Financial Reports & Markets
Editorial: Coronavirus-related curtailments continue
June 25, 2020 ByKristina Urquhart
I want to begin this note by thanking everyone in the pulp and paper sector for your hard work and dedication during the COVID-19 crisis. We always knew the industry was essential – even before the federal government’s decree in early April – but you have proven that, especially to the public.
Whether it was by pulling out all the stops to get more product onto shelves, or by coming up with innovative ways to aid in the fight against COVID-19, or by taking work-from-home orders and production curtailments in stride – as always, this industry’s workforce did what needed to be done.
And you did all of that while supporting your local communities – something pulp and paper mills have always done on a regular basis, but to still show up when it is most needed, even when there are competing critical priorities? It hasn’t gone unnoticed. (See just a small sample of the generosity in our Community section on p. 30 of the Summer 2020 issue).
It goes without saying that the coronavirus crisis has had a major impact on how this year is going to shake out. As predicted, global pulp markets have seen weaker prices in 2020 but, with surges in consumer demand for certain products, have still fared relatively well over the past few months. According to a recent report by Wood Resources International, the U.S., Chile and Brazil all increased their wood pulp shipments between 12 and 26 per cent in March over February.
In Canada, however, COVID-related sawmill curtailments are trickling down onto the pulp side, resulting in a lack of fibre availability. At the time of this writing, Madison’s Lumber Report was tracking a rise in softwood lumber prices that may make up some lost ground for sawmills over the summer before seasonal slowdown.
For now, Mercer International has announced its Mercer Celgar pulp mill in B.C. is taking downtime for the month of July. Its joint venture with West Fraser, Cariboo Pulp and Paper, took an extended downtime for a month earlier this spring, but is back at full operations again.
And there are indefinite curtailments on the paper side, including at Kruger Brompton Specialty Papers, and at Resolute’s Baie-Comeau and Alma newsprint mills. See the full list of mills taking downtime here.
On the bright side, coronavirus-related problems are spurring innovation in the industry.
Researchers at two Canadian universities are working on all-fibre versions of N95 face respirators. See UBC’s version here and learn more about SMU’s plans here – that project has an extra challenge, in that they are also working with Port Hawkesbury Paper to potentially turn TMP into a pulp resembling kraft for medical-grade use. (And speaking of innovators, we have some future ones featured this month in our first-ever Top 10 Under 40 contest. Congrats to them – read their stories here.)
We continue to cover the impact of COVID-19 on our new channel, Pulp & Paper Canada: The Podcast. Every month, I’ll be interviewing experts in the industry about trends and technology – and our first episode features Allen Kirkpatrick, executive director of the Canadian Corrugated & Containerboard Association.
We discuss how the pandemic has affected the Canadian containerboard market, how the industry has been handling sanitization and what new technologies converters and roll-stock producers should be aware of. Allen also discussed the role of the association and its member companies in bringing more awareness to Canada’s use of recycled fibre.
“I think maybe the pandemic will heighten that [producers] need to help customers understand why they have selected corrugated cardboard packaging,” he says. “It’s time for them to realize that by the world telling us we’re essential to the essential – well, [let’s] help people understand why.”
If you have a topic you want to see covered in the podcast, let me know at firstname.lastname@example.org. Happy listening!
This article originally appeared in the Summer 2020 issue of Pulp & Paper Canada.
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