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Pulp and paper

The figures quoted in the text are drawn from official sources and from trade journals. Some are provisional and may not tally with figures shown in the 1948 FAO Yearbook of Forest Products Statistics. They are useful, however, for disclosing trends. Metric units are used throughout the report, except where otherwise indicated.

WOOD-pulp production in 1948 is estimated as likely to reach a record figure of 28¼ million metric tons. An even higher total can be expected for 1949, assuming that the upward trend of production in Scandinavia, Central Europe, Latin America, Australia, and Asia continues and that good business conditions prevail in North America.

The outstanding features of the world situation in 1947/48 were, firstly, the continuous production increase in North America where, except for newsprint, a closer balance between supply and demand was established for the first time since before World War II; secondly, the still very low level of production in Europe and Asia, hampered by power, labor, and transportation shortages, with only slight improvements to set against vastly increased needs brought about by progress in sanitation, education, and the drive for higher living standards; thirdly, the planning of new but limited pulp-manufacturing capacity in Latin America, the Pacific area, and certain parts of Asia.

With a leveling off of demand in the U.S.A., production closer to capacity in Scandinavia, industrial recovery in Central Europe and Japan, and a further development of new pulp-producing capacity elsewhere, a considerable improvement in the supply situation within a limited number of years can be foreseen.

The development of new capacity is, of course, closely tied to raw-material supplies, and the need for further developments in improved cooking methods, utilization of waste wood, hardwoods, tropical species and other pulp-making materials, such as esparto and bamboos.

During the war, North America covered the essential wood-pulp requirements of the allied nations, which formerly depended mainly on the northern European countries for their supplies. The end of the war brought a quick resumption of international trade, which is tending to return gradually to its accustomed channels, with the important difference that for the present and coming years Germany, as an important exporter, and Japan, as a large importer, are eliminated.

The main impediment to a more rapid growth of world trade in pulp is the lack of foreign exchange, which vastly restricts the import possibilities of many countries all over the world. Another is inflationary prices, which continued to rise through 1947 and 1948, because of the increased costs of pulpwood, labor, coal, and raw materials. Manufacturers are, however, impressed with the necessity of stabilizing market rates in order to avoid a drop in world consumption. Growing resistance of North-American and Latin-American buyers to Swedish export prices finally caused the cancellation of the Swedish export tax, which produced a price drop in the American market.

World demand for pulp, at reasonable prices, will grow with increased paper consumption by countries becoming industrialized, and with the rapidly growing importance of pulp as a raw material for other industries. World production of various synthetic cellulose fibers can now be placed at close to 2 million tons, 15 to 20 percent of the world's annual fiber supply.

While production of newsprint has increased appreciably in Canada since 1937, it has fallen by almost one-half in the rest of the world. The capacity is there, but it is idle because of lack of raw materials, maintenance, and labor. This is the direct cause of the present acute newsprint shortage, which could be quickly eased by restoration of machine capacity to productivity. High construction costs and the uncertainty of sustained demand seem, in the opinion of the industry, to militate against any extensive additions to existing newsprint mills.

Production

Despite below-normal production in Europe and Asia since the war, world pulp production in 1947 is estimated to have reached the record figure of 26.5 million metric tons against 24.3 million tons in 1946 and 22.1 in 1945. Even greater output is expected for 1948 - the forecast being 28.25 million tons. Probably about 85 percent of world wood-pulp supplies are produced in North America and Scandinavia.

The 1947 production of pulp was about 2 percent greater than that of 1937, which was a record high year. This increase was primarily the result of the establishment of new pulp-making capacity in the South and on the West Coast of the U.S.A. and in western Canada. Mexico, Brazil, and the Argentine have also increased their sources of domestic pulp through newly constructed mills or by expansion of existing capacity. Australia, New Zealand, and India should soon be able to make a greater part of their pulp requirements. Far greater production would be evident but for the loss of capacity of the main prewar pulp-supplying sources.

Pressure on Sweden for pulp supplies when the world was at war and the strain of being compelled to use its forest reserves for fuelwood created repercussions that are now becoming clear. Finland and Norway both, in marked degree, suffered destruction of plant during the war, and Finland lost pulp-manufacturing capacity by treaty.

Besides these two, the greatest losses of pulp-making capacity occurred in Germany and Japan, both of which, apart from physical damage to mills, have lost a considerable part of their prewar production facilities by transfer of territory and of plants as reparations.

The extent of the war damage to the pulpwood resources of European countries has not so far been precisely determined, but is certainly considerable in Austria, Czechoslovakia, Poland, and Rumania, all of which had exportable pulp surpluses before the war.

Regarding market pulp supplies for the paper industry, a marked factor is the ever-growing competition of dissolving pulps. In some countries, a portion of the pulp capacity has been turned over to the making of dissolving pulps. The industries making rayon, staple fibers, plastics, and other new cellulose products have a future of unlimited expansion and growth.

PULP AND PAPER PRODUCTION IN NORTH AMERICA

The total production of all grades of pulp in 1947 amounted to just over 17.8 million tons compared to 11 million in 1937. This is the largest tonnage on record and was 2 million greater than in 1946. The United States produced 61 percent of the North American total, Canada 37 percent, and Newfoundland 2 percent.

The output of the paper and board industry reached an all-time high of 26 million tons in 1947, production in the United States amounting to 77.5 percent of the total, Canada contributing 21 percent, and Newfoundland nearly 1.5 percent.

United States of America. Pulp production increased by 12 percent from 9,622,000 tons in 1946 to 10,843,000 tons in 1947. Rayon pulp amounted to 371,000 tons or approximately 3 percent of the total output.

Total supply of wood pulp in 1947 was 12,841,000 tons against 11,225,000 a year earlier. This huge gain was almost entirely by integrated mills. Inadequate supplies of purchase pulp at prices that permit competition was a problem for mills lacking pulp-converting facilities.

With a total production of 19,078,000 tons, the U. S. paper industry topped the 1946 production record by 9 percent, a gain of 85 percent over the average output of 1935-39, which was 10,919,000 tons.

In 1947 the volume of business activity ran counter to forecasts of a recession which were prevalent at the beginning of that year. Instead of the predicted decline, practically all industries established new production records.

The trend continues into 1948. The domestic production of wood pulp (5,759,000 tons) during the first six months of 1948 exceeded the same period of 1947 by 6½ percent. Production of all types of paper and board also attained new records for the first half of 1948, amounting to 10,112,000 tons, an increase of 6 percent over the same period of 1947 and 18 percent over 1946.

