Pulp Industry Perspective
4th Quarter 2013
China slaps duties on viscose
By Jesse Marzouk
the additional eucalyptus
capacity in South America finally impacted prices. Prices for
NBHK list prices in the U.S.
decreased $10 per tonne to
$870. NBSK prices increased
$45 per tonne, however, from
$945 to $990. The divergence
may continue over the medium
term as little capacity is expected for softwood grades,
while many of the new eucalyptus hardwood mills are just now
ramping up production.
The more interesting news in
the pulp industry came with the
November 2013 announcement
by China of preliminary antidumping duties against imports
of viscose dissolving pulp from
the U.S., Canada, and Brazil
after the Chinese government
reviewed a trade case brought
by dissolving pulp mills in China.
The duties range from 6.8% to
50.9%, and are company specific. Producers from other countries were not slapped with duties, nor were other grades of
dissolving pulp such as acetate.
Interestingly enough, the only
producer in the three countries to
avoid duties was Neucel Specialty Cellulose. Neucel is 100%
owned by Fulida, a Chinese
entity that produces rayon. Viscose dissolving pulp is one of
the major raw materials utilized
in the production of rayon.
The announcement is already having a large impact on
some producers. Fortress Paper, which spent $150 million to
convert its Thurso, Quebec mill
from NBHK to viscose production, announced 10 weeks of
market related downtime starting on December 22, 2013.
Paper Excellence, which had
planned on converting its mill in
Prince Albert, Saskatchewan to
viscose production, will now
switch to producing fluff pulp,
which is primarily used for incontinence products. Further
impact upon the dissolving pulp
industry likely will be realized.
Jesse Marzouk is a vice president and forestry products specialist. He has
appraised numerous U.S. and Canadian pulp, paper, and lumber-related companies
involved in manufacturing and distribution. Jesse received his MBA in finance from
Kellogg School of Management at Northwestern University, and has a degree in
finance and accounting from Indiana University.