the costs of domestic pulp that are relevant to the competition between domestic and foreign pulp mills in supplying converting mills should include lapping or drying costs. Paper mills using pulp produced by integrated pulp plants would, however, find it advantageous to use imported pulp or pulp from outside domestic sources only if they could obtain it at prices comparable with their own costs of producing pulp in slush form. Relative costs of production in different regions and of different kinds of wood pulp. There are wide differences in the costs of producing the same kinds of wood pulp in the different regions of the United States and in the costs of producing different kinds of wood pulp in the same region. The costs of production of sulphite pulp in the mills of the Northeastern and Lake and Central regions from which costs were obtained averaged about the same. The higher costs of wood in the former region were slightly more than offset by lower conversion costs. On the Pacific coast the cost of producing sulphite pulp, excluding interest on investment in the pulp mills, was about 30 percent lower than in either of the other large sulphite-producing regions. This difference was principally due to lower wood costs on the Pacific coast than in the other two regions, but to a less extent also to lower labor and power costs there. Interest on investment averaged about the same per ton of sulphite pulp for the mills from which cost data were obtained in all regions. The relatively small differences in some of the elements of conversion cost between the Northeastern and Lake and Central regions may in large part be attributable to the differing average efficiency of the mills from which cost data were obtained. With respect to ground wood, the average costs in Northeastern mills at which costs were analyzed were not much different from those of mills on the Pacific coast, the considerably higher wood cost in the former region being offset by lower conversion costs. Ground-wood costs in mills in the Lake and Central region were about 15 percent higher than those of mills in the other two regions. The higher average cost of ground wood in the Lake and Central than in the Northeastern region was attributable to the much higher conversion costs; wood costs were somewhat lower in the Lake and Central than in the Northeastern region. As compared with Pacific coast mills, both the wood costs and the conversion costs, especially the former, of Lake and Central mills averaged considerably higher. In part the different conversion costs shown for ground-wood production in the different regions may result from the varying efficiency of the mills from which cost information was obtained and from the varying qualities of the mechanical pulp produced by them. Smaller quantities of ground wood were produced, on the average, by the individual mills from which costs were obtained in the Lake and Central and Pacific coast regions than by those in the Northeastern region. In the Lake and Central region, moreover, several of the mills from which cost data were secured produced relatively small quantities of ground wood for the production of special papers made in their integrated paper plants, while in the Northeastern region the ground-wood mills investigated generally produced mechanical pulp in fairly large quantities for use in the production of newsprint and other similar papers made in large quantities. As regards sulphate pulp, the Southern region, by far the largest producing region, showed lower costs than the Pacific coast region. The Lake and Central region showed much higher average costs than either of the other two. Wood costs in the South were considerably lower than on the Pacific coast and conversion costs were also slightly lower. The costs of wood per ton of sulphate pulp in the Lake and Central region were more than double the corresponding cost in the Southern region. It is possible that the lower costs of producing sulphate pulp shown for the South are partly attributable to the character of the pulp chiefly produced there. The kraft pulp produced in the South is principally used in the production of heavier wrapping papers and kraft board, while a larger part of the sulphate pulp produced in the Lake and Central and Pacific coast regions is used for the production of lighter paper and specialties. If a larger proportion of the sulphate pulp made in the South were for conversion into the lighter weight papers, it is possible that the representative costs per ton would be higher than those shown in table 35. In the Lake and Central and Pacific coast regions, in which cost-ofproduction data were obtained with respect to sulphite, sulphate, and ground wood, the costs per ton were somewhat higher for sulphite than for sulphate and considerably higher than for ground wood. In each case, however, the wood costs for sulphite pulp were considerably more than for sulphate, while the conversion costs were somewhat lower. The still lower costs of ground wood are mainly attributable to the fact that much less wood is consumed in producing a ton of mechanical than of chemical pulp. The