The uncertainty prevailing early in the year seems to have been dissipated, and most of the industry expects a steady volume of business for the latter part of 1948. There are, however, definite signs that pro auction is catching up with demand, and that a closer balance between supply and demand is being achieved in the industry generally, with the exception of wrapping paper and newsprint.

Comparing physical production of paper-board and pulp with employment of production workers, it is obvious that productivity has increased materially.

This is largely the result of advanced pulp- and paper-making machines and equipment, with their faster and more efficient output.

Canada. Production of all grades of pulp amounted to 6,581,000 tons in 1947 as against 6,001,000 tons the year before. Dissolving pulp was 271,000 tons of the total output.

In 1946, production of paper and board was 4,733,000 tons; in 1947 it was close to 5,200,000 tons, an increase of nearly one-half million tons and a new production record.

For the first seven months of 1948, total production of chemical pulp can be estimated at 1,605,000 tons, that is to say, 164,000 tons higher than for the same period of 1947. In view of the favorable working and raw-material situation - a record 1947/48 pulp-wood cut may go as high as 25.5 million m3 ® - a considerable production increase for 1948 may be expected.

Newfoundland. The two plants producing pulp in Newfoundland cover the needs of the local paper mills, leaving around 10 percent of the output for export. After a drop in production in 1942 and 1943, output of pulp steadily increased to reach an all-time high in 1947 of 399,000 tons,1 2 percent of the North American total.

1 May not include screenings.

WORLD WOOD-PULP PRODUCTION, 1937 - 1947

COMPARATIVE TOTALS FOR COUNTRIES LISTING BOTH 1937 AND 1947 DATA

 

Production

1937

1947

Europe

8,726

6,160

North America

10,981

17,823

Other regions

921

376

TOTAL

20,628

.24,359

NEWSPRINT PRODUCTION IN NORTH AMERICA2

2 For more detailed information regarding newsprint attention is drawn to a survey entitled World Production of Newsprint, 1947, compiled by J. J. Zima, statistician, U. S. Newsprint Service Bureau, in co-operation with the Forest Products Branch, Office of International Trade, U S. Department of Commerce.

Taking advantage of unprecedented high demand, North American mills engaged in the manufacture of newsprint paper turned out 5,146,000 tons in 1947. This was an increase of 358,000 tons or 7 percent over the record 1946 production, but was apparently still insufficient to satisfy consumer demand.

Of the regional total, Canadian mills turned out 4,059,000 tons or not quite 79 percent, the U.S.A. produced 749,000 tons or approximately 14.5 percent, while Newfoundland production represented the rest.

For the first seven months of 1948 production again shows an upward trend, totaling 3,026,000 tons, making a net regional increase of 61,940 tons or 2.1 percent more than in the similar period of the previous year.

NORTH AMERICAN NEWSPRINT PRODUCTION 1939-1946-1947

Country

1939

1946

1947

(Thousands of metric tons)

Canada

2,603

3,776

4,059

United States

866

701

749

Newfoundland

277

311

338

TOTAL

3,746

4,788

5,146

PULP AND PAPER PRODUCTION IN EUROPE

European pulp production for 1947 can be estimated at 7 million tons compared to 11,494,000 tons in 1937. The general upheaval of industrial and economic activity in Europe has resulted in sharply curtailed production and consumption of pulp and pulp products compared to prewar. Shortage of coal retards larger output in Scandinavia; in other countries most mills find it difficult to procure raw materials (pulpwood, pulp, coal, and chemicals), machinery parts, and equipment. The lack of qualified manpower is another impediment to recovery. Unless special efforts are made, Europe's pulp industry cannot be expected to regain its prewar production levels for several years.

Scandinavia

Sweden, Finland, and Norway, which formerly produced more than half of all European pulp, are still well below their prewar output. The northern forests were overcut during the war and pulpwood output is now being reduced; at the same time the lack of coal has driven these countries to divert roundwood for fuel. Pulpwood output in 1947 was only 21.8 million ma ® compared to 33.9 million in 1937.

Finland. Production of all grades of pulp rose from 1,197,000 tons in 1946 to 1,450,000 tons in 1947, attaining 60 percent of capacity in spite of many difficulties in machinery and equipment, raw materials, and shortage of manpower.

The aggregate output of the paper mills, which in 1946 was 457,000 tons, rose by 14 percent to 518,000 tons in 1947, despite the exceptional drought which led to hydroelectric power shortages.

According to estimates, Finland is expected in 1948 to reach a production of more than 1 million tons of chemical pulp, compared to 955,000 tons in 1947.

Norway. Pulp production of the Norwegian mills showed an increase from 460,000 tons in 1946 to 632,000 tons in 1947, although most mills were only producing at about 48 percent of capacity. During the record year of 1937 Norway produced 1,087,000 tons of pulp.

Shortages of pulpwood, coal, and chemicals have prevented capacity from being used, and the severe drought of 1947 had a very serious effect on the mills, as in the other Scandinavian countries.

With the general improvement of the country's economic situation and barring unforeseen circumstances, 1948 should see another step toward complete recovery; the mills are expected to increase their production to 70 percent of capacity.

Sweden. Total pulp production improved slightly further from 2,680,000 tons in 1946 to 2,810,000 in 1947, reaching 79 percent of capacity; 312,000 tons, more than 10 percent of the 1947 output, were dissolving pulp.

Sweden will probably attain about 85 percent of its prewar pulp output during 1948. In view of the pulpwood situation, no further important increase in production is expected.

The output of paper and paperboard in 1947 exceeded 1,000,000 tons, against the prewar high of 1,063,000 tons of ten years before.

Central Europe

Notwithstanding the enormous difficulties with which most Central European countries are still faced, the output of pulp and paper has been constantly increasing since the end of the war and, with the exception of Germany, may attain prewar levels during 1948/49.

Austria. Total pulp production of all grades recovered from 74,000 tons in 1946 to 109,000 in 1947, approximately 25 percent of the prewar average.

Although the pulp and paper industry escaped with little direct damage from the war, it experienced an almost complete shutdown after hostilities ceased, owing to shortages of coal, pulpwood, and labor.

