KANSAS CITY (Dow Jones)--Although it has the potential to cause serious harm to the companies, a possible strike by Finland's salaried pulp and paper employees is not expected to hurt production or shipments, said a market analyst Tuesday.
On Monday, the Union of Salaried Employees of Finland issued a 14-day strike notice against companies aligned with the Finnish Forest Industries Federation, according to a press release from the union. It could mean 6,500 salaried, technical and professional employees would begin rolling strike actions against 100 employers on June 16.
The contract expired May 31.
"Nobody there (in Europe) is preparing for it," said Brian McClay, principal at TerraChoice Market Services Inc. There is a chance it could close some pulp facilities, but no one considers it a serious threat.
Pulp producers there already settled with the mill employees, the ones who actually do the hands-on work of running the plants, McClay said. And these employees don't have a history of going out on strike anyway, he said.
It is conceivable that other unions could respect picket lines, McClay said, and if a strike does affect production, the resulting market consequences could escalate quickly because no one is planning for it.
Gary Helik, hedging expert at Tradition Financial Services, agreed, pointing out that futures markets made no adjustments Tuesday to prepare for a strike after the announcement was made Monday.
Helik said a strike could be material if firms have to shut down one or more plants. Several major companies are involved in the contract discussions and would be in line for a strike.
And even if they do go on strike, the question becomes one of deciding if the plant can operate without the salaried employees, Helik said.
Finland's index provider FOEX this week reported its index for European NBSK pulp prices was down $3.51 from a week earlier at $902.32 a metric ton. The index quote is up $31.16 for the year.
FOEX this week also reported its U.S. price index for NBSK pulp at a steady $880.00 a metric ton, unchanged from last week. The index quote is up $15.29 a ton for the year.
Pulpandpaper.net reported NBSK as of June 1 in North America at $860 to $880 a ton, unchanged from a month earlier. In Europe, Pulpandpaper.net's price as of May 1 was $900 to $920 a ton, up $20 to $40 from a month earlier.
-By Lester Aldrich, Dow Jones Newswires; 913-322-5179; lester.aldrich@dowjones.com
(END) Dow Jones Newswires
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