Pulp and Paper Canada

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Economic Update

March 27, 2008  By Pulp & Paper Canada

US better off than Canada

US better off than Canada

Its all relative but according to a recent Forestweb analysis, our forest-products cousins to the south arent suffering as much as the True North in terms of dollar leakages. The survey of 17 North American forest-products companies discovered that in the fourth quarter 2007, Canadian companies lost money at an ever-increasing rate. Conversely, the more diversified US sector was actually able to post modest profit gains.
More than half of the 17 companies surveyed reported large declines in Q4/07 net earnings. However, Forestweb says almost all of the Canadian companies posted significant losses. For that, blame the usual suspects: the strong loonie and the depressed housing market.


Steady As It Grows?

Pulp companies are in hover mode, gamely making predictions on global economic issues and anticipating bellwether price increases for bleached eucalyptus kraft (BEK) in April. According to Forestweb, worldwide pulp suppliers are optimistic the signs are still in their favour and, short-term at least, global demand is still robust enough to keep the markets and contract prices stable. This is despite the fact other economic cycles might point to further economic downturns and despite the surplus tonnages of northern bleached softwood kraft (NBSK) and other softwood pulp laying about.

Then Again . . .

The stronger euro and supply difficulties (i.e. the mild winter in boggy deep-woods Finland and an upped Russian duty of exported wood fibre) is affecting prices in Europes printing-paper markets. Demand in European and North American markets for coated mechanical paper has been strong early in the year. However, markets for coated free-sheet has softened, the flat prices excaberated by increasing exports from Asian suppliers. Although the North American market for coated free-sheet remains firm with overall capacity cut by more closures, the gains in the euro have largely negated any recent price increases.

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