Pulp and Paper

Russia Forest Products

Sanctions against Russian Exports will Permanently Alter the Global Trade of Forest Products

April 14, 2022 - Lumber trade flows changed almost instantly when Russia invaded Ukraine in late February. Trade sanctions and restrictions in financial transactions by Europe, North America, and major markets in Asia halted shipments from Russia and Belarus. In addition, exports from Ukraine were also disrupted. The total lumber exports from the three countries in the war zone were 34 million m3 in 2021. Over 25% of that volume was exported to countries with current sanctions against Russia and Belarus.

In addition, the two major wood certification organizations, FSC and PEFC, have labeled all timber from the two countries as "conflict timber." The removal of the labeling means that the timber cannot be used in certified products, which will impact any country buying wood from Russia and Belarus and manufacturing certified products, e.g., lumber, plywood, pulp, and paper for sales worldwide.

The total volume of softwood lumber that is now unlikely to reach the market in Europe and Asia (outside China) because of sanctions is an estimated 10 million m3, or just over 30% of the total export volume shipped from Belarus, Russia, and Ukraine in 2021, reports the Wood Resource Quarterly. In addition, lumber sold to customers in China that require certified wood for manufacturing forest products targeting Europe and North America will no longer be available from Russia. Europe, which imported 8.5 million m3 of softwood lumber from the three countries in 2021, will be the hardest hit, as the lumber import volume accounted for close to 10 percent of the total consumption on the continent in 2021.

Although the Chinese government has not set up any barriers to trade between them and Russia, it is still conceivable that there will be interruptions in shipments between the two neighbors. Some of the factors that may reduce trade even with countries that have no sanctions with Russia and Belarus include:

  • Foreign investors in the Russian forest industry may withdraw their presence and financial funding, making it more challenging to produce and export to any market.
  • A weak Russian Rouble (down over 20% in three weeks since the war started) will make importing equipment and spare parts for logging companies and forest product manufacturers very costly.
  • The removal of Russian banks from the international payment transaction system SWIFT will complicate payments for exported Russian products and imports of most equipment for the forest industry, from timber harvesters and forwarders to machinery for sawmills, plywood mills, and pulp mills.
  • Russian manufacturers of pulp, paper, plywood, and lumber can no longer offer PEFC or FSC certified products.

Global trade flows of forest products have already changed significantly and will continue to change due to the Russian invasion of Ukraine. Even when peace is ultimately reached, it is improbable that trade will revert to pre-war patterns.

Wood Resource Quarterly, published by Wood Resources International, is a 75-page report established in 1988 and has subscribers in over 30 countries. The publication tracks prices for sawlog, pulpwood, lumber, and pellets and reports on trade and wood market developments in most key regions worldwide. For further information, visit: www.woodprices.com.

SOURCE: Wood Resources International LLC

 

Finland's Exports of Paperboard Grew to EUR 3.3 Billion in 2021

April 12, 2022 - According to preliminary data for 2021 published by the Natural Resources Institute Finland (Luke), the export value of forest industry products was a little more than EUR 13 billion. As a result of the global rising demand and prices for sawn goods, the export value of the wood-products industries accounted for as much as 29 per cent of forest industry exports. Imports of roundwood and wood residues into Finland totalled 13 million cubic metres, slightly more than half of which consisted of pulpwood.

Finland forest industry exports

The export value of forest industry products increased by 16% from the previous year in real terms to EUR 13.1 billion. Compared with the previous ten-year average, exports were, however, only 2% higher (deflated using the wholesale price index). In the wood-products industries, exports increased by 42% from the previous year to EUR 3.9 billion, while in the pulp and paper industries exports increased by 8% year-on-year to EUR 9.3 billion. The forest industries accounted for 19% of Finland's total goods exports in 2021.

High Demand for Sawn Goods

A total of 8.7 million cubic metres of sawn goods were exported, with an export value of EUR 2.6 billion.

"Sawn goods had the highest export value out of all products in the wood-products industries, accounting for a fifth of the total export value of the forest industries. The export value of sawn goods increased by a whopping 51% from the previous year and as much as 49% compared to the previous ten-year average. The export volume increased more modestly: by 6% from the previous year and by a tenth from the previous ten-year average," says Eeva Vaahtera, senior statistician at Luke.

