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Fire in Chile may affect pulp prices

The possible reduction in supply occurs during a scenario in which the entry into operation of new capacities puts pressure on raw material prices

A large-scale forest fire that has been affecting the Chilean regions of Ñuble and BíoBío since last week could be a factor supporting pulp prices. According to Arauco, which had to evacuate its factory due to the fire, it is not possible to foresee increases or decreases at the moment.

The possible reduction in supply, due to the impacts of the fire on the company’s production, happens during a scenario in which the entry into operation of new capacities puts pressure on raw material prices — and on the actions of producers.

“Arauco’s pulp production will not be affected, however, the behavior of prices depends on many factors”, declared the company. The company also reported that the fire reached the wood yard but had not reached the industrial area of the unit.

“Our immediate priority in the region is to protect employees, neighbors, homes and the environment,” stated Arauco.

However, according to the Brazilian newspaper Valor Econômico, pulp production was paralyzed, and the fire would have reached the industrial operations and the digester – essential equipment for the pulp production process. The unit, located in Ñuble, has the capacity to produce 1 million tons per year.

In this context, the company provided financial resources, equipment and firefighters to contain the spread of the fire, which started during an extreme heat wave in the country. The Chilean pulp company CMPC also contributed with resources to face the situation that has already placed the country in a state of catastrophe.

It is estimated that more than 60 hectares have already been affected by the fire, impacting the population with dozens of dead, hundreds of injured and homeless, in addition to missing people.

“We hope to be able to control these emergencies as quickly as possible, and we reiterate the appeal to the entire community to prevent risky behavior and alert if they detect a source of fire”, said Arauco, in a note.

The company’s prevention and combat strategy for the 2022/2023 fire season includes an investment of US$ 57 million, “with significant resources to prevent, combat and contain outbreaks”.

Valor Econômico
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