<B>Canadian Market Pulp Production Dips for December</B>

The Canadian market pulp industry ended 2000 on a down note as production and shipments both plummeted. Despite the decline, production for the full year increased from 1999.

According to the Pulp and Paper Products Council, total production for December stands at 700,000 metric tons, a 14 percent drop from the previous December.

Despite the drop, total production for the year increased 3 percent to 9.168 million metric tons.

The operating rate at Canadian pulp mills in December stands at 85 percent of capacity, a sharp falloff from the previous December’s operating rate of 103 percent of capacity. For the full year the operating rate stands at 94 percent of capacity, compared to 1999’s operating rate average of 95 percent of capacity.

Along with a dip in production, the shipment of finished products for December posted an even sharper 22 percent drop for the month to 661,000 metric tons. For the year shipments of market pulp stand at 8.918 million metric tons, a 1 percent drop from 1999’s shipment level.

Broken out by individual market regions, sharp declines were seen in shipments to the United States, down 23 percent; shipments of Japan, down 20 percent; to domestic Canadian sources, down 22 percent; and other regions outside Western Europe, dropping 56 percent. Western Europe was the only region posting an improvement for the month, with shipments moving up 9 percent.

For the full year shipments to the United States increased by 2 percent to 3.103 million metric tons; shipments to Western Europe increased by 10 percent to 2.439 million metric tons; and to Japan, up 4 percent to 1.087 million metric tons.

A decline in market pulp shipments were seen with movement to domestic Canadian sources, which fell 9 percent; and to other regions of the country, declining by 18 percent.

Reflecting the difficulties in the pulp industry, the PPPC reported that inventory of finished product reached 799,000 metric tons at the end of December, an increase 39,000 metric tons from the previous month, as well as a huge 251,000 metric ton jump from the previous December.

The increase in inventory levels pushed the days of supply on hand to 37 days, compared to the previous month’s figure of 33 days, as well as December 1999’s figure of 22 days.