Before the war Austria produced more pulpwood than it needed for its own industries. Since then the forests have been seriously overcut, and immediately after the war the-need for fuel became so great that vast quantities of timber were felled for this purpose. However, the immediate situation is improving and a further increase in pulp-output for 1948 can be expected.

Paper and board production amounted to 148,000 tons in 1947, which is approximately half the 1937 output.

Czechoslovakia. In 1947, production of all types of pulp reached more than 70 percent of capacity, with an annual production of approximately 270,000 tons, about 20 to 23 percent below the prewar average output.

Production of the pulp and paper industry during the first four months of 1948, as a percentage of planned production for this period, is reported to be: chemical pulp, 82,987 tons (101 percent); paper, 91,512 (113.4 percent); paperboard, 25,834 (113.8 percent).

The 1947 production of paper and paperboard is reported as about 264,480 tons - approximately 80 percent of capacity and only 10 to 15 percent below the prewar average.

Production of chemical pulp from hardwoods will be undertaken for the first time in Czechoslovakia by a new mill to be established at Vranov in eastern Slovakia. If successful, the additional pulp output will offset the reported severe shortage of pine and spruce supplies.

Germany. With 2,483,000 tons, Germany was, in 1937, the world's fourth largest producer of wood pulp, and its production of paper and board amounted to 3,568,237 tons for the same year.

Because of the division of-Germany into zones, it is very difficult to get an accurate picture of over-all conditions in the pulp and paper industry, but it can be assumed that not even one-third of the prewar tonnage was manufactured in 1947.

The capacity of the German paper industry was subdivided between the zones approximately as follows:


(Percent)

U.S.A. zone

15.5

British zone

23.8

French zone

7.2

Russian zone

53.5

In the Russian zone, where the greater part of the industry is located, the most important factories not destroyed or damaged have been dismantled. It is reported that about 200 plants are operating. They produce about 80,000 tons of paper per year and should reach about 150,000 tons in two years, which suggests that they are all small plants.

In the American zone, approximately 16,000 tons of paper, 2,500 tons of board, and 5,000 tons of cellulose are produced per month. This production could be substantially increased if it were not necessary to allocate a large part of available wood supplies for heating purposes.

In the British zone, the production of paper, board, and pulp is about 15,000 tons per month, compared to 65,000 tons in peacetime. There are no large forest resources in the British zone, and the supply of raw material is made more complicated by the necessity to import from the other zones.

In the French zone the pulp and paper mills, for the most part, are not damaged but the lack of coal, pulpwood, and cellulose makes their economic operation almost impossible.

Hungary. Since Hungary has no timber suitable as raw material for its pulp mills, it must obtain its pulpwood requirements by import.

The productive capacity of the paper mills was 105,300 tons in 1947, compared with 117,300 tons in 1944, 90,000 tons in 1938, and 12,000 tons in 1925. The removal of one paper-making unit as reparations is responsible for the decline in output since 1944.

Poland. The total production of paper in 1948 is likely to exceed 253,000 tons, compared with 205,000 tons in 1947, when prewar production was surpassed.

Raw-material supplies in 1948 are expected to be greater than in the preceding year. Large sums are to be devoted to repair of rundown machinery and to maintaining regular supplies of power. Rehabilitation of war-damaged factories is reported to continue on a big scale.

Switzerland lacks sufficient resources to cover the entire needs of its paper-making industry. From 1930 on, however, the industry turned to an increasing use of domestic pulpwood and the war forced the industry to use domestic raw materials exclusively.

Wood-pulp production in 1946 totaled 108,000 tons as compared to 90,000 tons in 1937, almost meeting the 1946 requirements, reported as 128,000 tons.

Paper and board production for 1947 amounted to almost 200,000 tons, compared to approximately 150,000 tons in 1937. Domestic production now supplies more than 90 percent of requirements.

Western Europe

The pulp and paper output of several West-European countries could be increased if machinery and the necessary materials were procurable. Most paper mills, however, such as those in Denmark, the Netherlands, Belgium, France, and the United Kingdom, depend on imported pulp, which continues in short supply on domestic markets.

Notwithstanding these difficulties, certain western European countries have stepped up production considerably since the end of the war.

Belgium. Pulp production dropped from 66,000 tons in 1937 to as low as 4,000 tons in 1945. However, in 1946 it increased to 15,000 tons and attained 43,000 tons in 1947. Paper and board production increased from a total output of 196,000 tons in 1946 to 237,000 tons in 1947, surpassing the 1936 level.

France's pulp production - 354,000 tons in 1937 - was down to 82,000 in 1944. In 1946 it rose again to 262,000 tons and in 1947 it exceeded the prewar level by approximately 23,000 tons.

Paper and board production for 1947 reached 900,000 tons, exceeding 1946 results by 30 percent, and attained approximately 70 percent of the 1936-39 average annual output.

Monthly pulp production continued to rise through 1948, and a considerable increase in total output for the year is expected, reaching about 480,000 tons.

United Kingdom. Normally the pulp and paper industry in the U.K. is based on large imports of chemical and mechanical wood pulp, aggregating about 1,600,000 tons annually in prewar years. Shortage of wood pulp now prevents production from rising to higher levels.

A few pulp and paper plants suffered from direct war damage, but this was not so extensive as to impair seriously the production capacity of the industry, which has not altered materially from that of the basic prewar year. Mills are well equipped with special machinery to manufacture all grades of paper. No increase in capacity is likely in 1948.

The total production of paper increased by 43 percent in 1946 over 1945 and amounted to 1,736,000 tons. In 1947 the output remained practically the same as for 1946.

The estimate of production for 1948 has been set at roughly 10 percent above 1946 levels. The increase for newsprint has been put at 20 percent.

Netherlands. Total wood-pulp production in 1947 amounted to 145,000 tons, reaching approximately the prewar level.

Depending entirely on imported pulpwood, domestic production had been practically at a standstill for several years. Imports from the U.S.S.R. are being sought.

Total production of paper and board in 1947 amounted to 197,000 tons.

Mediterranean

Greece. Production of paper and board dropped from a level of 22,680 tons in 1937 to 9,304 tons in 1946. The total output of the industry in 1947 was expected to be about 80 percent of 1937, and estimates for 1948 indicate a rise of from 100 to 120 percent over the 1937 figure.

Italy. Total pulp production increased from 106,000 tons in 1946 to 161,000 tons in 1947. However, only 65,000 tons of this figure were chemical pulp, compared to the peak of 90,000 tons in 1941.

