In 2005, project activity for pulp mill equipment was at a satisfactory level for both greenfield mills and modernization/refurbishments of existing mills.  Investments in new pulp mills were again focused on the southern hemisphere (Latin America and Asia), where some new projects were awarded and planning for several others was begun.  In Europe and North America, project activity focused on selective modernizations and capacity expansions.

Pulp prices developed relatively stable during 2005.  The average price for Northern Bleached Softwood Kraft (NBSK), at approximately 610 US dollars per ton, remained about the same as in 2004.  Solid price increases in the First Quarter were offset by weaker demand, especially from European and Chinese paper mills, during the Second Quarter.  

The shutdown of some Finnish pulp mills during May and June 2005 – caused by the dispute between the Finnish Forest Industries Federation and the Finnish Paper Workers’ Union about the new collective labor agreement – led to a slight support of NBSK prices.  

The prices for short-fiber pulp (birch and eucalyptus) increased from 520 to 600 US dollars per ton during the First Half and remained in a range between 580 and 600 US dollars per ton during the Second Half of 2005.