Jan. - March 2006
National and International
News
Almost 4.8 million tonnes of pulp and paper capacity was shut in 2005, affecting more than 40 mills or machines, according to an annual review published March 13 by Forestweb. By contrast, shutdowns removed less than 2 million tonnes of capacity in 2004. The momentum of shutdowns in 2005 has also carried over into 2006, with more than 2 million tonnes of capacity slated for shutdown or idling in just the first six months of the year. As the North American pulp and paper sector consolidates, very little new capacity has been added. Of the almost 9.5 million tonnes of new pulp and paper capacity started up around the world during 2005, only about 8% was in North America.
Despite robust wood consumption at housing construction sites throughout North America--spurred by abnormally mild weather conditions in various regions-- 2x4 Douglas fir lumber prices eased by $12/mbf to $341 in February. March sales have continued to weaken to $322.
A ruling by an international trade panel that the U.S. made an improper calculation of Canadian subsidies to its lumber industry might lead to the elimination of an 8.7 percent duty on those imports, a U.S. lumber group said Friday. A five-member panel of judges set up under the North American Free Trade Agreement refused to reconsider issues raised by the U.S. Commerce Department over how it determined the subsidy rate for lumber exports to the U.S. The U.S. imposed duties on Canadian lumber in 2001 after American companies such as Potlatch Corp. petitioned the government for relief, arguing that Canada unfairly provides its domestic producers with cheap access to trees on government-owned land.
Source: Forestweb, Purchasing Magazine Online, Bloomberg News