foregoing comparison of costs of production of pulp in the different regions does not take account of the varying costs of transportation on the pulp or paper output of the mills to their markets. This feature of costs of United States mills producing pulp for shipment to separate converters is covered in later sections of the report. In those sections. also will be found information regarding the costs of bleaching, lapping, and drying pulp, and more detailed information regarding the various elements of the cost of production of the different types of pulp in slush form. PULP PRICES Since most domestic pulp mills are operated mainly to supply pulp to paper or board plants under the same ownership or control, and usually integrated with the pulp mills, the prices of paper and board are more directly related to the receipts of all domestic pulp-producing concerns combined than are the prices of pulp. Pulp prices, however, are of interest to integrated pulp-paper manufacturing concerns as well as to concerns producing pulp principally for sale. Many integrated mills sell minor portions of their production in the form of pulp; moreover, some integrated mills produce papers that compete with the products of other mills that buy their supplies of pulp; in addition, the shifting of paper mills from the production of some products to others, and the substitution of some kinds of paper for others by users, result in important interrelations between the prices of different kinds of paper and between paper prices and pulp prices. The prices of wood pulp fell sharply after 1929. In 1931 and 1932 the continuing decline in pulp prices was probably in part influenced by the depreciation of the currencies of the principal European pulp exporting countries. In 1933 and 1934, when the value of the dollar in terms of the currencies of these countries was falling, the prices of pulp in United States markets recovered substantially. In the early part of 1935 pulp prices fell sharply again and remained fairly stable throughout the latter part of the year and into the early part of 1936. Toward the middle of 1936 the demand for wood pulp of all kinds strengthened and prices began to rise. This rise has continued almost steadily and at an accelerating rate up to the present time, the middle of 1937. The prices at which pulps have been sold and contracted for future delivery in the past few months have been generally higher than predepression levels. However, some pulp, particularly that imported from Europe, has been delivered at prices fixed in contracts concluded much earlier. Thus there are wide discrepancies between the prices at which pulp of any given kind has recently been delivered. Further information regarding the prices of particular kinds of pulp and regarding the relations between prices of pulp from different sources is given in later sections of the report dealing separately with the trade in sulphite, sulphate, and mechanical pulp. INTERNATIONAL TRADE IN WOOD PULP TRADE OF IMPORTANT IMPORTING AND EXPORTING COUNTRIES The quantity of wood pulp of all kinds entering international trade in 1936 was about 6,300,000 short tons. The corresponding tonnage in 1935 was 5,800,000; in 1933, 5,200,000; and in 1929, 4,900,000.20 Nearly 80 percent of the total tonnage of wood pulp moving between countries consists of chemical pulp. Exports and imports of different kinds of chemical pulp are not reported separately in the trade statistics of several countries important as exporters or importers of wood pulp. From partial data, however, it is evident that much the greater part of the chemical wood pulp which moves in international trade is sulphite, most of the remainder being sulphate. A substantial number of countries are importers of wood pulp in quantities of some significance, but 10 countries, namely, the United States, Great Britain, France, Italy, Japan, Germany, Spain, Belgium, the Netherlands, and Brazil, took over 95 percent of the total volume moving in international trade in recent years. The United States alone took more than one-third and Great Britain about 30 percent of the total imports of wood pulp by all countries. Three of the ten countries named, Germany, Japan, and the United States, also produce wood pulp in substantial quantities; Germany is in fact on a net export basis, considering all kinds of wood pulp together. Five countries supply the bulk of the wood pulp entering international trade. These countries are, in the order of their importance as exporters in 1936, Sweden, Finland, Canada, Norway, and Germany. Sweden alone has supplied from about 33 to 40 percent of the total in recent years. Finland has contributed from 15 to 24 percent, and Canada and Norway since 1931 have each supplied from 10 to 15 percent. Canada was more important as an exporter in the predepression period, in 1929 supplying about 17 percent of the world total. Canada's loss of position as regards exports of wood pulp has been offset by increased exports of newsprint paper. Germany has exported from about 4 to 7 percent of the total tonnage of wood 20 World Wood Pulp Statistics, 1926-36, United States Pulp Producers Association. pulp moving between countries. In addition to the five countries named, Austria, the United States, Czechoslovakia, Estonia, and a few other countries produce some wood pulp for export markets. A summary of the international trade in wood pulp, by principal importing and exporting countries, is given in table 36. TABLE 36.