Canfor Pulp (CPPI) announced its third-quarter 2024 results, reporting an operating loss of $209 million, primarily due to reduced fiber availability following sawmill closures in British Columbia, Canada. This amount includes a $211 million asset impairment and a loss provision for the pulp segment.
Excluding one-time items, adjusted operating income was $2 million, a reversal from the adjusted loss of $6 million in the second quarter. The slight recovery is attributed to increased unit sales of NBSK pulp, supported by stable prices in North America, though the Chinese market remains weak, with high inventory levels from pulp producers.
The shortage of fibers, a long-standing challenge for CPPI, has led the company to reduce production lines, such as at its Northwood facility in August, and focus on investments to improve fiber recovery and efficiency. Since 2023, reductions at Prince George and Northwood units have cut the company’s annual kraft pulp capacity by approximately 580,000 tons.
President and CEO Kevin Edgson acknowledged the persistent challenges in accessing affordable fiber and the production cutbacks. “The company continues to face persistent challenges accessing economic fiber, the results of which led to another curtailment of our operations this quarter. These decisions weigh heavily on our results, as well as our employees, their families and the local communities. Despite these challenges, our business realized improved adjusted operating earnings this quarter, and we executed a safe, smooth and efficient wind down of one line at Northwood”, he stated.
In the third quarter, NBSK pulp prices for China dropped to $750 per ton in August, stabilizing at $754 per ton in September, with an average of $771 per ton, down 5% from the previous quarter. Production in the period was 125,000 tons, a 4% decrease due to the Northwood closure.
For the fourth quarter, CPPI anticipates a slight recovery in the global long-fiber pulp market, with increased demand from China and normalized post-summer inventory levels. The company will continue to assess fiber supply conditions and may adjust operations according to economic viability, impacting long-term operational plans and liquidity.