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Pulp mill headwinds continue

Taylor restart "will not be contemplated" until rail service improves to all mill operations, says Canfor
taylor-pulp
Taylor pulp mill.

Canfor says it will not contemplate a restart of its Taylor pulp mill until transportation service returns to more normal levels for all of its pulp and paper mill operations.

This despite "modest improvements" in the B.C.'s transportation network as the company said in a second quarter update Thursday that “a constrained rail service network” continues to put pressure on its mill operations and shipments. 

The company reported pulp production of 187,000 tonnes for the second quarter of 2022, up 11,000 tonnes, or 6%, from the previous quarter. Production of bleached chemi-thermo mechanical pulp at its Taylor mill has been cut by 60,000 tonnes since being curtailed in February.

Canfor said its continuing "to closely monitor the supply chain challenges and will adjust future operating plans accordingly, through the balance of 2022.”

“Notwithstanding the modest improvement in BC’s transportation networks seen in the later part of the second quarter, results in the third quarter are anticipated to reflect the continued impact of and uncertainties associated with a constrained rail service network and the related pressures on [Canfor Pulp Product Inc.] operations and shipments,” the company said.

“Furthermore, it is projected that a restart of Taylor will not be contemplated until such time as there is a return to more normal transportation service levels to all of CPPI’s pulp and paper mills.”

The Taylor mill produces bleached chemi-thermo mechanical pulp, with an annual production capacity of 230,000 tonnes. The pulp is used for products such as packaging and tissue.

The mill was first curtailed for a "minimum" six weeks in February, which was extended for another six weeks in March and again in May. The mill was also curtailed in December because of shipping interruptions brought on by severe flooding in the Lower Mainland.

Pulp production company-wide was down was down 103,000 tonnes, or 36%, compared to the second quarter of 2021, due mainly to the curtailment at Taylor and maintenance at its Northwood pulp mill in Prince George, according to the report.

In its  update, Canfor said the costs of pulp manufacturing are "significantly higher" compared to the same period last year, "mostly attributable to lower production combined with market-related increases in fibre costs as well as higher energy and chemical costs in the current quarter.”

The company said average unit sales of BCTMP had “moderately improved” quarter-to-quarter due to an uptick in global demand, however, compared to the same period last year were significantly lower "as lower US-dollar pricing more than outweighed the weaker Canadian dollar.”


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