The 1946 paper and board production represented 36 percent of prewar figures. In 1947, 375,000 tons was reached or 70 percent of prewar output.

Turkey. Production of wood pulp was 6,000 metric tons in 1946, output being hampered by the shortage of domestic raw materials. It rose, however, to 11,000 tons in 1947.

Paper and board production was 17,000 tons in 1946 and 20,000 tons in 1947. Annual plant capacity is estimated at 23,000 tons and total requirements at 52,000 tons.

Soviet Russia. Paper production amounted to 812,000 tons in 1940, board to 127,000 tons. In 1947, production reached prewar levels again.

According to the new five-year plan, in 1950 production will reach 1,340,000 tons of paper, 65 percent more than in 1940. Special increase is foreseen in paper board and packaging papers.

NEWSPRINT PRODUCTION IN EUROPE

Output of newsprint in Europe rose from approximately 1,358,000 tons in 1946 to 1,452,000 tons in 1947. All producing countries, with the exception of the U.K. and Germany, increased or equaled their output, compared to 1946. The largest increase - 55,000 tons - was recorded by France, followed by Finland with an increase of 30,000 tons, Belgium 13,000 tons, Austria 8,000 tons, and Sweden 4,000 tons. Nevertheless, nearly all European countries are short of newsprint supplies and over-all output is still well below prewar levels.

Nowhere is the situation so dark as in the United Kingdom, where more than half a million tons per annum of newsprint capacity are currently lying idle. The U.K., which in 1946 was the world's fourth largest producer of newsprint, last year dropped to sixth place, behind Sweden and Finland, turning out 42,000 metric tons less than in 1946, which is equivalent to only one-third of the tonnage made in 1939. Compared with 1937, domestic production has fallen from 813,000 metric tons to 256,000 tons in 1947.

Among the Scandinavian producers, Finland had 220,000 metric tons of idle capacity in 1947 and in 1946 Norway had 80,000 tons. In the Netherlands, output in 1947 was some 60,000 tons under the 1937 level.

The main reasons for the idle capacity in Europe, which can be estimated at close to 900,000 tons, can be attributed to wartime destruction, overcutting of timber, shortages of raw material, transport, labor, qualified technicians, want of foreign exchange necessary for renewal of machines and equipment, diversion of newsprint machinery to production of more profitable papers, and diversion of pulpwood for fuel or to the more profitable cellulose products.

EUROPEAN NEWSPRINT PRODUCTION
1937 - 1946 - 1947
(Thousand metric tons)

Country

1937

1946

1947

Sweden

283

270

274

Finland

421

240

270

United Kingdom

813

299

256

France

*250

121

176

Norway

190

111

115

Germany

385

*73

*65

Belgium

54

32

45

Austria

83

30

38

Switzerland

40

40

40

Netherlands

96

31

40

Czechoslovakia

45

36

39

Italy

*60

129

34

Poland

37

28

35

Spain

19

13

14

Hungary

5

3

9

Portugal

...

2

2


2,778

1,358

1,452

*Exclusive of the soviet Union.

PULP AND PAPER PRODUCTION IN LATIN AMERICA

The growth of the paper and paperboard industry during the past ten years is illustrated by the fact that the annual average production for 1945-46 was almost double that of the period 1935-37. It is now estimated to rate at 56 percent of total consumption, as contrasted to 38 percent ten years ago.

This upward trend has been slowed down by postwar conditions, and the industry is still in the initial period of growth. Many plans have yet to be put into effect. Large shipments of pulp and paper-making machinery went in 1946 and 1947 to Argentina, Brazil, Chile, Cuba, Mexico, and Venezuela, which may be an indication of greater output to come. There is, however, a limit to the expansion possible because of scarce pulp supplies. Although pulp production has greatly increased in certain Latin-American countries, further developments will largely depend on the determination of the pulping properties of indigenous species. Some progress has been made in the use of other domestic pulping materials, such as bagasse, straw, etc.

Argentina. In Argentina, the current five-year plan calls for the building of two big cellulose factories. One, with a yearly capacity of 20,000 tons, will be built in the territory of Missiones; the other, with a capacity of 15,000 tons, will be built in the province of Buenos Aires. The aim is to make the country independent of pulp and paper imports by 1951. A special commission appointed by the government will make a survey of the forest species suitable for the manufacture of pulp products and investigate the costs of labor, transport, wood, and the best locations for establishing further plants.

Average annual production of paper and paperboard rose from 83,000 tons for 1935-37 to 132,000 tons for 1939-41, and to 150,000 tons for 1945-46.

Brazil. In Brazil, apart from approximately 3,000 tons of dissolving sulphite produced from cotton linters and waste, and about 3,000 tons of low-quality sulphite, no chemical pulp was produced until a short time ago.

Faced with a reduced supply of imported chemical pulp and in view of the growing demand for paper at very remunerative prices, modern, fair-sized mills are now being constructed, but the lack of equipment and pulp still impedes a rapid growth of the industry. In 1947 the domestic industry supplied at least 20,000 tons of the 100,000 tons of chemical pulp required by Brazilian industries. Production of mechanical pulp, in which the country is now self-sufficient, increased from 46,000 metric tons in 1942 to 60,000 in 1947.

This increased output is mainly due to Brazil's new paper mill, Industrias Klabin do Parana, at Monte Alegre, State of Parana, which in December 1947 was producing newsprint at the rate of about 60 tons daily, representing one-third of the country's newsprint consumption, and sulphite pulp at the daily rate of about 40 tons. For 1948 an annual output of 30,000 metric tons of newsprint is expected, which will eventually be raised to 40,000 tons.

Chile. Production of paper and board has almost doubled since 1937. Average annual production rose from 20,000 tons for 1935-37 to 34,000 tons for 193941, and to 37,000 tons for 1946-47.

Small local pulp-production is restricted to straw and mechanical pulp. However, investigations are being made into the possibilities of producing chemical pulp, for which the country possesses adequate forest resources and other raw materials.

Mexico produced 27,010 tons of pulp in 1946. Of this total, 15,189 tons were groundwood and 11,821 tons chemical pulp. Pulp production in 1947 was approximately 51,108 tons - 18,137 tons groundwood and 32,971 tons chemical pulp. This marks a substantial increase over the output in 1937, when the total was 18,636 tons 14,118 tons groundwood and 4,518 tons chemical pulp.

