its Sucuriú project in Brazil, August 21, 2025. https://arauco.com/en/esarauco-cierra-con-exito-un-financiamiento-de-us2-200-millones-para-su-emblematico-proyecto-sucuriu-en-brasil-con-la-participacion-de-finnvera-bid-invest-e-ifc-enarauco-successfully-clo/
12. EUWID Pulp and Paper, European pulp port inventories edge up in May, July 8, 2026. https://www.euwid-paper.com/news/markets/european-pulp-port-inventories-edge-up-in-may-080726/
13. Fastmarkets, Prices for NBSK, BHK imports in China begin to tumble, August 8, 2024. https://fastmarkets.com/insights/prices-for-nbsk-bhk-imports-in-china-begin-to-tumble
14. Federal Reserve Bank of New York, Secured Overnight Financing Rate (SOFR), October 15, 2026: 3.89%. https://markets.newyorkfed.org/api/rates/secured/sofr/last/5.json
15. UN Comtrade, imports reported by China, HS 470329 (bleached hardwood kraft pulp), 2025, value divided by net weight for rows with usable weights; downloaded October 2026 and checked by us. https://comtradeplus.un.org/

Trade figures come from UN Comtrade (2015 to 2025, as reported by 10 countries) and FAOSTAT (1961 to 2024), checked and recalculated by us; each chart names whose data it uses. All tons are metric tons. All facts on this page are as of October 27, 2026, the date of publication, and may have changed since. For rules and tariffs, check the pulp watch before you act.

About this post. Prepared for Ossiano Capital. People planned, researched, wrote and checked this post, using AI tools to help with research and checking. You are welcome to quote or reuse it: please credit Ossiano Capital and link to this page.