The production of market pulp by Canadian mills continues its downward trend. Slowing demand for finished products, significant downtime and a decline in movement continues to pressure markets. Prices have reflected these difficulties, as reports of price cuts continue to run unabated through the past several quarters.
Market pulp production dropped 9 percent to 646,000 metric tons for May. The figure for the month pushed the five-month production total to 3.495 million metric tons, an 11 percent drop from figures the same time last year.
The operating rate at pulp mills declined, from 86 percent last May to 78 percent this most recent May. For the first five months the average operating rate stand at 87 percent of capacity, compared to last May’s operating rate of 97 percent of capacity.
The shipment of finished pulp also plummeted for the month and year to date, according to the Pulp and Paper Products Council. For May, market pulp shipments stand at 662,000 metric tons, a 7 percent drop from figures the same time last year.
The figures for the month pushed the five-month shipment total to 3.429 million metric tons, a 13 percent drop from last year.
There were few bright spots for either the month or over the first five months. Each region posted a decline for the month and year. The United States, the largest end market for Canadian market pulp, posted a 12 percent drop for the month as well as a 15 percent drop for the first 15 months.
Other regions and their shipment volumes are the following: Canada, down 30 percent for May and down 22 percent the first five months; Western Europe, down 11 percent for the month and down 6 percent the first five months; Japan, down 17 percent for the month and first five months; and shipments to other regions, up 22 percent for May, although down 15 percent over the first five months.