Contributing largely to output in 1947 is the unbleached sulphate pulp of the new kraft paper mill at Atenquique, Jalisco. Its annual production capacity is estimated at 26,400 tons.

The paper and board industry estimates its production for 1947 at 138,768 tons which means that output has doubled within the past 5 years.

Two new mills are now in process of construction, one for the manufacture of high-grade cigarette paper, with a capacity sufficient for domestic requirements, and the other for the manufacture of tissue paper.

Peru. Although wood pulp is not manufactured in Peru, bagasse pulp is combined with imported wood pulp in equal proportions for use by the paper industry, chiefly in the production of paper board.

The production of bagasse, which amounts to more than 5,000 tons annually, is almost five times as large as in 1940. The output is, however, limited by the high transportation costs of sugar cane.

The paper industry now operates at about 67 percent of capacity because of shortages of raw materials. Notwithstanding, the industry increased its output from 1,740 metric tons in 1937 to almost 18,000 tons in 1947. The effective capacity of Peruvian mills amounts to 25,200 tons (13,700 paper and 11,500 paperboard). Newsprint, better-quality papers, and most manufactures must be imported.

PULP AND PAPER PRODUCTION IN OCEANIA

Australia. The total production of pulp increased from about 600 tons in 1938/39 to nearly 94,000 tons in 1946 and 136,000 tons in 1947. Additional extension of total capacity to 160,000 tons is under consideration.

Paper manufacturing has been established in Australia for many years, but there was no marked development in the industry until about 1938/39, when plants for the production of pulp from native timber went into operation. The industry is chiefly centered in the states of New South Wales, Victoria, and Tasmania. Pulping plants, producing pulp from eucalypt timber, are operating in Victoria and Tasmania, while in South Australia pulp is being produced from locally grown softwoods.

The total paper and board production for 1947 was 182,000 tons.

In Tasmania, smallest state in the Commonwealth, are all the principal essentials of the newsprint industry. There is a combination of magnificent forests and unlimited water supply, which provide the raw material, water for treatment, and cheap electricity. From one machine now operating some 30,000 tons of newsprint are produced, but plans are already well advanced to raise the production above 70,000 tons.

New Zealand. The New Zealand government is planning the establishment of extensive state paper and pulp manufacturing works in the exotic forest reserves between Murupara and Kaingaroa. The announcement of the government's plan followed successful tests carried out recently in Tasmania, when New Zealand pulp was converted into newsprint.

New Zealand's west coast provides all the necessary natural factors for paper-making - abundant supplies of coal, water, and timber, and the introduced Pinus radiata reaches maturity there in about half the time that it takes in Canada. Actually the country lacks manpower and machinery, but paper-making could be a great industry for new immigrants, not only in the production of newsprint but also of papers required for butter wrapping, packing cartons for butter, honey, and many other products.

PULP AND PAPER PRODUCTION IN SOUTH AND EAST ASIA

India. The development of bamboo as an excellent paper-making raw material and the grant of protection in 1925 helped the progress of the home industry. In 20 years, the output of the industry increased from 37,000 tons to more than 122,000 tons.

Plans have been made to establish a plant for the manufacture of newsprint, using indigenous hardwoods as raw material, and production is expected to be at a rate of 100 tons daily within two years. The Industrial Panel on paper and board industries in India has recommended production targets for various kinds of papers of 268,000 tons in 1951/52 and 478,000 tons in 1956/57.

Japan. The impact of shortages during World War I resulted in the development of a domestic pulp and paper industry, which in 1940 was the largest in the East, and placed Japan among the leading pulp and paper-producing countries of the world.

Japan attained virtual self-sufficiency in paper pulp by 1938. The loss of the southern part of Sakhalin, of overseas imports, and the shortage of pulpwood, coal, and chemicals reduced domestic pulp production from its peak of 1,277,000 tons in 1941 to 232,000 tons in 1945 (18 percent of 1941), about 25 percent of the rated production capacity of the remaining mills. After a temporary decline in 1946, production rose to 284,000 tons or 32 percent of capacity in 1947; 167,000 tons of the total output were mechanical pulp.

Rayon pulp output expanded rapidly from 4,000 tons in 1932 to 295,000 tons in 1941, but in 1945 it was only 10,000 tons, about 5 percent of rated production capacity.

Pulp production increased to 109,000 tons in the first four months of 1948, compared with 74,000 tons in the corresponding period of 1947.

The total paper and board output was 210,000 tons in 1946 and 287,000 tons in 1947, as against 787,000 tons in 1935 (last prewar data available).

Gains also were noted in paper production in the first four months of 1948, over the corresponding period of 1947. The index of the paper output was 55.6 in April (1930-34 = 100) as compared with 38.6 in: 1947, 28.4 in 1946, and a high of 174.7 in 1940.

China. In China, wood pulp provides approximately 10 percent of the raw materials reported to be used in papermaking. Nine thousand tons of wood pulp were consumed in 1946, compared with 91,000 tons of other vegetable fiber pulps.

Trade

International pulp trade is tending to return to prewar patterns. However, the relative scarcity of pulp supplies from the major European producing countries plus dollar shortages are the main impediments to any further recovery in the volume of world trade.

Canada, having doubled its exports since 1937, supplies mainly the U.S.A., some of its old customers in Latin America, and the British Commonwealth.

The U.S.A. has dropped out of international trade as an important exporter of wood pulp. Sweden partly fills the gap, but Finland also has made successful efforts to re-establish its export trade.

With the progressive rehabilitation of the Central European economy, Austria may soon resume its former importance on the supply market, although Germany is likely to be eliminated for several years to come.

PULP AND PAPER TRADE IN NORTH AMERICA

United States. Pulp imports in 1947 of more than 2.1 million tons, nearly half of all world imports, represented a gain of around 270,000 tons over 1946, when 1.6 million tons were imported. The record figure still stands at 2.2 million tons, imported in 1937.

Canada supplied 65 percent of total U.S. imports in 1947, Sweden 25 percent, and Finland about 10 percent.

In the first six months of 1948, pulp imports approximated 1,090,000 tons, a striking increase (15 percent) compared to the same period of the previous year. Canada is again the largest supplier, with slight gains in deliveries from Sweden and Finland. However, there is some curtailment of demand for market pulp because of increasing resistance against prices of overseas pulp.

