Mar 17, 2005. /Lesprom Network/. Prices of hardwood and softwood pulp will likely increase because of a shutdown of pulp factories and a storm in Sweden that has reduced pulp supply in the market, an industry association said. Supply of hardwood pulp in the market is tight at the moment because of a recent storm in Sweden, one of the largest pulp producers in the world. The storm damaged birch trees, used to produce hardwood pulp, said Muhammad Mansur, chairman of Indonesian Pulp and Paper Association, or APKI. Aside from the storm, a 1.2 million tons hardwood pulp factory in China's Hainan province isn't fully operational, adding to the tightness in supply, said Mansur. "At this moment, the supply of hardwood is rather tight, but we think it is still adequate," he said. Tight supply has supported prices of hardwood pulp. In Asia, prices of hardwood pulp rose to $550 a ton in March, from $510/ton in February. While in Europe, prices of hardwood pulp rose to $615/ton for March, from $585/ton in February. A new 550,000 tons softwood pulp factory in Chile, which was temporarily shut down by the government because of environmental problems, also reduced supply of softwood pulp, Mansur said. "But (softwood pulp supply) isn't as tight as hardwood pulp supply. So the price increase for softwood isn't as high as (for) hardwood pulp," he said. Prices of softwood pulp in Asia rose to $580/ton for March, from $550/ton in February. In Europe, the price of softwood pulp went up to $650/ton for March, from $620/ton in February. Hardwood and softwood pulp and waste paper are the main ingredients to produce a range of products from writing paper to cement sacks. The shutdown of a number of pulp factories in the U.S. and Canada has also reduced supply of pulp in the market. "These factories were shutdown as they were deemed unprofitable," Mansur said, without elaborating. North America and Scandinavian countries account for 80% of global pulp and paper supply which is currently around 330 million metric tons a year. Mansur said tight supply is likely to continue until middle of this year. "We project prices will ease by the middle of this year as factories in Hainan (China) and Chile are expected to start operations (by then)," Mansur said.