JPMorgan's Phil Gresh says that the spread divergence between Hardwood and Softwood pulp pricing...
JPMorgan's Phil Gresh says that the spread divergence between Hardwood and Softwood pulp pricing and inventories has created a trading opportunity, and he's recommending take advantage with a pairs trade in the pulp wood space. He recommends investors go long Domtar ([[UFS] +1%) and short Fibria Celulose (FBR -4%). FBR has outperformed UFS by 24% YTD and 52% since early July. Gresh notes that mills currently have an incentive to increase hardwood production, which would bring pricing spreads back to historically average levels.
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