Canfor Pulp Products Further Extends Production Curtailment at Taylor Pulp Mill in B.C.

Canfor Pulp Products Inc. announced on Tuesday (5-17-22) that it was further extending the production curtailment at their Taylor Pulp Mill in Vancouver, B.C. The Taylor mill produces bleached chemi-thermo mechanical pulp, with an annual production capacity of 230,000 tons.

Canfor says the pulp mill’s curtailment will “continue for an extended period of time,” after cutting production in February due to transportation shortages and as finished inventories reached capacity. The company says that a supply chain backlog and continuing railcar shortage will continue to trouble the facility through the summer and likely the fall.

Workers and local officials were told Friday (5-13-22), and Canfor says about 80 employees are affected. A small crew of 20 is being kept “to facilitate shipments as we receive rail cars,” the company says.

In its quarterly report released May 3, 2022, the company said it shipped 176,000 tons of pulp in Q1 of 2022, down -34% from 265,000 tons Q1 of 2021. The report went onto say, “Global pulp markets tightened significantly during the first quarter of 2022, principally driven by the ongoing global transportation challenges and combined with unplanned pulp supply disruptions, largely due to labor disruptions in Europe and logistic constraints in BC.”

Though pulp prices have risen considerably since the end of last year, Canfor’s report notes “global softwood pulp producer inventories at the end of February 2022 were at 45 days supply, up two days from December 2021, well above the balanced range and largely reflecting the aforementioned supply chain constraints. Market conditions are generally considered balanced when inventories are in the 28-36 days of supply range.”

And improved prices notwithstanding, the company says its pulp sales in the first quarter of this year “were broadly in line with the previous quarter, primarily due to a significant delay in shipments (versus orders) driven by both the ongoing global container shortages and transportation challenges in BC.”