Forecasts indicate continued increase in cost for raw components such as fiber, energy, freight, and chemicals. Accordingly, purchasers are budgeting for increased paper prices.
Mill management forecast operating rates to sustain at 92% (roughly, the same as 2004).
Additional consolidation, mergers, and equipment curtailment will be the norm.
Highlights include-
-Operating rate best in 10 years because of hundreds of machine shut downs.
-USA exports should improve with strong dollar
-Pulp prices will continue to increase
-Uncoated Freesheet (offset, copier paper) will grow at a decreasing rate
-More electronic communication
-Negative customer reaction to increased paper prices – substitute sub straights will be used
-Most mill capital expenses will be allocated to projects for environmental and energy efficiencies.
-Mill capital budgets at historical low
-Little money spent on capacity nor process improvement
-Purchasing paper online will increase
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