Newsprint shipments totalled 745,800 tonnes in 2001, down almost 8% from 2000. This decline was mainly due to weak demand in the second half of 2001 and resulted in production downtime at Grand Falls-Windsor and Stephenville. Production was also impacted by a two-month mechanical breakdown at Grand Falls-Windsor. Despite the decline, production levels last year were the second highest on record.
The value of newsprint shipments last year was on par with 2000 at about $675 million, the result of a higher annual average price and a lower Canadian dollar. Prices were strong during the first six months of 2001, rising from an average of US$610/tonne in the first quarter to US$625/tonne by mid-year. Weak markets in the second half, however, resulted in a price decline to US$522/tonne in the fourth quarter.
Sawmill production is expected to reach a record 140 million board feet in 2001/02, a 4% increase from the previous year. About 50% of total production is exported to the U.S.
Production gains were realized in 2001 despite weakness in key export markets. Export tariffs were also an issue following the expiry of the Atlantic Canada-U.S. Softwood Lumber Accord which had given local producers unimpeded access to U.S. markets. While Atlantic Canada was exempt from the 19.3% countervailing duty placed on Canadian lumber exports, it was subject to a new 12.6% anti-dumping duty in October 2001 (which required the posting of bonds). The anti-dumping duty is expected to remain in place until May 2002, at which time a final decision will be made on the tariffs or some other mechanism to resolve the issue. |
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The Annual Allowable Cut (AAC), or the amount of wood permitted to be harvested each year, has been effectively reduced by 2% for the 2001-2005 period. The impacts of this reduction are minimal given that, over the past decade, industry has increased its annual output despite a stable AAC. This was accomplished through increased use of recycled fibre, fibre imports, improved technology, and increased fibre utilization.
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Newsprint production is expected to increase by 2% to 760,000 tonnes. |
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Newsprint prices are expected to strengthen from recent lows, but remain, on average, lower than 2001. |
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Lumber production is expected to increase marginally. |
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There is an expectation that the province will remain exempt from U.S. softwood lumber import penalties. |
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Both newsprint companies are expected to complete hydroelectric
power upgrades and begin selling power to Newfoundland and Labrador Hydro. |
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Corner Brook will hold the 2002 Forestry Capital of Canada designation. Program events will focus on community forest relationships and conservation awareness. |
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