End of July, UPM announced plans to permanently end paper production in Kaukas and to shift its coated mechanical paper production in Finland to UPM Rauma mill. The employee consultation processes have now been completed. Paper machine 1 in Kaukas will be permanently closed during Q4. The reduction of personnel is 220. Following the closure, coated mechanical paper production capacity will be reduced by 300.000 tonnes annually. UPM’s pulp, sawn timber and biofuels production and R&D activities at UPM Kaukas integrate will continue as before.

Total European shipments of graphic papers were UP 0.3% vs. August 2016 and are down 0.4% year-to-date. Total European shipments of newsprint were down 1.0% vs. August 2016 and are down 3.1% year-to-date. Total European shipments of sc-magazine were down 0.8% vs. August 2016 and are UP 1.7% year-to-date. Total European shipments of coated mechanical reels were down 0.6% vs. August 2016 and are down 1.0% year-to-date. Total European shipments of uncoated mechanical were UP 2.3% vs. August 2016 and are UP 2.0% year-to-date. Total European shipments of coated woodfree were UP 2.6% vs. August 2016 and are UP 1.6% year-to-date. Total European shipments of uncoated woodfree were UP 0.8% vs. August 2016 and are down 0.3% year-to-date. Click Read More below for additional information.

The company reported operating income of $102 million in the quarter, compared to $406 million in the second quarter of 2021. The $304 million variation reflects lower realized prices and shipments in wood products ($342 million), partly offset by higher realized prices in the pulp and paper segments ($32 million), and higher volume in market pulp ($9 million). The wood products segment generated operating income of $64 million in the quarter, a decrease of $341 million from the previous quarter. With benchmark lumber prices falling from the record highs attained in May, the average transaction price fell to $573 per thousand board feet, a $583 per thousand board feet, or 50%, decrease from the previous quarter. The company generated operating income of $46 million in the market pulp segment, an increase of $16 million from the previous quarter. The average transaction price increased by $39 per metric ton, or 5%, to $826 per metric ton, with gains in all grades. The tissue segment incurred an operating loss of $9 million in the quarter, $2 million wider than the previous quarter. The average transaction price decreased by $60 per short ton, or 3%, due to unfavorable product mix, while delivered costs decreased by $109 per short ton, or 5%, with less downtime than in the previous quarter. The company generated an operating income of $16 million in the paper segment in the quarter, an increase of $23 million from the previous quarter. The average transaction price rose by $54 per metric ton, or 9%, with price recovery reflecting tightening global markets.