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North American printing paper markets assess labor settlement in Finland

Pulp & Paper, Aug 2005

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North American buyers of coated and uncoated printing mechanical paper grades heaved a collective sigh of relief that paper production restarted in Finland, but both buyers and sellers in mid-July were still analyzing the possible repercussions from the country's 56 days of downtime.

An estimated 1.7 million tonnes of paper capacity (almost completely printing and writing grades) were eliminated over nearly two months because of the labor disruption and mill lock-out, based on Pulp & Paper Week estimates.

A mediated agreement that was accepted by both sides July 1 ended an employer lockout that began May 18. The Finnish Forest Industries Federation said pulp and paper machines would start immediately. The companies that lost production because of the lock-out were UPM Kymmene, Stora Enso, and M-real.

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Stora Enso estimated that disruption to its production in Finland would reduce its operating profit by about Euro 3 million per day with second quarter results negatively impacted by approximately Euro 150 million.

Including wildcat union strikes since mid-April, Finland's pulp and paper industry lost an estimated 1.7 million tonnes of paper output-including nearly 1.6 million tonnes of printing and writing paper capacity-and nearly 430,000 tonnes of paper pulp. Based on FFIF estimates of daily losses at 50,000 tonnes of products and Euro 40 million, the disruption affected an estimated 2.8 million tonnes of output and Euro 2.2 billion in revenues.

A major U.S. supplier of several grades of printing/writing paper, Finland accounts for 11% of the U.S. coated mechanical market, 13% of the U.S. supercalendered (SC) market, and 10% of the U.S. directory market, according to RISI.

Despite resumption of production, delivery times for shipments from Europe to America are still uncertain. Sources said that with the North American catalog printing approaching its peak season, markets could still face a difficult time in the short term for paper supply.

North American printing paper markets assess labor settlement in Finland

Pulp & Paper, Aug 2005

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