Market pulp Update

We believe more Canadian capacity closures will be announced . With the most recent uptick in the Canadian Dollar, it will force another round of capacity closures - we think there are at least 5-6 mills "on the bubble". Despite the highest US$ prices in over a decade for pulp, we believe that a number of Canadian mills are at/below cash cost. Wood supply issues in Europe appear to be starting to narrow the softwood/hardwood spread. Aracruz has recently announced a worldwide $20/ton hike on eucalyptus hardwood.