Weyerhaeuser Cuts Wood Pulp Prices 17% as Demand Suffers

Weyerhaeuser Co., the largest supplier of wood pulp in the world, said Monday that it cut pulp prices 17% this month, another sign that slumping forest-product prices have yet to hit bottom.

Weyerhaeuser said it lowered its reference price for northern bleached softwood kraft pulp--an industry benchmark--to $600 a metric ton from $725 a ton, effective March 1.

Northern softwood pulp hit an all-time high of about $1,000 a metric ton in the third quarter of last year when pulp and paper prices were soaring along with the U.S. economy.

“We’re responding to a weaker market, not leading the price change,” said Michael Bickford, director of communications for Weyerhaeuser’s pulp, paper and packaging division.

Meanwhile, newsprint producer Fletcher Challenge Canada Ltd. has told publishers it won’t implement a planned 7% price increase for newsprint in April. The decision, confirmed Monday, could make the Vancouver, Canada-based company the first major newsprint maker to drop the planned increase. Fletcher told customers of its plans last week.

Another big newsprint maker, Abitibi-Price Inc. of Toronto, still intends to raise the price of newsprint, spokesman Bob Tait said.

Federal Way, Wash.-based Weyerhaeuser is the world’s largest supplier of “market pulp,” or pulp sold to companies that make paper. Weyerhaeuser makes about 2 million metric tons of pulp a year at eight plants in the United States and Canada.

Weyerhaeuser’s shares, which rose $2 on Monday to close at $44 on the New York Stock Exchange, have fallen 7% in the last six months.

The decline in pulp prices is bad news for Weyerhaeuser and other forest-product companies that sell pulp for paper production.