Canada | USA
Companies Wait for Low Pulp Prices to Rebound
Global pulp producers hope the recent dramatic plunge in international pulp prices will soon bottom out and begin to rebound.
Hundreds of delegates from more than 35 countries are gathered in Vancouver for the annual International Pulp Week conference, sponsored by the Pulp and Paper Products Council.
Levi Sampson, president of the Harmac pulp mill, said the "extremely low" international price for pulp, which has plummeted from almost $1,000 per tonne a year ago to less than $700 today, is a major concern among many of the companies represented at the conference.
Sampson said global prices have declined sharply largely due to an abundance of pulp that has built up in the international marketplace, particularly in China, which has become the largest buyer in the world in recent years. However, he said while the Chinese pulp inventories have been high for some time, the nation is coming close to exhausting its existing supplies and is expected to begin buying large quantities again, which will see pulp prices begin to turn around.
A report from PricewaterhouseCoopers, released Tuesday, agreed with Sampson's assessment.
The report predicts an improvement in exports of both lumber and pulp to China is expected in the second half of the year. "The pulp industry has always been a very cyclical market with wild swings in the markets and prices," Sampson said.
"We've seen some very high pulp prices over the last few years but that's just not the case now. However, it's all about supply and demand and the demand in China is expected to increase significantly very soon. This is all part of the pulp business and I'm not too concerned by it."
The price of pulp when Nanaimo Forest Products took over Harmac in 2008 was only about $500 per tonne.