In the fourth-quarter 2007, wood fibre costs increased for many North American pulp mills. In terms of US dollars, wood-fibre prices in Q4 were up about seven percent over the previous quarter and up …
In the fourth-quarter 2007, wood fibre costs increased for many North American pulp mills. In terms of US dollars, wood-fibre prices in Q4 were up about seven percent over the previous quarter and up almost 20% than Q4/06.
In Canada however, the numbers were worse. According to the North American Wood Fibre Review, softwood fibre costs in all Canadian provinces -with the exception of Alberta -are higher than what’s going on in pulp-producing regions in the United States.
The report points to the strong Canadian dollar vis–vis the American dollar, Canadian mills struggle to remain profitable and the spate of closures of high-cost production facilities across Canada as reasons for the disparity. The decline in the availability of low-cost residual chips has also forced many Canadian pulp mills to chip expensive roundwood hasn’t helped. (Alberta is the only province that didn’t suffer market-related curtailments by pulp mills in 2007. Alberta is also most efficient when rounding up residual chips from its sawmilling sector and sending these chips to the pulp mills.)
Despite what the Review sees as a healthy demand for market pulp and selected paper grades in the United States and overseas markets, it expects that soaring energy and wood prices, combined with the soaring Canuck buck and strong foreign competition, will see more Canadian pulp mills reducing production in 2008
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