Xerox recently issued a study for the USA paper market
US Shipments were strong in April and May
-No expectation of traditional seasonal lull in June and July
-Shipments down YTD 2.2%
-Apparent consumption was down 3.3% through May that is better than numbers earlier in the year of 5-6%
Operating rates continue to be strong
-Average 91% through May
-Xerographic market remains tight
Mills continue to announce capacity reduction
-Domtar 125K tons in Maine
More announcements expected
-Dirigo 70K tons Vermont
-Neenah 39K tons Ohio
The RISI index indicates that transactional prices overachieved the expected increase level by 2.5%
-This hasn’t happened in the last 10 years
-RISI index looks 30 days in the rear
These average prices were achieved in June
-The major mills have been successful in eliminating significant discounts to the market to achieve price increases more quickly
RISI is not predicting pricing to decline during the balance of 2007
-10% price increase over the 2006 full year average YTD
-Predicting sustained increases over time
Uncoated free Imports down 5% from March to April
-European market experiencing similar conditions to the US
US swing tons utilized for coated freesheet due to the current dynamics in the coated industry
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