<B>CanPulp Shipments, Production Dip for August<B>

Canadian market pulp production dropped by 3 percent for August from figures the same time last year. According to the Pulp and Paper Products Council, a total of 740,000 metric tons of market pulp were produced in August, compared to 763,000 metric tons last August. Despite the drop, market pulp production for the first eight months is up 5 percent to 6.2 million metric tons.

The increase is reflected in the strong demand for the finished product, and has been translating into stronger pulp prices through the first half of this year.

The operating rate for this August also dropped, from 96 percent of capacity last year to 91 percent of capacity this past month. The operating rate for the first eight months still is up significantly from the same time last year. According to the PPPC, the operating rate stands at 97 percent of capacity, compared to last year's eight-month operating rate of 94 percent of capacity.

A possible harbinger of slower pulp markets toward the end of the year was the slide in pulp shipments. For August total pulp shipments dropped by 11 percent to 678,000 metric tons. The drop follows shipment totals which strengthened through the first seven months of the year. Total shipments so far this year are 4 percent higher at 6.177 million tons.

The biggest reason for the decline was shipments outside North America, Western Europe and Japan. The region posted a 46 percent drop in shipments for the month to 87,000 metric tons.

Although this was the biggest area of decline, other regions of the world also posted declines in shipments of Canadian pulp. Domestic shipments dropped by 20 percent to 59,000 metric tons; shipments to the United States declined by 5 percent to 237,000 metric tons; and shipments to Japan dipped by 3 percent to 83,000 metric tons.

The inventory of pulp increased at the end of August from the previous month. At the end of the month inventory stands at 569,000 metric tons, compared to 507,000 metric tons the previous month, as well as from June's figure of 452,000 metric tons. Although it is up sharply from the past two months, the total inventory level is still down from last August's inventory level of 637,000 metric tons.