China paper mill closures to over 4 million tonnes

China's central government has targeted over 4 million tonnes/yr of non-wood pulp and paper mill capacity for closure this year, eclipsing its earlier target of just 530,000/tonnes/yr. China set a new target of 4.32 million tonnes/yr that's to be closed by the fourth quarter, according to its Ministry of Industry and Information Technology.

This latest round of capacity closures, nearly eight times bigger than the total originally slated for 2010, is expected to target straw pulp, "low grade" printing and writing papers, and containerboard, among other grades. Government-mandated closures in China have happened periodically since 2006, after China passed its eleventh five-year plan for the adjustment and revitalization for the pulp and paper industry.

But industry participants were little aware it until mid-2007 as the country geared up for the 2008 Olympics Games in Beijing and closures began happening at a rapid pace. The Chinese government, which has shuttered hundreds of non-wood pulp and paper mills as part of an effort to reduce pollution and modernize the industry, closed an estimated 6.5 million tonnes/yr of total capacity from 2006-2009 including from a second wave that occurred last year. If China reaches its 4.32 million tonne target this year, that would bring the total estimated closures to 10.82 million tonnes/yr of capacity.

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