Canfor Pulp Products Inc. (“CPPI”) has unveiled its financial outcomes for the second quarter of 2025, reporting a significant operating loss of $5 million and a net loss of $7 million, equating to $0.10 per share. These figures underscore a challenging period for the company amidst a volatile global economic landscape.
Throughout the second quarter, global pulp market fundamentals experienced a pronounced weakening, primarily influenced by persistent trade uncertainties, particularly those stemming from China. This widespread market downturn led to a substantial accumulation of global pulp producer inventories, pushing them well above their typically balanced range and signaling an oversupply.
Compounding these market pressures, the Canadian dollar demonstrated a strengthening trend, appreciating by 3 cents, or 4%, against the US dollar quarter-over-quarter. This currency fluctuation had a tangible negative impact on Canfor Pulp’s unit sales realizations for both pulp and paper products, directly affecting revenue streams.
The reported operating loss for Q2 2025 marks a notable shift from the operating income recorded in the first quarter of the same year. This decline was largely attributable to a dual challenge: a decrease in the company’s average Northern Bleached Softwood Kraft (“NBSK”) pulp and paper unit sales realizations, coupled with an uptick in pulp unit manufacturing costs during the period.
Commenting on the company’s performance, CPPI’s President and CEO highlighted the strong influence of ongoing global economic uncertainty on both pulp and paper market fundamentals. He noted that these prevailing market pressures are anticipated to extend into the third quarter, emphasizing the company’s proactive stance in optimizing internal operations, including safety, reliability, productivity, and cost structure.
The softwood pulp markets faced considerable downward pressure across Q2 2025, driven by subdued demand from China, partly linked to evolving trade policies between major global players, alongside broader economic instability. Consequently, US-dollar NBSK list prices to China, the world’s largest pulp consumer, saw a steady decline, impacting overall market valuations.
As a direct result of the weakened demand, global softwood pulp producer inventories surged significantly, ending May at 46 days of supply—a considerable increase from previous periods and well beyond the balanced market range of 32-43 days. This inventory overhang is expected to continue impacting sales realizations into the subsequent quarter.
Looking ahead, the global softwood kraft pulp market is projected to remain subdued throughout the third quarter of 2025, with purchasing activity, particularly from China, forecast to be soft during the traditionally slower summer period. Despite some Nordic producers announcing market curtailments, inventory levels are expected to stay elevated.
Canfor Pulp continues to diligently monitor external economic factors and geopolitical developments that could influence trade relations. The company maintains a strategic focus on internal controls and operational efficiencies to mitigate potential impacts and navigate the persistent market challenges, ensuring long-term sustainability and performance optimization.