Paperboard passed paper as the most important export product, covering a quarter of the total export value of the forest industries, while paper remained at 22%. The export value of paperboard increased by a tenth from the previous year to EUR 3.3 billion, whereas that of paper decreased by 4% to EUR 2.9 billion.

Magazine paper was the most exported paper grade, with its export value increasing by 4% from the previous year to EUR 1.2 billion.

The most exported paperboard group consisted of multi-ply paperboard coated with kaolin and paperboard coated with plastic (Other coated paperboard in Luke's statistics), covering 59% (EUR 2.0 billion) of paperboard exports (up by 3% from the previous year). Compared to the previous ten-year average, the export value of paper has decreased by 40%, while that of paperboard has increased by 23%.

The Export Price of Pulp Increased

Pulp exports totalled 4.6 million tonnes, with an export value of EUR 2.6 billion, accounting for a fifth of the export earnings of the forest industries. The export value of pulp increased by 27%, driven by rising prices, even though the export volume only increased by 4%. Of the total value of pulp exports, bleached sulphate pulp accounted for 82%, and its export value increased by a little more than a fifth, while its export volume decreased by 1%.

"The most important export countries for the forest industries were Germany, China and the UK. Germany accounted for 13% of the export earnings of the forest industries, while China made up 10% and the UK 8%," Vaahtera says.

In 2021, Finland's exports of roundwood and wood residues totalled 1.4 million cubic metres, of which pulpwood accounted for 59%, logs 23% and wood chips a tenth. Sweden represented 82% of all exported wood, Egypt 6% and the UK 3%.

The Volume of Wood Imports Remained at 13 Million Cubic Metres

In 2021, Finland's wood imports totalled 12.7 million cubic metres, or EUR 0.5 billion. The volume of wood imports remained unchanged from the previous year. Of wood imports, pulpwood accounted for a little more than a half and chips 35%. Fuelwood, preserved wood and wood residues combined made up 8% and logs 3%. The import volume of pulpwood increased by 2% from the previous year, while that of wood chips remained at the same level. Log imports decreased by a fifth.

Finland wood imports

The highest volume of wood was imported from Russia, accounting for 73% of all wood imports. It was followed by Estonia with 12% and Latvia with 9%.

The import value of forest industry products was EUR 1.5 billion, up by 2% in real terms from the previous year. Wooden furniture accounted for a fifth, converted paper and paperboard products 18 % and paperboard 12% of the import value. Sweden, Estonia and Russia were the most significant import countries.

The Natural Resources Institute Finland (Luke) is a research organisation operating under the Ministry of Agriculture and Forestry of Finland. Luke's task is to promote competitive business based on the sustainable use of renewable natural resources, as well as wellbeing and the vitality of the countryside. To learn more, visit: www.luke.fi.

SOURCE: The Natural Resources Institute Finland (Luke)

 

Canfor sawmill

Canfor’s Sawmills and Taylor Pulp Mill in BC Hit by Supply Chain Crisis

March 30, 2022 - Canfor Corporation today announced that it will implement reduced operating schedules at its Western Canadian sawmills (in British Columbia, Canada) effective April 4, 2022 due to the cumulative effects of the unprecedented global supply chain crisis that has been ongoing for several months.

The reduced operating schedules will remain in effect for a minimum of four weeks and the company will continue to assess and make adjustments to operating schedules as supply chain conditions evolve.

"We are experiencing extreme supply chain challenges that are significantly impacting our operations and it has become imperative to reduce operating schedules to address our unsustainable inventory levels. We regret the impact that the reduced operating schedules will have on our employees, contractors and communities and we will make efforts to mitigate the negative effects," said Don Kayne, President and CEO, Canfor. "We will continue to leverage our global operating platform to minimize disruptions in supply to our customers."

It is anticipated that the reduced operating schedules will impact production capacity by a minimum of 100 million board feet.

Taylor Pulp Mill

A day earlier, Canfor Pulp announced a minimum six-week extension of the curtailment of BCTMP production at Taylor Pulp due to the ongoing transportation shortages that have resulted in continued high finished product inventories at the pulp mill.

