International Paper Reports 2Q downtime

International Paper announced it took 275,000 tons of down time in the second quarter. This was a result of
poor market demand. Of the 275,000 tons - 135,000 was uncoated printing and writing capacity. Meanwhile,
MeadWestvaco started up the Brainerd paper facility.

Paper.com has more Masterpiece Studio items

Paper.com has recently added numerous items to complete the Masterpiece Studio offerings. This line competes very economically with Geographics and Sonburn for designer stationery. Visit Paper.com for all your designer stationery and paper demands.

Lincoln Paper to Expand

Lincoln Paper and Tissue is considering a $37million plan to double its Maine paper capacity. If the project is approved, the mill will shift focus from production of fine paper to tissue. Mill currently produces 200 tons per day.

Mohawk Launches New Digital Grade

Mohawk Paper Mills introduced Superfine i-tone, a new uncoated paper designed for HP Indigo Printers. This is a very clean, dust free sheet suitable for both dry toner and ElectroInk.

Pulp Market Fears new Capacity

Aracruz Cellulose is beginning to ramp up its newest facility in Veracel, Brazil. They will be the world's largest hardwood kraft pulp producer for market sales with an annual capacity of 2.6million tons. Aracruz recent expansions have doubled the firms production levels. Recent projects include 900,000mt/Veracel,Brazil; 250,000mt/Barro do Riacho, Brazil; 856,000mt/Itata, Chile. All of these plants produce high quality eucalyptus fiber.

Uncoated Offset Prices

Recent July 2005 reports outline demand for Uncoated Free Sheet paper 50 lbs (25x38/500) offset rolls has declined. This is typical over the summer months. Furthermore, the price for this grade has declined from an average transaction of $730/ton in April to a current (7/05) price of $700/ton ($35/cwt).

Market Pulp Pricing Depressed

Industry experts believe pulp prices are 20% too high. North America demand has decreased and suppliers continue to produce pulp; creating inventory. The benchmark grade NBSK (Northern Bleached Softwood Kraft) list price has declined from high of $680/MT (4/05) to $650 (5/05) to $630/mt today (7/05). Current spot Market pulp pricing ranges from average of $570/mt. to a low of $500/mt.

Valentine Paper Files Chapter 11

Valentine Paper Company in Lockport, LA filed for Chapter 11 bankruptcy protection. This is a nonintegrated (does not produce pulp on site) fine paper producer. The primary grade manufactured was uncoated white freesheet.

International Paper Concludes sale of Division

International Paper concluded the sale of its industrial papers division to Kohlberg & Co. for $180million. The name of the new company will be called Thilmany LLC. The sale included packaging grades and pressure sensitive papers produced at 3 Wisconsin mills. Total production is 300,000 tons per year.

Publication Papers Might be Tight in Supply

North American buyers of coated and uncoated printing mechanical paper grades (Magazine and Catalogue) were delighted to learn that paper production restarted in Finland, but both buyers and sellers continue to evaluate the results from the country's 56 days of downtime. The summer months usually generate greatest demand for catalogue paper in preparation for Fall mailings.

Pulp Pricing

Domestic prices appear largely stable in July. Prices continue to
edge lower in Asia, the world's leading spot market. However, after
months of erosion, we wonder whether we are close to the bottom.
Anemic demand is being partially offset by supply coming out of the
system. Arauco's big new Valdivia mill is out indefinitely, and
Domtar has shuttered its Quebec mill.

Kraft Paper still trying for Price Increase

North American kraft paper producers still are trying to implement a $50/ton price increase first proposed in April but delayed by weak springtime market conditions.

Pulp Mill Closes due to Cost Pressures

Wausau Paper in Brokaw, Wisconsin recently announced it will no longer manufacture pulp for internal consumption. Management sited raising costs AND introduction of additional low cost fiber producers in areas such as Latin American. FYI. Wausau Paper is already one on the largest single company purchasers of market pulp.
My prediction is this is the first of many announcements and that many smaller intergraded mills will be shuttering equipment and purchasing fiber on the open market.