<b>Canadian Pulp Continues Downward Slide</b>

The production of market pulp by Canadian mills continues to post sharp declines, as mills throughout the country slash production schedules to bring supply and demand into balance.

Over the past several quarters more Canadian pulp mills have announced plans to take extended downtime to remove thousands of tons of product from the market. Despite these announcements, market pulp prices continue to slump as intense pressure from outside Norscan countries continue to put downward pressure on pulp prices.

April figures from the Pulp and Paper Products Council show Canadian market pulp production declining 10 percent as mills operated at 88 percent of capacity. This compares unfavorably with last April’s 98 percent operating rate.

Total production for the month stands at 702,000 metric tons, bringing the four-month total to 2.849 million metric tons, an 11 percent drop from figures the same time last year. The average operating rate this year stands at 89 percent of capacity, compared to last year’s average of 99 percent of capacity.

The shipment of market pulp also declined for both the month and first four months. Figures show that April’s shipment total of 695,000 metric tons of market pulp is an 11 percent drop from last April. For the first four months the drop is even sharper, 14 percent, with the year-to-date total at 2.768 million metric tons.

Declines were seen in most regions of the world, with shipments to the United States, the largest end market for Canadian pulp, posting a 21 percent drop for the month, and 15 percent for the first four months. Other regions and their monthly and ytd figures are the following: Western Europe, down 3 percent for the month and down 4 percent the first four months; shipments to Japan, down 12 percent for the month and down 16 percent the first four months; shipments to Canadian sources down 15 percent for the month and down 20 percent the first four months; and shipments to other regions, up 1 percent for the month, although down 23 percent the first four months.

The oversupply situation with Norscan pulp figures is magnified by the growing supply of stocks on hand. At the end of April the inventory level stands at 880,000 metric tons, essentially unchanged from the previous month, although up sharply from last April’s figure of 514,000 metric tons.

The days of supply on hand also jumped between the two years, with this past April’s figure of 37 days more than twice that of April, 2000.