Filed under: Dissolving Pulp

Dissolving Pulp Markets

by on May 13th, 2011

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In the midst of one of the most turbulent and uncertain periods for the pulp and paper industry worldwide, a resumed interest in one product is helping the industry turn around: dissolving pulp.

Also known as specialty cellulose, dissolving pulp is no ordinary wood pulp. It is a highly refined pulp used in products such as cellophane, film and computer chips. It’s primary use, however, is in the creation of rayon, a human-made, silk-like product growing in popularity within the textile industry.

“With record-high cotton prices more and more textile producers are switching from cotton to synthetic and man-made cellulosic fibers, such as rayon from dissolving pulp,” wrote Industry Intelligence, a US-based research firm. “At the highest estimate some 23 million tonnes of commodity dissolving pulp supply would be needed by 2020 – an average of 2.3 million tonnes per year and a huge business opportunity for wood pulp producers.”

That opportunity was seized last year by Vancouver-based specialty paper producers Fortress Paper Ltd. when they purchased a pulp mill in Thurso, Quebec in order to convert it into a dissolving pulp facility.

“The combination of short supply and strong demand for dissolving pulp has created a robust market,” the company said in a public corporate update this week. “Along with recent announcements of increased capacity in dissolving pulp from conversions and brownfield projects, there have also been corresponding announcements of additional viscose staple fiber capacity. The Company believes that it is well positioned to benefit from the expected timing of completing its conversion at the Fortress Specialty Cellulose Mill to produce dissolving pulp within the next five months.”

“Prices for dissolving pulp are ‘on fire,’ reaching $3,000 per tonne on the spot market as global demand explodes,” Paul Quinn, an analyst for RBC Capital Markets told the Globe and Mail last month.

SOURCES:
Digital Journal: “Fortress Paper Provides Corporate Update – Press Release”
Industry Intelligence: “Dissolving Pulp – Feast Of Famine For The Market Pulp Business”
The Globe And Mail: “Tembec Poised To Benefit From Rising Pulp Prices”

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