| |
| FORECAST (000 tons) |
| U.S. |
1998 |
1999e |
2000e |
| Production |
7,320 |
7,361 |
7,572 |
| Capacity 1 |
8,498 |
8,412 |
8,508 |
| Utilization rate, % |
86.1 |
87.5 |
89.0 |
| Imports |
3,792 |
3,907 |
4,010 |
| Exports |
4,593 |
4,620 |
4,822 |
| Apparent U.S. consumption |
6,519 |
6,648 |
6,760 |
| Canada |
|
|
|
| Production |
8,167 |
8,776 |
8,782 |
| Capacity 1 |
9,572 |
9,306 |
9,244 |
| Utilization rate, % |
85.3 |
94.3 |
95.0 |
| e= Pulp & Paper estimate. 1. Based on 1998 American Forest & Paper Assn. and 1999 Canadian Pulp and Paper Assn. capacity surveys. |
| TOP N. AMERICAN PRODUCERS |
| Company* |
Annual capacity•• (000 mtons) |
Market share (%) |
| 1. Weyerhaeuser Co.1,2,4,5 |
| 2,255 |
12.7 |
| 2. Georgia-Pacific Corp.1,2,4,5 |
1,505 |
8.5 |
| 3. International Paper Co.1,2,5 |
1250a |
7.1 |
| 4. Parsons & Whittemore Inc.1,2 |
1,090 |
6.2 |
| 5. Bowater Inc.1,2 |
940 |
5.3 |
| 6. Champion Corp.1,2,3,5 |
865b |
4.9 |
| 7. Fletcher Challenge Canada1 |
745 |
4.2 |
| 8. Canfor Corp.1,3 |
635 |
3.6 |
| 9. Alberta-Pacific Forest Industries Inc.1,2 |
560 |
3.2 |
| 10. Pope & Talbot Inc.1 |
560 |
3.2 |
Market share of top five companies: 39.7 % Market share of top ten companies: 58.7 % Total North American capacity (1999): 17.717 million mtons
1. Bleached softwood kraft. 2. Bleached hardwood kraft. 3. Unbleached kraft. 4. Bleached sulfite. 5. Fluff. •Capacity shown on equity ownership basis. ••Excludes companies' internally used pulp and pulp produced outside North America. a. Includes acquisition of Union Camp in May 1999. b. Includes 100% of Weldwood, which owns 50% of Cariboo Pulp. |
|
GRADE STRUCTURE. Chemical paper-grade market pulp is sold in the open market and excludes captive pulp used onsite or shipped to affiliated mills in the same country. Exports are generally included, except for shipments from Canadian mills to affiliate U.S. mills. Pulp grades are based on whether they are made from softwood or hardwood fiber, produced by the sulfate (kraft) or sulfite pulping process, and by the amount of bleaching.
Northern bleached softwood kraft (NBSK) is considered the premium pulp grade because of its long fiber length and strength. U.S. pulp statistics include about 2.4 million metric tons of fluff pulp production used in diapers and other absorbent hygiene products. Dissolving, mechanical and deinked pulp are excluded from the statistics. North America’s dissolving pulp capacity is nearly 1.6 million mtons. Canada’s mechanical pulp capacity—at some 2.1 million mtons—is mainly bleached chemithermomechanical pulp (BCTMP). Paper-grade deinked market pulp capacity in North America is about 1.8 million mtons.
PRODUCTION/CAPACITY. Global pulp shipments dropped in 1998 to 31.0 million mtons, down 2.1% from a record 31.8 million mtons in 1997. North American (NA) shipments decreased 4.9% and NA/Nordic shipments, at 20.9 million mtons, dropped 3.9% vs 1997. NA/Nordic producers operated at 90% of capacity in the first five months of 1999 vs 83% in 1998. U.S. and Canadian production in 1999 should increase by 0.6% and 7.7%, respectively; operating rates are projected, respectively, at 87.5% and 94.3% vs 86.1% and 85.3% for 1998. Capacity for the U.S. and Canada will decrease by 1.0% and 2.8%, respectively. Global capacity, at 38.3 million mtons, is expected to decrease by 0.2% in 1999, providing an interlude to a chronic industry overcapacity problem that has seen yearly increases in the 1.5% to 6.0% range since 1995 alone.
MARKET TRENDS. Pulp producers finally appear to be emerging from their three-year slump. Demand is steady worldwide. Prices climbed $20/mton in each month of second-quarter 1999, reaching $520/mton in Europe. Pulp prices in Europe for benchmark NBSK averaged only $580/mton in 1996, $565/mton in 1997, $515/mton in 1998, and $480/mton in first-half 1999. The closure of some mills, along with less new global pulp capacity, has helped limit supply and has kept prices from falling even further.
The end-of-May NA/Nordic stocks dropped to 1.4 million mtons, or 23 days of supply. NA/Nordic shipments of 9.2 million mtons for the first five months of 1999 were up 4.3% vs the year-ago period; respective U.S. and Canadian shipments were up 0.3% and 7.0%.
OUTLOOK. U.S. and Canadian production is expected to increase in 2000 by 2.9% and 0.1%, respectively; capacity should increase in the U.S. and Canada by 1.1% and 0.7%, respectively. Some marginal mills may shut. With world economies expected to grow by 3.3% and global pulp capacity increasing by just 2.1% in 2000 and 0.5 in 2001, pricing should increase. According to Equity Research Associates, prices in Europe will maintain through the summer of 1999 and improve by $20/mton in the fourth quarter, strengthening to $650/mton in fourth-quarter 2000 and to $750/mton by mid-2001. A report by NA/Nordic and Brazilian pulp and paper associations forecasts world paper and paperboard production to rise by 2.6% per year in the period 1999-2001. The recovery in Asia, where nearly 20% of the world’s pulp is shipped, is strengthening the market. The Asian GDP is expected to grow by 3.9% in 2000, but Japan, with some 10% of pulp demand and still in recession, is expected to show a negative rate of 0.2%.
By Diane Keaton News Editor
|
