<B>Canadian Pulp Continues to Hold Up</B>

Canadian market pulp production dipped 2 percent for June to 682,000 metric tons. During the month the operating rate at Canadian pulp mills stands at 87 percent of capacity, compared to last June's operating rate of 91 percent of capacity.

According to the Pulp and Paper Products Council, despite the dip for the month the six-month production total increased by 4 percent to 4.525 million metric tons. The operating rate also increased, from 93 percent of capacity last year to 95 percent of capacity this year.

Shipments of finished pulp from Canadian sources increased for both the month and first six months. For June shipments stand at 739,000 metric tons, a 3 percent increase from figures the same time last year. For the first six months shipments stand at 4.621 million tons, a 5 percent increase from 1999's six-month figure.

The increase in shipments was driven by a surge in shipments to the United States and Western Europe, the two largest end markets for the product. U.S. shipments increased by 17 percent for the month to 250,000 metric tons and for the first six months by 8 percent to 1.572 million metric tons.

Shipments to Western Europe also increased for both the month and first six months. For the month shipments increased by 15 percent to 196,000 metric tons, while the total for the first six months increased by 11 percent to 1.196 million metric tons.

The inventory of pulp on hand points to good news for the Canadian pulp industry. The inventory of stocks on hand at the end of June stands at 452,000 metric tons, a decline from the previous month, as well as a steep drop from last June's figures. Meanwhile, the days of supply on hand dipped to 18 days, compared to the previous month's supply on hand figure of 20 days and last June's supply of 25 days.