In 1947 the paper and pulp market created dollar exchange at the rate of over $50 million a month or $600 million a year. In 1946 the figure was $419 million. These dollars are available to the countries that supply the U.S. market with newsprint, pulp, and pulpwood.

Canada's economy stands to gain most from exports. In 1946 its total exports of paper, pulp, and pulpwood were valued at more than $425 million. Eighty-eight percent of its pulp exports, practically all of its pulp wood, 84 percent of its newsprint, and 23 percent of other paper manufactures went to the U.S.A. In 1947, the percentages for pulp and newsprint were 88 and 87 respectively. The value of Canada's total exports of pulp and paper in 1947 is put at $530 million, or 20 percent of the value of all foreign trade ($2,673 million).

PULP AND PAPER TRADE IN EUROPE

Exporting Countries

Finland. Finnish exports of wood pulp increased by 30 percent from 555,000 tons in 1946 to 734,000 tons in 1947, but were still only half of the 1937 all-time high of 1,470,000 tons. Nearly 454,000 tons went to the United Kingdom and the U.S.A., 118,000 tons to Soviet Russia, about 136,000 tons to Europe, and the balance mainly to Latin America.

Pulp exports, which make up about one-quarter of the entire exports of the country, are likely to show about a 10 percent increase in 1948 over 1947, provided labor peace is maintained in the industry and costs are kept under control. For the first four months of 1948, shipments of chemical pulp were nearly three times greater than during the same period of 1947, rising from 96,970 to 232,652 metric tons, but this is mainly because shipping conditions in the winter and early spring of 1947 were very unfavorable.

During 1948 the U.S.S.R. absolved Finland of further obligation to deliver pulp and paper for reparations until the end of 1952. This action will, without any doubt, increase the availability of Finnish pulp, when it is considered that Russia received during 1947 nearly 97,000 tons of reparations pulp from Finland.

Norway. Total exports of all pulp grades amounted to 179,000 tons in 1946 and 241,000 tons in 1947, not quite a third of the 1937 level, which, however, marked an all-time high.

As the paper and board mills are operating close to capacity, any increase in pulpwood supplies should increase the availabilities of mechanical and chemical pulp for export. It is not anticipated, however, that there will be any important increase this year.

INTERNATIONAL TRADE IN WOOD PULP

(Thousand metric tons)


Country

EXPORTS

1937

1947

Europe

Austria

186

9

Belgium

23


Czechoslovakia

138

44

Finland

1,470

734

France

40

2

Germany

166

...

Norway

655

241

Poland

3

---

Sweden

2,577

1,797

Switzerland

7

...

United Kingdom

---

1

North America

Canada

790

1,541

Newfoundland

3

40

United States

290

118


Country

IMPORTS

1937

1947

Europe

Austria

4

1

Belgium

146

207

Czechoslovakia

9

...

Denmark

82

72

France

665

295

Germany

182

...

Greece

24

7

Hungary

41

...

Ireland

6

19

Italy

250

182

Netherlands

112

135

Norway

19

35

Poland

23

15

Portugal

...

13

Spain

125

26

Sweden

---

4

Switzerland

21

61

United Kingdom

1,796

876

Yugoslavia

22

...

U.S.S.R

70

121

Near East

Turkey

...

5

North America

Canada

19

26

Newfoundland

---

---

United States

2,155

2,115

Latin America

Argentina

42

47

Brazil

100

104

Chile

15

19

Cuba

10

27

Ecuador

3

---

Mexico

36

44

Peru

1

7

Uruguay

4

6

Venezuela

3

6

South and East Asia

China

15

8

India

10

5

Japan

470

6

Pacific

Australia

45

34

New Zealand

5

10

*Less than 500 m.t
... Not available
--- None.

Sweden's total export of pulp dropped slightly from 1,805,000 tons in 1946 to 1,797,000 tons in 1947, approximately 70 percent of the 1937 figure. This de crease is due to a decline in mechanical pulp exports of around 40,000 tons. The shift in exports towards bleached grades has been accentuated since the end of the war.

The largest single buyer in the Swedish market in 1947 was the U.S.A., which took 30 percent of all exports. Twenty-one percent went to the United Kingdom, 36 percent to the rest of Europe, 11 percent to Latin America, and 2 percent to countries of Asia.

Pulp exports during the first six months of this year, amounting to around 800,000 tons, represented a gain over the 715,815 tons exported in the corresponding months of 1947, while paper exports for the same periods were 237,675 tons and 201,832 tons.

It is anticipated that returns for the later part of the year will show some shift of markets, because of cancellations of U.S.A. purchases and a notification by Argentina and Brazil that these countries would no longer be able to pay for pulp purchases in dollars.

According to Swedish officials, the timber situation will not permit any appreciable increase of exports during the next ten to twenty years.

Exports in 1947 of paper and board, excluding newsprint, amounted to 285,691 tons. Nearly 150,000 tons of newsprint were exported, compared with 120,000 tons in 1946 and 200,000 in 1937, which was the Swedish industry's best year.

The former pulp-exporting countries of Central Europe now contribute practically negligible amounts to the European market.

Austria. Although Austria's pulp exports increased slightly between 1946 and 1947, they are still very far below the record figure of 186,000 tons in 1937. Total exports of pulp and pulp products for 1937, 1946, and 1947 amounted to 335,900, 17,400, and 42,960 tons respectively.

Czechoslovakia increased its pulp exports from 28,000 tons in 1946 to 44,000 tons in 1947, but this figure barely constitutes 30 percent of the prewar rate. Paper exports, which nearly tripled from 10,000 tons in 1946 to 28,0.00 tons in 1947, are just 10 percent of the record year of 1937.

Germany. Until 1936, Germany was, after the Scandinavian countries, the most important pulp exporter in Europe, attaining a record figure of 308,000 tons in 1934. In 1937 paper exports reached an all-time high of 430,000 tons. Presumably, many years will pass before Germany again becomes an important factor in the European pulp and paper market.

Importing Countries

With the cessation of central European pulp exports, the various European importing countries are limited in their sources of supply to the Scandinavian countries, an exception being approximately 127,000 tons of pulp shipped from Canada to the United Kingdom. Trade is governed in many instances by bilateral agreements, designed to permit or restrict the shipment of goods according to the currency situation.

Most countries need, of course, considerably more pulp than they get or can afford to buy. It is, how ever, expected that import prospects for 1948 will prove to be more favorable than in 1947.

