Canadian pulp mills keep their prices stable despite wood chips deliveries decrease
American wood industry experts report that Canadian pulp industry sector has drastically reduced production volumes over past two years due to international pulp and paper markets weakening and reduced competitiveness of pulp production equipment. According to their estimations, the reduction of approximately inexpensive sawmills residuals supplies volumes at many plants prompted wood fiber prices high up.
Canadian pulp mills have encountered the changes in wood fiber supplies which is presented in the shift from inexpensive residual chips from local sawmills to expensive wood chips, made of round wood. Many pulp mills had to reduce manufacturing volumes or shift to expensive fiber due to the aforementioned situation with shifting to expensive round wood chips supplies. Such step is prompted by low profit of many sawmills.
Industry experts forecast that Canadian sawmills may increase prices for their products due the possible lumber manufacturing amounts drastic lowering in western and eastern Canada and consider that appropriate US lumber market improve its’ position.
As lumber production volumes decline achieved the level of 50% over last three years and pulp production decline stayed on the level of 25% only. Such fact forced many pulp production factories to use expensive chips made of round wood.
Industry experts provide the information, that residual chip price in Canadian currency remained practically stable in all Canadian provinces. The same good prices in British Columbia and Alberta, often linked with pulp market price, reached the lowest level in the summer of 2009 and have the tendency to grow in the fourth quarter of the year 2009. Eastern provinces kept wood chips prices stable, while round wood prices dropped for 5-8% in comparison with the prices of year 2008.
Many Canadian paper companies sell their goods at US market thus creating the rivalry to US companies providing the same goods to the market. Eastern Canada pulp mills have suffered big decline over several past years partially due to expensive wood fiber. In the third quarter of 2009, Eastern Canada pulp mills spent 70% more for conifer fiber than the same factories in the South of US. This resulted that during the last 12 month many pulp and paper factories in Ontario, Quebec and Maritime Provinces of Canada had to reduce production volumes more than the same companies of North America did.
Canadian pulp mills keep their prices stable despite wood chips deliveries decrease
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