Tuesday, April 18, 2006

Smart still operating as Chapter 11

Smart Paper continues to operate under the protection of chapter 11. The company closed the Wisconsin plant but continues to make paper in Hamilton, Ohio. Wachovia Capital Finance and CIT are assisting with the financing. Paper.com has all of Smart's paper products including cast coat / Kromekote, matte coated, and uncoated text and cover - in stock and ready for immediate delivery.

Pulp Prices contiue to Increase

The pulp producers have once again announced a price increase for market pulp. The recent announcement of $30/ton will advance the list price of NBSK to $690/ton. The markets are expected to stay tight with the announced closure of the pulp mills at Bowater and Weyerhaeuser and also the recent closure at Georgia Pacific and Fraser.

Internationa Paper shutters another machine

International Paper announced it will shut down a coated paper mill in Courtland, AL. The facility produced 922,000 tons per year of coated free sheet.

Monday, April 17, 2006

Paper Industry Experts Forecast US Paper Capacity Decline

Although many sectors within the paper industry appear to be doing very well in today’s climate, must agree that long-term trends will continue a downward capacity.
-Downward capacity trend begin in 2001 with many mills announcing manufacturing equipment curtailments
-2005 overall capacity reductions estimated at a negative 760,000tons - representing 45 machines permanently removed.
note, almost 7million tons was taken out of production at some point during year.
-2005 capacity 99.5million tons
-2005 US Newsprint (used in newspapers) declined by 865,000 tons - 13% - total of 5.76million tons
-2005 US printing and writing gained 0.7% to nearly 26million tons
-Capacity forecast to decline nearly 600,000tons over next 2 years
-2005 mechanical (groundwood) capacity grew 8% to 2.25million tons - most of increase came from conversion from newsprint machines
-2005 Coated Mechanical (magazine paper) capacity rose to over 5million tons or 2.3% increase.
Capacity will decline with the recent announcement of 2 machines shutting own.
-2005 uncoated free sheet declined to 13.5million tons. This sector is predicted to continue declining capacity.
-Tissue paper and Kraft paper continue to witness declining capacity

Annual Paper Meeting Held in New York City

The American Forest and paper Association (AF&PA) held their annual meeting April 9-13; following observations-
-First time in since 1995 that total paper and pulp production has dipped below 100million tons of capacity.
Basic concerns of industry continue to be
-Global competition; limited capacity spending on equipment (aging technology); high energy and labor (benefit) costs; capacity rationalization; and demands for short-term results for shareholders.
-Coated and uncoated free sheet markets continue to be strong ..... for now.
-Many older mills have 'shut down' equipment and thus capacity has been reduced
-Many of the off shore producers have curtailed shipments to USA
-Demand appears good - although the long-term trend is declining 2% per year.
-The Premium Text and Cover markets continue to suffer
-Market demand has continued to decline 10% per year
-No forecast for demand to shift to neutral nor increase
-High manufacturing costs continue to plague this sector
-Newsprint suppliers are doing well
-Demand has NOT increased, however, large trend to converting equipment over to high bright or coated; accordingly,
Newsprint capacity is decreased
-Board capacity continues to decline
-Linerboard will continue to decline, as well as recycled linerboard with several closures
-Containerboard capacity is stable due to capacity outages AND efficiencies on operating machines
-Corrugating Medium capacity will continue decline (forecast is down 2% 2006)