France. Before the war France imported, mainly from Scandinavia, 665,000 tons of pulp. After falling away practically to nothing, receipts rose to about 200,000 tons in 1946 and 295,000 in 1947. Imports from Finland amounted to only about a fifth of its prewar share and from Norway to about a third.

United Kingdom. In prewar years, imports of chemical and mechanical wood pulp aggregated about 1,796,000 tons annually. In 1947, imports totaled 876,000 tons, not quite 50 percent of prewar.

It is estimated that requirements for 1948 will be 80,000 to 100,000 tons above 1947. Because of the favorable British trade balance with Sweden, it is anticipated that a substantial part of the additional requirements will be purchased from Sweden. Total requirements include 254,000 tons of paper-grade chemical pulp and 68,000 tons of dissolving sulphite pulp.

Sweden's exports of all grades of pulp to the United Kingdom for 1946, 1947, and the first six months of 1948 were 532,169, 429,026, and 209,648 tons respectively.

Total imports of paper and boards in 1947 were 470,000 tons, which compares with 294,000 tons in 1946 and 379,000 tons in 1937. The 1947 figure represents not quite 40 percent of the prewar total.

Exports of paper and boards reached a total of 113,000 tons in 1947, slightly less than in 1946 (115,000 tons) and just over half of prewar levels (391,000 tons).

Italy. After two years of virtually no supplies, pulp imports increased from 119,000 tons in 1946 to 182,000 tons in 1947, which is about half of the record year of 1935. Imports of paper and board were 15,000 tons in 1946 and 19,000 tons in 1947.

In Belgium and the Netherlands, imports of pulp, although below requirements, have exceeded the prewar level.

PULP AND PAPER TRADE IN LATIN AMERICA

Lack of dollars is the most serious obstacle in the South American pulp and paper market. The problem is particularly acute in Argentina, where there exists a big demand for imported papers, but the government grants virtually no import licenses.

However, the long-term outlook for pulp and paper exports to South America is favorable. Potentially, Latin America is a huge market, mainly for manufactured products, and local production will take many years to catch up with demand.

During the war the U.S.A. was the main source of supply for pulp. In 1945, Sweden resumed its prewar leading position in pulp imports and in 1947 provided 193,000 tons out of the total recorded imports of 258,000 tons, the balance coming from the U.S.A. (26,900 tons), Finland (18,000 tons), Canada (12,400 tons), and Norway (6,900 tons).

WORLD TRADE IN NEWSPRINT

Only five countries - Canada, Newfoundland, Finland, Sweden, and Norway - are important exporters of newsprint.

The most important, Canada, exported 95 percent of its 1947 production (3,829,000 metric tons) to all parts of the world. The largest market was the U.S.A., absorbing 87 percent of Canada's exports; 152,000 tons went to Latin America; 147,000 tons to Australia; about 66,000 tons to Europe, where the United Kingdom is the largest customer, taking 58,000 tons; 36,000 tons went to Africa; and nearly 54,000 tons to Asia.

Ninety-eight percent of Newfoundland's production is for export, since local consumption is insignificant. In 1947 exports amounted to 331,000 tons; 56 percent went to the U.S.A., the rest to the United Kingdom, Australia, and Latin America.

Finland exported 247,000 tons in 1947, home consumption being limited by law to 9 percent of production; 71,000 tons went to the U.S.A., 105,000 to Europe, 54,000 to Latin America, and 12,000 to Asia.

Sweden's exports, amounting to 150,000 tons, slightly more than 50 percent of production, went to more than 50 different countries. The most important customers were Argentina (35,000), the U.S.A., (28,000), and France (10,000).

Norway's exports amounted to 96,000 tons and were about five times the apparent domestic consumption. The most important markets were Argentina (27,000), Denmark (14,000), and India (12,000).

Of all other European countries only Austria and France exported more than 10,000 tons each.

The U.S.A. imported about 3,600,000 tons in 1947, 97 percent originating in Canada and Newfoundland, the balance coming from seven European countries.

Latin America received 375,000 tons of newsprint in 1947, 215,000 of which was shipped from North America and 160,000 from Europe. Argentina was by far the largest importer, with 147,000 tons, followed by Mexico with 59,000 tons, Brazil with 58,000 tons, and Cuba with 23,000 tons.

A total of 120,000 tons was shipped from North America to Europe. The larger part of these shipments, 110,000 tons, went to the United Kingdom. Of the newsprint produced in Europe, 44,000 tons went to Denmark, 34,000 to Soviet Russia, 27,000 to the United Kingdom, 24,000 to France, 19,000 to Belgium, 10,000 each to the Netherlands and Portugal, and 9,000 tons to Greece.

In Africa, the largest importer was the Union of South Africa, which took 53,000 tons. Egypt received 8,000 tons.

A total of 122,000 tons, 27,000 more than in the previous year, were imported into Asia. Total imports of Australia and New Zealand were recorded as 199,000 tons, 21,000 more than in 1946.

Prices

The scarcity of wood pulp in relation to requirements, increased costs, rising wages, and the international character of the market for wood pulp have caused a continuous increase in market prices. However, dollar shortages and the resistance of American buyers may now have a stabilizing effect.

The U.S.A. position may be cited as an example. In 1926 bleached sulphite sold in the U.S. market at $83.88 per ton; in 1939 at about $55 per ton. In July 1948, North American contract prices for bleached pulp had advanced to $139-$149. The advance over 1939 approximates the average increase in agricultural and manufactured products.

Imports of wood pulp from Europe were resumed in July 1945. However, from that time to November 1946, prices for these imports were identical with OPA maximum prices for domestic pulp. Basic transportation allowances were granted.

In December 1946 the Swedish prices (ex-dock New York) were raised for the first time and in the second quarter of 1948, prices for bleached sulphite ranged from $204 to over $220 per ton. Although American buyers grew more and more reluctant, and cancellations were made, Swedish manufacturers reaffirmed their third-quarter quotations.

With the lifting of the Swedish export tax in the beginning of September - it amounted to around $13 a ton - the prices of Swedish pulp have now been reduced by $11 to $22 per ton, with bleached sulphite running from $182 to $187. Bleached sulphate running now from $176 to $193 used to sell for $204 to $209. Unbleached sulphite is $11 to $19 per ton lower than previously quoted.

Finnish pulp producers have reduced their fourth-quarter export prices to a level approximately that of the new Swedish quotations.

