In 2004, the international pulp markets and the related equipment market showed satisfactory development.  Major project activity developed favorably throughout the reporting period, with investments and greenfield projects mainly concentrated in the southern hemisphere.  In Europe and North America, investments focused more on modernizations and capacity expansions of existing pulp mills.

The capacity levels of market pulp producers increased modestly for mechanical pulp producers and more substantially for chemical pulp producers.  Underlying demand for pulp remained strong during 2004.  Pulp prices are denoted in US dollars, whose value decreased significantly against the Euro and other major currencies during 2004.  This forced Canadian and Euroland producers to raise the minimum price level for market pulp, leading to increasing pulp prices.

Capacity utilization of international pulp producers was relatively stable and at a very high level.  In the First Half of 2004, the price for Northern Bleached Softwood Kraft (NBSK) pulp increased significantly. Due to strong demand and unchanged supply, the price went from approximately 560 US dollars per ton in January 2004 to approximately 650 US dollars per ton at the end of June 2004.  However, due to slight oversupply and seasonal temporary shutdowns of several paper manufacturers, the pulp market weakened during the Second Half of 2004, especially during the Third Quarter.  Towards the end of the year, the price started to increase again as a consequence of increased demand.

The market for short fiber pulp (birch and eucalyptus) developed in step with the price development of NBSK.