Will the earthquake in Chile shake up the pulp supply and drive up prices?

[Samuel]

Mar 3, 2010 | In Mill Closures & Layoffs | Send feedback » http://foresttalk.com/index.php?blog=5&paged=2

The deadly earthquake in Chile over the weekend resulted in the temporary shutdown of about 4.5 million metric tonnes/year of market pulp capacity. Chilean pulp mills have temporary closed due to the destruction of infrastructure and the disruption of power transmission.

The Gerson Lehrman Group (GLG) are predicting that pulp prices will rise from the current $890/tonne US up to $940/tonne by the middle of the year, due in part to the Chilean earthquake, supply problems from the flooding in the southern USA and Indonesia, and because Canadian pulp mills are scheduling maintenance downtime in April.

The GLG predict that Tembec is one of the companies that will benefit from current scenario because of their highest leverage to pulp.

The GLG also predict that paper prices will increase from $25 - $40 US per ton.

Read their analysis:
Chilean earthquake could cause pulp supply crisis and escalating prices (Gerson Lehrman Group)

[Samuel]

The prices jumped nearly $40 per ADT already this month, expected to go up at least another $100 in the next 2.

[Texas Ranger]

Local supply house owner tells me 60% of sanded plywood comes from radiata pine mills in Chile,  watch those prices climb.

[Woodcarver]

Copper prices are expected to increase also because copper mining in Chile has been curtailed by earthquake damage.

[jim king]

Yes there was massive destruction in Chile due to the quake.  I will be the contrarian and say that with knowing a bit about the Chilein people in 8 months from know you will still find damage but the country will be running as if nothing ever happened.  And they will do it by themselves.

[HolmenTree]

Chile supplies in the neighborhood of 10% of the worlds pulp supply, so its definately going to be positive for N. American mills after the earthquake.
Willard.

[DirtForester]

Chile supplies in the neighborhood of 10% of the worlds pulp supply, so its definately going to be positive for N. American mills after the earthquake.
Willard.

This.  Though as another poster has mentioned, it will be temporary.

[Cedarman]

When a supplier stubs their toe for whatever reason and can't supply a product or service , it opens the door for someone else to step in.  Now is the chance for the new suppliers to capture market share by showing what they can do.  Doesn't guarantee you won't be dropped when the old supplier comes back on line.  But these opportunities don't happen every day.

[rcanderson1968]

A recent article in "The World" a newspaper serving Southern Oregon, reported that in direct response to the earthquake in Chile, Roseburg Forest Products has hired 84 full time workers to expand the company's production of sanded plywood.

Here's the link to the article:  http://www.theworldnewspaper.com/articles/2010/03/19/news/doc4ba3b4ac5651e874203374.txt

[mad murdock]

log prices in the NW seem to be holding at a fair level.  Talking with other foresters around, the quake is the main contibutor to the price stabilization.  How long it will last?  depends on how long it takes for Chile to get their plants, roads, infrastructure back up and running, i guess.  Make hay while the sun shines :-)