For the third quarter of 1946, Swedish pulp to the United Kingdom sold at the following prices per ton:

£14.17.6 for bleached sulphite - f.o.b. Swedish ports
£34. 0.0 for strong sulphite - f.o.b. Swedish ports
£32.12.6 for Kraft - f.o.b. Swedish ports
£17.17.0 for mechanical pulp - f.o.b. East Coast port

AVERAGE PRICES OF DOMESTIC AND FOREIGN SULPHITE IN THE U.S.A.
(Dollars per metric ton)

Average controlled O.P.A. maximum prices for Domestic and Canadian Sulphite (delivered1)


Bleached

Unbleached

1942

$ 82.43

$71.85

1943

83.75

72.73

1944

93.01

80.01

1945

94.77

81.55

1946

105.13

90.80

Domestic and Canadian
Sulphite (Delivered1)

 

Bleached

Unbleached

1947

130.92-137.53

123.86

1948

138.85-148.77

137.75-143.26

European Sulphite
(ex-dock New York)

 

Bleached

Unbleached

1947

136.98-188

132.68-158.69

1948

199.02-209.82

166.18-178.08

1 Delivered, with maximum freight allowances.

In December 1947 an agreement was reached with the British Paper Control on the prices for the first half of 1948, implying an increase-of £4.10 per ton for chemical pulp and of £5 for mechanical pulp, as compared with the prices at the end of 1947.

In June, the average price for bleached chemical pulp amounted to £49.3.11, which compares with a price of £15.17.3 in 1938.

The price reduction on the American market as the result of the abolishment of the Swedish export tax may result in continued American purchases on or about former levels. In that case no drop in prices on other markets is likely.

An increase in the price of newsprint, bringing it to $106 per metric ton plux tax in Canada, has recently been announced. The new price is double that prevailing in 1941. The cost to the consumer in Canada is now $114.26, with the addition of the sales tax. The all-time high in New York was $124.09 in 1920.

Newsprint producers stated that their costs, especially in logging and labor, have increased so fast that the last $6 jump which went into effect in January 1948 did not cover them and that newsprint is selling below the level of other commodities.

Consumption

There has been a steady increase in consumption of wood pulp in the United States since the end of the war by the paper and board industries and by the chemical industry. In 1947 the paper and board industries consumed close to 12 million tons of wood pulp, 10 percent more than in 1946 and 54 percent more than in 1939. For the first five months of 1948, pulp consumption was 8 percent greater than for the corresponding period of last year.

The pulp consumption of the rayon industry increased from 293,000 tons in 1946 to 364,000 tons in 1947. No data are available for the consumption of dissolving pulps for the production of other chemical products, but such consumption is undoubtedly also on the increase.

Although the requirements in most European countries for pulp and pulp products have grown considerably since the war, consumption is at a very low level - approximately 40 percent of what it was in the prewar period - for reasons which have already been given. Although Germany will not be important as a major consumer of pulp and pulp products for the next few years, most European countries hope to increase their standard of living, which should raise consumption above the prewar level, once supplies are available.

WORLD WOOD PULP SUPPLIES AVAILABLE FOR CONSUMPTION
(Thousand metric tons)

 


1937


1946


1947

Percentage Change 1947 versus

1937

1946

Canada

3,892

4,727

5,008

+29

+6

Newfoundland

317

351

355

+12

+1

United States

7,842

11,225

12,841

+64

+14

North America

12,051

16,303

18,204

+51

+12

Finland

831

648

722

-13

+11

Norway

459

325

471

+3

+45

Sweden

981

878

1,023

+4

+17

Northern Europe

2,271

1,851

2,216

-2

+20

Other countries

9,952

*5,463

*6,100

-39

+12

WORLD

24,274

*23,617

*26,520

+9

+12

WORLD NEWSPRINT CONSUMPTION
1939-1946-1947
(Thousand metric tons)




1939


%


1946


%


1947


%

% Change 1947 vs

1939

1946

United States

3,217

47

3,897

61

4,312

62

+34

+11

Rest of World

3,680

53

2,529

39

2,631

38

-29

+4

World Total

6,897

100

6,426

100

6,943

100

+1

+8

NEWSPRINT CONSUMPTION IN U.S.

Year

Population

Thousand Metric Tons

Kg Per Caput

1929

121,526,000

3,429

28.2

1933

125,770,000

2,440

19.4

1937

129,257,000

3,475

26.9

1946

141 229 000

3,897

27.6

1947

143,382,000

4,312

30.1

The greatest drop in consumption appears to have occurred in Asia, where consumption seems hardly to reach 25 percent of prewar.

On the other hand, in certain Asiatic countries, for instance India and China, large social and industrial development programs should mean an increasing pulp and paper consumption.

Even a small increase in the per caput consumption of pulp products of only 2.3 kilograms (5 pounds) a year in China and India would mean an additional consumption of 2¼ million tons for these two countries, which have about 40 percent of the world population within their borders. This would require a tremendous increase in domestic manufacturing capacity, since supplies from other continents are not likely to be available in quantity.

If the demand for pulp and paper increases steadily throughout the world, which is probable in view of the rapidly growing importance of pulp as an industrial raw material (the urgent need for textiles and clothing in Europe and other parts of the world and the growing extension of the plastics industries absorb ever-growing quantities of dissolving pulps), it seems likely that it would be possible to create sufficient manufacturing capacity to keep pace with demand.

Long-term plans for increased and new capacity have already been made public for Latin America, China, India, Australia, New Zealand, and Alaska. However, due consideration will have to be given to sustained raw-material supplies. In this connection, improved pulping methods, utilization of waste, and tropical hardwoods will play an important role in the future.

NEWSPRINT

In 1939 total world consumption of newsprint paper amounted to 6,897,000 tons, 47 percent of which was consumed by the U.S. and 53 percent by the rest of the world. Since 1939 U.S. consumption has increased by 34 percent. Europe's consumption, on the other hand, has dropped by 29 percent. Total world consumption for 1947 was about 1 percent over 1937.

In 1947 newsprint consumption in the U.S. reached a new record-breaking peak of 4,312,000 tons. This was an increase of 415,000 tons, or about 10½ percent, over 1946, the previous record year.

For the first time since 1929, consumption has exceeded the growth in population in the U.S. The 1947 per caput figure was 1.9 kg greater than the previous all-time high of 28.2 kg in 1929.


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