Pan Pac pulp mill loses $10 million exports due to high power prices

Sep 02, 2008. /Lesprom.com/. Hawke's Bay pulp maker Pan Pac says it lost between 30 and 40% of pulp production in almost five months as it cut back to avoid high electricity costs. It said that more than $10 million in export sales had been lost as a result of "horrific" spot power prices during the winter electricity shortage, The Dominion Post reported. Pan Pac managing director Doug Ducker said that after spot prices fell last month, the company returned to full production, but in recent days, prices had been erratic, ranging from "almost nothing" to $350 a gigawatt hour because of low South Island lakes. A few years ago, wholesale prices averaged about $50 a gwh. Whirinaki-based Pan Pac is wholly owned by Japanese firm Oji Paper and Pan Pac sells most of its wood pulp to Japan. Pan Pac had bought some power on fixed-price contracts or hedges, so had been able to keep a large part of its production going, but it had not been fully protected.