Forestry posted a good year in 2000 with both the volume and value of newsprint exhibiting strong gains. Lumber production also increased, although export prices declined dramatically in the latter half of the year.
Newsprint
Strong newsprint markets and higher prices resulted in record production of 807,800 tonnes in 2000, an increase of 11.9% from 1999. Production previously peaked in 1997 at 740,900 tonnes.
Newsprint from the Province’s three mills is exported to around 50 countries. Most recent data indicates that close to 40% of production is exported to the United States and about 30% to countries in Europe. Other countries in Asia, Africa, and Central and South America account for the balance of exports.
The estimated production value in 2000 was $676 million, 24% higher than 1999. This increase was driven by gains in both quantity and price. Newsprint prices averaged US$564 per tonne in 2000, up 11% from 1999. Prices increased from US$510 in early 2000 to US$610 per tonne by September. Newsprint continued to trade at US$610 per tonne through to March 2001. |
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| Outlook for 2001 |
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Newsprint investment expected to exceed $109 million. |
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Average newsprint prices are expected to remain above US$600 per tonne. |
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Volume of newsprint shipments expected to increase slightly. |
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Lumber production expected to be on par with last year. |
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Lumber prices will remain low due to weakness in export markets. |
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Lumber Production
The Province’s lumber industry exhibited rapid growth over the past decade. Sawmill production
increased from 48 million board feet in 1989-1990 to a record 125 million board feet in 1999-2000. Oversupply in the U.S. market caused lumber prices to decline dramatically in the latter half of 2000, tempering production value despite higher volumes.
Industry growth over the past decade has been led by growth in export markets; higher prices; increased value-added production (e.g., hardwood flooring); new technologies (e.g., curf sawing); and fuller resource utilization (e.g., fibre exchange agreements with newsprint companies). Recent data indicates that the United States accounts for over 95% of exports with the balance destined for Europe, South America and Australia.
Eleven of the Province’s largest sawmills have integrated their operations with newsprint producers through fibre exchange agreements. Each of the integrated mills has the capability to produce pulpchips from residue (i.e., slabs and edgings) which was traditionally discarded as wastage. Together, these 11 integrated mills produced 100 million board feet of lumber in 1999/2000, representing 80% of total production. |
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Photo: Town of Grand Falls-Windsor
Abitibi-Consolidated newsprint mill at Grand Falls-Windsor |
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