<b>Canadian Pulp Production Drops for January</B>

The production of Canadian market pulp dropped sharply January, compared to figures the same time last year. According to the Pulp and Paper Products Council, production of the commodity over the first month of the year stands at 768,000 metric tons, a 9 percent drop from last January. Pulp mills in Canada operated at 93 percent of capacity for the month, compared to 102 percent of capacity the same time last year.

The sharp drop in pulp production has been widely expected, as Norscan pulping operations have been taking significant downtime in an attempt to bring supply and demand back into balance.

The shipment of finished market pulp dropped an even sharper 19 percent to 659,000 metric tons, with all five regions posting drops. Shipments to internal Canadian sources dropped 19 percent to 59,000 metric tons; shipments to the United States, the largest end market, dropped 18 percent to 233,000 metric tons; shipments to Western Europe declined by 3 percent to 186,000 metric tons; shipments to Japan dropped 24 percent to 69,000 metric tons; and shipments to other regions dropped by 39 percent to 102,000 metric tons.

Following along with the overall problems in the pulp industry, the inventory of finished product on hand soared. According to the PPPC, the inventory level topped 900,000 metric tons at the end of January, a jump of more than 100,000 metric tons the previous month, and a jump of 333,000 metric tons from last January’s inventory level.

The increase in inventory levels pushed the days of supply on hand to 42 days, compared to the previous month’s average of 37 days and last January’s figure of 23 days.