<B>Canadian Pulp Production Continues Growth</B>

The production of Canadian market pulp continues to improve through the year. Recent figures from the Pulp and Paper Products Council finds May pulp production increasing by 4 percent to 699,000 metric tons, pushing the five-month production figure to 3.843 million metric tons, a six percent increase from last year.

The operating rate during May also increased to 86 percent, compared to last May's operating rate at 84 percent of capacity. For the first five months the operating rate stands at 97 percent of capacity, compared to last year's five-month figure of 94 percent of capacity.

While production continues to increase, the shipment of finished product was flat for the month. According to the PPPC, May shipments stand at 703,000 metric tons, essentially unchanged from last May. However, shipments over the first five months of the year stand at 3.881 million metric tons, a 5 percent increase from the same time last year.

Broken out by shipment regions, pulp shipped to domestic Canadian sources declined by 17 percent for the month, and dropped by 19 percent for the first five months; shipments to U.S. sources dropped 5 percent for the month, although they increased 7 percent over the first five months; shipments to Western Europe increased by 10 percent for the month and by 11 percent the first five months; shipments to Japan jumped by 32 percent for the month and increased by 11 percent the first five months; and shipments to other regions declined by 11 percent for May, although they are up 3 percent from figures the first five months.