<B>Inventory Levels Climbing</B>

The forest products industry has been attempting to bring supply and demand back into balance. Mills have been making great strides in this area.

While the ability to reduce the amount of inventory has proved successful, recent statistical figures from the American Forest and Paper Association finds that the inventory of a number of finished product grades are starting to climb, with some showing significant jumps.

Market pulp inventories have been steadily increasing over the past several months. Meanwhile, demand for pulp has been easing lately. The result has been a number of pulp operations announcing plans to idle facilities over the next several months to bring supply and demand back into balance.

Producers market pulp inventories jumped more than 60 percent at the end of October from figures the same time last year, according to the AFPA. In addition to that, the figure is up 8.2 percent from the prior month. The increase in inventory levels pushed the days of supply on hand to 28, the highest level in the year.

While market pulp levels have been climbing, the volume of consumers’ purchasing pulp for inventory purposes has been declining. For October the figure stands at 378,000 tons, a 6.5 percent drop from the previous year.

While the pulp sector posted the sharpest jump, the inventory of printing and writing paper, as well as containerboard inventory levels, both increased at the end of October. For printing and writing paper inventory levels moved up 1.8 percent from last October. However, a promising note is that the figure is down slightly from the previous month.

For the containerboard market, inventory levels increased by 6.4 percent from last October to this October. The biggest gainer was corrugated medium, which skyrocketed 45.8 percent.