Pulp and Paper Canada

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ECONOMIC OUTLOOK: MARKETS STARTING TO REBOUND


February 1, 2000
By Pulp & Paper Canada

TORONTO, ON — The Canadian industry can expect better prices for pulp and paper products in the next 18 months, if economic forecasts hold true. For instance, the $30-a-tonne price increase to about …

TORONTO, ON — The Canadian industry can expect better prices for pulp and paper products in the next 18 months, if economic forecasts hold true. For instance, the $30-a-tonne price increase to about $640/t (all dollar figures are US) for the benchmark northern bleached softwood kraft pulp “took less than a week to stick,” said Robert Duncan, an analyst at Research Capital Corp. in Toronto. He said that additional price increases for NBSK pulp are likely within the next 18 months, given that no new capacity is planned, and shortages are possible. Prices might rise as high as $750/t. Newsprint, however, is more uncertain. The $50-a-tonne price increase announced by Montreal-based Abitibi-Consolidated Inc. and Greenville, SC-based Bowater for April 1 is “fragile” — a result of too much capacity. “There is between 1/2-million and 1-million tonnes of newsprint overcapacity.” Duncan added. He noted that the situation could change in the second half of 2000, when the industry might see additional consolidation and mill closures.

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