In mid-February, Canfor Pulp said that it was forced to curtail the production of BCTMP at the Taylor mill for six weeks due to lack of transportation to ship product and inventories at the mill reaching capacity. The first six-week curtailment reduced the mill's production by about 25,000 tonnes.

"Unfortunately, the ongoing rail transportation situation has not improved, and we have no choice but to extend the current production curtailment," said Kevin Anderson, VP Operations, Canfor Pulp. "We are very disappointed in the ongoing impact this is having on our employees, their families and the community."

The curtailment extension will further reduce the production of BCTMP by at least 25,000 tonnes.

SOURCE: Canfor

 

UPM mill employee

UPM Optimistic About Reaching Agreement Soon with Paperworkers Union in Finland

March 22, 2022 - UPM today said that Conciliator Leo Suomaa has submitted a proposal for a settlement in the collective labour agreement negotiations between UPM Pulp and the Paperworkers' Union. The conciliator has asked the parties to state their position on the proposal by 14 April 2022 at 10:00 EET.

In the meanwhile, the conciliator will continue the conciliation with the Union and with UPM's other businesses. Paperworkers' Union has now also agreed that all business can run the negotiations parallel instead of having them one by one.

"I am pleased that the negotiations have reached a point where the conciliator has seen it possible to submit a proposal for a settlement," said Juha Kääriäinen, Vice President, Finland Pulp Operations at UPM Pulp, the chief negotiator for UPM Pulp. "I am hopeful that the agreement will be reached, and I hope we get to start the mills as soon as possible."

The Paperworkers' Union's strike at UPM Pulp, UPM Biofuels, UPM Communication Papers, UPM Specialty Papers and UPM Raflatac units in Finland began 1 January 2022.

SOURCE: UPM

 

Maxau Mill in southwest Germany

Stora Enso Announces Plans to Divest Four Paper Mills in Europe

March 29, 2022 - Stora Enso has initiated a sales process for a possible divestment of four paper production sites. In line with Stora Enso’s strategy, paper is not a strategic growth area for the Group. The divestment intent is aligned with the Group’s strategy to focus on long-term growth potential for its renewable products in packaging, building solutions and biomaterials innovations.

Stora Enso’s paper production sites intended for divestment are: Anjala in Finland, Hylte and Nymölla in Sweden, and Maxau in Germany. The assets are high-quality sites for paper and pulp production with strong infrastructure, and skilled and experienced staff.

“Through divesting a majority of our paper assets, we are able to increase the focus on our defined strategic growth areas of renewable packaging, building solutions and biomaterials innovations,” said President and CEO Annica Bresky. “When assessing potential divestment options, we look for new ownership that will provide a sustainable long-term future for the sites and the people that work there.”

The four Stora Enso sites are subject to divestment in one or a series of transactions.

Stora Enso has not committed to a deadline for the conclusion of the divestment process.

The initiated sales process has no immediate effect on Stora Enso’s paper operations which continue to serve their respective customers.

Stora Enso’s Langerbrugge site in Belgium will be retained within the Group.

Stora Enso currently has five paper production sites that are supported by divisional sales, management, and administrative functions. In total, the Paper division currently employs approximately 2,200 employees. In 2021, the Paper division’s net sales amounted to EUR 1,703 million.

About the Mills

Anjala Mill in southern Finland produces printing paper from mechanical pulp — both coated and uncoated book paper, magazine paper and improved newsprint grades. Annual capacity: 435,000 tonnes of paper.

Hylte Mill in southwest Sweden is one of the largest newsprint mills in the world, and produces high-quality newsprint, biocomposites and Formed Fibre products. Annual capacity: 240,000 tonnes of Newsprint based on TMP (thermo-mechanical pulp), 15,000 tonnes of Circular Solutons and 50 Million units of Formed Fiber products.

Nymölla Mill in southern Sweden produces pulp and wood free uncoated paper, including the product Multicopy. Annual capacity: 475,000 tonnes of paper and 340,000 tonnes of pulp.

Maxau Mill in southwest Germany produces supercalendered paper primarily from recovered paper. Annual capacity: 530,000 tonnes of paper and 270,000 tonnes of pulp.

SOURCE: Stora Enso

 
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