Is taking downtime preferable to cutting prices?

Implications: The importance of the cost of wood cannot be overemphasized.  It's the highest single cost in producing pulp.  How much will the closure of sawmills effect pulp mills' cost structure since they now must go out and harvest trees. Finland, for example, must now pay Russia 15 euros/cubic meter for the logs they import.  These logs represent 50% of Finnish mills' wood supply. When the duty goes up in 2009 to 50 euros will this force some mills/machines to shut down? Will the emphasis on biomass energy (i.e.burning wood) seriously hurt the pulp and paper mills in Europe? 

Analysis: Wood costs are going up in Europe, Russia, Australia and of all places even Brazil.  The cost of wood traded on the open market in Brazil have gone up 300% in 5 years.  European pulp mills now must compete with companies who want to log the forests with the intention of burning chips or pellets to reduce oil imports....these companies receive a subsidy from the EU.  But, pulp and paper companies receive no such subsidy.  This will force these companies to maintain high pulp and paper prices to maintain their profit margins.  But, what will happen if a business slowdown reduces demand?  These mills will have no choice but to take widespread downtime in order to reduce supply.  We believe this will become the norm rather than always cutting prices to try and increase market share by taking business away from the competition.
With transportation costs, energy and labor costs all increasing we see the rise in wood costs causing pulp and paper prices to increase in '09.