<B>Canadian Pulp Production Increases in October</B>

The production of Canadian market pulp increased by 10 percent for October, compared to figures the same time last year. For the month production stands at 789,000 metric tons.

The figures for the month pushed the 11-month total to 7.739 million metric tons, a 5 percent increase from the same time last year.

The operating rate for October stands at 97 percent of capacity, compared to 90 percent of capacity last October. For the first 11 months the operating rate stands at 97 percent of capacity, compared to 94 percent of capacity during the same time last year.

While production improved for the month, the shipment of finished product posted a fairly sharp decline. According to the Pulp and Paper Products Council shipments of Canadian market pulp stand at 676,000 metric tons, an 11 percent drop from figures the same time last year. The drop for the month came from most regions, with shipments to Canadian sources dropping 18 percent for the month; shipments to the United States dropping 5 percent; shipments to Japan, declining 21 percent; and shipments to other regions outside Western Europe dropping a steep 51 percent.

The steep decline between the two years reflects a determination of many consumers to stem the price increases for market pulp that have been pushed through to consumers over the past several quarters.

Compensating for the sharp drop in shipments, a number of pulp producers are opting to take production off line to bring supply and demand back into balance.

While shipments for the month are down significantly from last year, the shipment total for the first 11 months is still up from last year. Total shipments for 2000 stand at 7.632 million metric tons, a 1 percent increase from last year.

Broken out by individual regions, shipments of market pulp to Canadian sources dropped 8 percent; shipments to the United States increased 6 percent; shipments to Western Europe climbed 10 percent; shipments to Japan climbed 6 percent; and shipments to other regions declined by 13 percent.

One of the biggest concerns for pulp producers has been the sharp increase in inventory stocks. According to the most recent statistics, inventory on hand at the end of October stands at 656,000 metric tons, a jump of 113,000 metric tons from the previous month, as well as a climb of 131,000 metric tons from figures the same time last year.

The increase in inventory levels pushed the days of supply on hand to 28 days, compared to the previous month’s figure of 22 days and last October’s figure of 20 days.

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November 2000
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