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North American Woodfiber Demand Falls on Shutdowns

October 23, 2008 - The International Woodfiber Report (IWR), following a flurry of pulp and paper mill closures and OSB mill curtailments, today reported that North American virgin woodfiber demand could fall more than 20 million green tons by 2009.

The report, published monthly by RISI, also stated that the trend is expected to continue given negative indicators for both industry segments.

According to IWR estimates, indefinite and permanent paper and paperboard closures so far this year represent the loss of 7.7 million tons/year of pulpwood demand across North America. Additionally, consumption of pulp-grade wood for the manufacture of OSB could decline nearly 9.5 million green tons for the year, if current production trends continue in the US and Canada.

The latest curtailment announcements among pulp and paper mills will result in the indefinite loss of 1.6 million green tons/year of pulpwood consumption capacity, as well as the loss of 395,000 tons in temporary machine shuts, IWR states. On the OSB side, the latest round of curtailments will remove about 2 million green tons/year of wood demand from North American markets.

Chris Lyddan, executive editor of the International Woodfiber Report, commented, "With the housing market virtually dead in the water, and pulp and paper markets teetering under the weight of the general financial crisis, pulpwood demand could see unprecedented declines in most US and Canadian markets. "Add the loss of sawlog markets, and the washout in logging capacity will become increasingly critical to an industry already battling wood supply issues."

SOURCE: RISI




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