Citi sees 'tepid' Q3 commentary for European paper and packaging, focus on 2025
** Citi expects Q3 commentary by European paper and packaging firms to be "tepid" overall, with focus now on 2025 as the market awaits clearer signs of recovery
** It says absorption of new pulp supply and Chinese seasonality could renew momentum into 2025, while packaging could tighten with recovering demand
** Graphic paper is likely still weak, and the brokerage says more closures are needed
** It expects to see the earlier pulp price spike in Q3 reports, and Nordic wood costs to rise in low single digit percentage quarter-on-quarter, which could accelerate in 2025
** The broker's preferred stock is Stora Enso STERV.HE, ("buy"), while it keeps its "neutral" rating on UPM-Kymmene UPM.HE and Billerud BILL.ST
** Citi says Stora Enso is less exposed to falling pulp prices than UPM-Kymmene and less exposed to rising wood costs than Billerud
** It views Stora Enso as the best diversified play on the packaging recovery, expecting steady volume recovery into 2025 for packaging
Reporting by Marta Frąckowiak
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