UPM will temporarily halt production at its Kaukas pulp mill in Finland beginning in early August, as Nordic pulp producers continue to grapple with weak European demand and growing competition from expanding Chinese production capacity.<\/p>\n
The shutdown at Kaukas is expected to last approximately six weeks. UPM has also announced plans for a separate production curtailment at its Pietarsaari pulp mill, currently scheduled for October.<\/p>\n
According to the company, the measures are intended to adjust production volumes and wood procurement activities to current market conditions and cost levels while maintaining profitability.<\/p>\n
The announcement comes as concerns grow across the Nordic pulp sector over weakening market fundamentals. Demand for pulp and paperboard in Europe has remained subdued for an extended period, while producers have struggled to offset weaker European consumption through exports to other regions.<\/p>\n
One of the key challenges facing Nordic producers is China's increasing self-sufficiency in pulp production. New capacity additions in China have reduced import demand and intensified competition in global markets, limiting opportunities for European producers to redirect volumes outside their traditional markets.<\/p>\n
Weak demand and rising competition weigh on margins<\/strong><\/p>\n According to Antti Viljakainen, chief analyst at Finnish investment research firm Inderes, the outlook remains difficult for Nordic softwood pulp producers.<\/p>\n \"The framework looks challenging. Difficult times are continuing from the perspective of Nordic softwood pulp producers,\" Viljakainen told Kauppalehti.<\/p>\n Market conditions have become increasingly challenging as pulp prices have failed to keep pace with production costs at several Nordic mills. While energy costs have moderated from previous peaks, producers continue to face pressure from wood costs, logistics expenses and generally weak demand across key paper and packaging segments.<\/p>\n The current situation has raised questions about the long-term competitiveness of some Nordic pulp assets, particularly older and smaller production units.<\/p>\n \"If the situation continues, we must prepare for factory closures,\" Viljakainen warned, adding that older and less efficient mills would likely face the greatest pressure if producers are forced to rationalize capacity.<\/p>\n \"It is no secret that this is the case when corporations think about where they can produce pulp most cost-effectively,\" he said.<\/p>\n Several Finnish mills under pressure<\/strong><\/p>\n Finnish pulp mills that have been affected by the difficult market environment, including UPM's Kymi and Kaukas mills, Stora Enso's Kaukop\u00e4\u00e4 operation and Mets\u00e4 Group's Joutseno pulp mill.<\/p>\n Joutseno has already experienced extended production curtailments as profitability deteriorated. According to Mets\u00e4 Group CEO Jussi Vanhanen, the challenge is not related to the technical condition of the facility but rather to the gap between production costs and market prices.<\/p>\n \"The mill itself is in good condition, but at this moment the selling price compared to the cost base does not match, so we have acted in this way,\" Vanhanen said.<\/p>\n However, he emphasized that Mets\u00e4 Group is not currently considering permanent measures at the site.<\/p>\n \"We do not have any plans for permanent measures for now,\" he added.<\/p>","protected":false},"excerpt":{"rendered":" UPM will temporarily halt production at its Kaukas pulp mill in Finland beginning in early August, as Nordic pulp producers continue to grapple with weak European demand and growing competition from expanding Chinese production capacity.<\/p>","protected":false},"author":1,"featured_media":99102,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-99101","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n