Record pulp jump pushes up prices

The Norscan pulp producers inventory index statistics for December 2003 has shown a record jump of 52,000 tonnes over the previous month, prompting talk of further price increases.

The average increase for the past previous five years has been around 7,000 tonnes, but the December figure increased from 1.78m tonnes in November to 1.84m tonnes in December, a rise of 3%.

International Paper has already added its name to the list of those seeking to implement price increases, after it told customers it would seek a $40 (22) per tonne increase for its Northern Bleached Softwood Kraft (NBSK) pulp in both the US and Europe to around $600 a tonne.

Swedish pulp producer Sdra Cell has yet to announce any price alterations, but a spokesman said it was aware of developments with its Canadian counterparts.

For the moment we are watching the market closely to see reactions to price increase announcements, said the spokesman. We expect to have a clear picture towards the end of January and then we will know how to act, he said.

The spokesman said Sdra saw improving demand in Asia, and that stocks at paper mills were low.

Higher production caused the inventory rise, with pulp manufacturers operating at 97% of capacity to produce 1.98m tonnes of market pulp.

Tembec has also proposed an increase to $620 per tonne in the US and $600 per tonne in Europe with effect from February business.

Canfor is another seeking to push through a $30 per tonne rise in Europe for NBSK, which would take its prices to $590 per tonne.

The Norscan shipments overall showed an increase of 1.7% on last year to 22.2m tonnes, while shipments to western Europe and eastern Europe both increased by 3% and 7% respectively.

Story by Andy Scott