Quarterly Market Fundamentals
Market pulp operating rates were relatively stable during Q3, with softwood mills operating around 94% and hardwood mills around 86% and with the recent global hardwood capacity additions now at full production rates. This excess capacity has further contributed to pricing erosion in the segment. Two hardwood market pulp producers, one in North America and one in Europe, have announced the permanent closure of their operations citing the inability to compete with lower priced product from South America .As of September, combined producer inventory levels were 33 days, one day lower than the same period last year. Softwood inventory levels in September were at 27 days, while hardwood inventory decreased to 40 days. Year-to-date global shipments of pulp are up by 1.5% (as of September), while Chinese shipments increased by 3.5% for the same period.
North American demand for sodium chlorate was stable throughout the quarter. Year-to-date North American sodium chlorate exports are within expectations, and are projected to reach the same levels observed over the past two years. Operating rates for the North American industry were steady throughout the quarter, and are expected to remain in the low 90% range for the remainder of 2014.