Canadian Pulp Continues Slide

The production of market pulp at Canadian mills continues to decline. The most recent figures show Canadian market pulp production declining 6 percent to 737,000 metric tons. The drop for the month pushed the ten-month total to 6.701 million metric tons, a 13 percent drop from figures the same time last year.

Reflecting the slide in production, the operating rate at pulp mills stands at 89 percent of capacity, compared to last October’s figure of 95 percent of capacity. Although the figure is down month to month, the figures for October are better than the ten-month operating rate of 83 percent of capacity, compared to last year’s ten-month figure of 95 percent of capacity.

While production declined, a promising sign is the improvement in shipments of finished product. For October, shipments jumped 10 percent to 735,000 metric tons. The jump in shipments can be attributed to a 230 percent increase in shipments outside North America, Western Europe and Japan. Shipments to this region reached 201,000 metric tons for the month, compared to last October’s figure of 61,000 metric tons. For the first ten months shipments stand at 1.554 million metric tons, a 13 percent jump from last year’s first ten months.

While shipments to this region exploded, other segments posted a less impressive move between the two years. Shipments to United States declined 3 percent for October to 254,000 metric tons, while shipments for the first ten months dropped 13 percent to 2.297 million metric tons.

Shipments to Western Europe also dipped for both the month and first ten months. For October, shipments stand at 158,000 metric tons, a 26 percent drop, while shipments from Jan-Oct. fell 12 percent.

Inventory levels have started to ease back from levels hit earlier this year. At the end of October the inventory level stands at 615,000 metric tons, down from last October’s inventory level. The figure, basically unchanged from the previous month, is down significantly from the high levels reached through the first eight months of this year.