Monday, December 21, 2009

Update on Canadian Paper Market

It’s no secret, like the USA paper producers, Canada has also struggling with overcapacity and decreasing demand. The forecast is for the Canadian industry will lose an aggregate C$1.2 billion this year and the industry will not return to profitability until 2011. American Forest & Paper Association data show that the volume of shipments to the U.S. from Canada fell from 18% to 75% in various key paper categories during the first three quarters of 2009, versus the same period of 2008.

Canada has always been a world leader in Newsprint production with a capacity of over 10Million tons; however, newsprint makers estimate they will have only shipped closer to 7.2 million tons by year end. The future is not predicted to be much better with consumption at between 6.8 million and 6.9 million metric tons next year, and somewhat lower still in 2011.

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