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More Canadian Pulp Mill Closures Expected to Tighten Up Markets

World pulp markets are being driven in no small part by recently reduced supply in North America….

World pulp markets are being driven in no small part by recently reduced supply in North America.

Adding to the psychological impact of mill closures, Bowater Inc. announced on January 26 that during the second quarter, sources say April 30, it would permanently shut a 210,000 tonnes/year line at its Thunder Bay, ON, facility. The mill has been producing northern bleached softwood kraft (NBSK) pulp and market sources said the other 330,000 tonnes/year line at the site would start producing about half softwood pulp and half hardwood pulp.

Meanwhile, on January 25, Western Forest Products Inc. closed its 275,000 tonnes/year NBSK pulp mill in Squamish, B.C.

Another Canadian stand-alone NBSK pulp mill is still at risk of shutting. Neenah Paper Inc.’s high-cost Terrace Bay, ON, 340,000-350,000 tonnes/year mostly facility, loggers and truckers went on strike on January 30. The mill’s main customer, Kimberly-Clark Corp., now has a revised offtake agreement factoring in the possibility of a force majeure situation.

In addition, Weyerhaeuser Co.’s Prince Albert, SK, pulp mill is set to close some time in the spring.

“The mill shuts are definitely going to have an impact,” a U.S. pulp buyer said this week. “If Terrace Bay should be shut down, it could add $50 to the price in a heartbeat.”

Editor’s Note: Neenah paper began temporary shut down operations at Terrace Bay at the end of the week of February 13, 2006.