Canfor Pulp Products (CPPI) reported its financial results for the fourth quarter of 2024, showing an operating profit of $4 million and a net profit of $3 million, equivalent to $0.04 per share. Stable market fundamentals and a reduction in inventories by producers contributed to this positive performance in the period.
Despite the slight recovery, the company’s pulp production fell 22% compared to the third quarter of 2024, reflecting the indefinite stoppage of a production line at the Northwood NBSK mill, announced in August last year. CPPI also continues to face structural challenges related to the availability of economic fiber in British Columbia, a factor that impacts its operating costs.
The pulp segment reported an adjusted operating profit of $1.5 million for the quarter. The company’s overall performance was mainly driven by a moderate increase in unit sales of paper, especially in the North American market, as well as growth in production in this segment compared to the previous quarter.
GLOBAL PULP MARKET AND PRICES
The fundamentals of the global softwood pulp market remained relatively stable during the quarter, after a moderate decline in the third quarter of 2024. However, at the end of the period, global demand and purchasing activity showed a slight improvement as producers reduced their above-average inventories.
World stocks of softwood pulp ended in December 2024 with 42 days of supply, a reduction of seven days compared to September 2024. As a reflection of this movement, NBSK pulp prices for China, the largest global consumer market, closed December at $770 per ton. During the quarter, prices averaged $767 per ton, representing a drop of $4 per ton, or 1%, compared to the previous quarter.
OUTLOOK FOR 2025
CPPI projects a gradual improvement in global softwood pulp market conditions throughout the first and second quarters of 2025, driven by the balance of supply and the normalization of producer inventories. On the demand side, the Chinese market is expected to continue absorbing changes in global supply.
The company also closely monitors trade relations between Canada and the United States, especially the impact of tariffs on exports. To mitigate any negative effects, Canfor Pulp is focusing on market diversification and strengthening its portfolio of high value-added specialty products.
On the other hand, the availability of economically viable fiber continues to be a challenge, directly impacting the company’s operating costs. Rising log prices and transportation costs in British Columbia are expected to increase the costs of supplying fiber to its pulp mills, both in the case of sawmill residual chips and whole logs. In response, CPPI will continue to evaluate its operating conditions and adjust its production rates according to the availability of raw material.
SCHEDULED MAINTENANCE STOPPAGES
For 2025, the company does not expect any major maintenance outages in the first two quarters. In the third quarter, a maintenance stoppage is scheduled at the Northwood mill, with an estimated reduction of 10,000 tons in NBSK pulp production. In the fourth quarter, the Intercontinental NBSK mill will also undergo maintenance, impacting production by approximately 5,000 tons.
Furthermore, in the paper segment, CPPI projects relatively stable demand for bleached kraft until the end of the first quarter of 2025. A maintenance stoppage on the paper machine is planned for the fourth quarter, which should reduce production by around 5,000 tons.
