Continuing pressure on market pulp prices has forced down Sdras profits for the first quarter of 2001.


Consumption of pulp and paper has stagnated, and the low demand we are experiencing is partly because customers have reduced their pulp stocks, said president and chief executive Anders Wahroln.


Pre-tax profit was down 4% to 25m (SEK 365m) but sales grew 8% to 192m, which was mainly attributable to the acquisition of the Norwegian mills at Tofte and Folla last July.


Sdra is awaiting the Norscan inventory figures, due to be released next week, before it make its next move.


The business cycle is low at present, and the pressure on prices is still increasing, said head of corporate communications Sven-Eric Petersson.


April, May and June are normally quite good months, he added, even when prices are under pressure and stock inventories are at low levels, but April did not reflect this.


Petersson said the recent price reduction FOEX had applied to its price index for Northern Bleached Softwood Kraft (NBSK) pulp was not significant.


The NBSK price is remaining quite stable at present, he said.


The FOEX price stands at $578 per tonne, but Sdras list price remains at $620.


And he agreed with the thoughts of European buyers, who believe that the US economic downturn will be felt in Europe.


Whether the European market will pick up remains to be seen, but this will be dependent on what happens in the US, North America and Asia, Petersson said.


Story by Andy Scott