-Wood pulp: International trade, 1929 and 1933 to 1936 Country Countries on an import basis: Im- Ex- Im- Ex- Im- Ex- Im- Ex- Im- Exports ports ports ports ports ports ports ports ports ports United States. 942 1, 933 Italy. Source: World Wood Pulp Statistics, 1926-36, United States Pulp Producers Association. The figures covering international trade in wood pulp as shown in table 36 are taken originally from the official export and import data of the various countries indicated except in a few instances where the figures for 1936 were estimated from partial information or from composite data of other countries, official information not yet being available for that year. No attempt has been made to equalize total imports and total exports for any year because it was believed more. desirable to use the official figures as reported by the countries named. Discrepancies can be accounted for by a normal year-end lag and possible errors in the classification of pulp as shipped or as received. As pointed out previously, international trade in wood pulp is closely related to international trade in paper. All the countries important as exporters of wood pulp are also important as exporters of paper. The relation between the trade in the two commodities is indicated by the experience of Canada. From 1915 to 1925, a considerably larger percentage of the wood pulp produced by Canada was exported in the form of pulp than at present. In the meantime the Canadian production and exportation of paper, particularly news print, has been expanded. In the description of the pulp industries of particular countries hereinafter, some attention is given to the relations between the trade of the various countries in pulp and in paper. Description and purposes. EUROPEAN PULP CARTELS 21 The European pulp cartels are voluntary organizations of business concerns manufacturing the same kind of pulp. Individual member concerns maintain their independence except with respect to the matters covered in the cartel agreements. The industries of the several countries embraced in international cartels have national organizations, and these organizations, rather than the individual pulp-producing concerns, are parties to the international cartel agreements. Pulp cartels, like those whose interests lie in other products, are publicly sanctioned in the several European countries. The international cartels, as such, do not interfere with the domestic markets of the several producing countries, the home markets being reserved to the industries of each country. The fields of interest of the international cartels are the export markets for the several kinds of pulp. The pulp producers of the United States and Canada do not participate in these international cartels, which are entirely European in membership. Cartel membership. The international sulphite-pulp cartel, known as the S. P. S., or Sulphite Pulp Suppliers, was organized in 1930 and maintains its headquarters in Stockholm. This cartel embraces producers of sulphite pulp of paper grades in Norway, Finland, Sweden, Germany, Czechoslovakia, Austria, and Lithuania. Its interests do not extend to that part of the sulphite industry producing and selling the dissolving sulphite pulps used in the production of rayon, plastics, and allied products. A few important producers of sulphite pulp in some of the countries named have not become members of their national organizations, and their export business does not come under the formal control of the international cartel, although informal understandings with such nonmembers are said to be in effect. The international mechanical-pulp cartel, known as the M. P. S. or Mechanical Pulp Suppliers, was organized in April 1935, and consists of producers of ground wood in Finland, Norway, and Sweden. It has no members outside these three countries and, as in the case of the sulphite cartel, there are a few establishments even in the three countries which have not become members of their national organization. Also, as in the case of the sulphite cartel, informal understandings are said to be in effect with nonmember producers. There are a number of integrated pulp and paper mills in the countries referred to above, which produce both sulphite and mechanical pulp, and which consume their entire pulp production. Since these mills play no part in the international market for wood pulp, they are not affiliated with the pulp cartels. The international rayon-pulp cartel, known as the R. P. S. or Rayon Pulp Suppliers, embraces concerns producing dissolving 21 Detailed information regarding the European pulp cartels is not published. Most of the information on which the following statement is based was obtained through the cooperation of the U. S. Government representatives in the several European countries. |