Pulp mill headwinds persist – Alaska Highway News

Taylor restart ‘will not be considered’ until rail service improves for all plant operations, says Canfor

Canfor says it will not consider restarting its Taylor pulp mill until transmission service returns to more normal levels for all of its pulp mill operations.

This is despite “modest improvements” in British Columbia’s transportation network, as the company said in a second-quarter update on Thursday that “a limited rail service network” continues to put pressure on operations and shipments from its plant.

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

Canfor said it continues to “closely monitor supply chain challenges and will adjust future operating plans accordingly, through the remainder of 2022.”

“Notwithstanding the modest improvement in British Columbia’s transportation networks observed at the end of the second quarter, third quarter results are expected to reflect the continued impact and uncertainties associated with a limited rail service network and related pressures on [Canfor Pulp Product Inc.] operations and shipments,” the company said.

“Additionally, it is anticipated that a Taylor restart will not be considered until there is a return to more normal levels of transportation service to all CPPI pulp and paper mills.”

The Taylor mill produces bleached chemical-thermomechanical pulp, with an annual production capacity of 230,000 tonnes. The pulp is used for products such as packaging and fabrics.

The factory was first shut down for a “minimum” six weeks in February, then extended for another six weeks in March and again in May. The plant was also closed in December due to shipping disruptions caused by severe flooding in the Lower Mainland.

Company-wide pulp production decreased 103,000 tonnes, or 36%, from the second quarter of 2021, primarily due to Taylor curtailment and maintenance of its pulp mill from Northwood to Prince George, according to the report.

In its update, Canfor said pulp manufacturing costs are “significantly higher” compared to the same period last year, “primarily due to lower production combined with increases in pulping costs. market-related fiber as well as higher energy and chemical costs in the current quarter.”

The company said average unit sales of BCTMP had “modestly improved” quarter-over-quarter due to higher global demand, however, compared to the same period last year, they were significantly lower “as lower US dollar prices more than offset Canadian dollar weakness.”

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