Update on Coated Groundwood

Notes from Deutsche Bank Research Paper
Most producers, both domestic and offshore, have announced coated
paper increases over the past several weeks. In the USA, Verso announced a $50/ton price increases for June 1 on light-weight coated (Publication) and other coated grades. AbitibiBowater and others have also announced hikes. In Japan, Nippon and Oji have both announced $100/ton hikes on export coated publication papers. Of note; US shipments rose an impressive 10.3% so far this year. With rising costs & weak US$, it creates an interesting
dynamic. There is growing evidence that demand is weakening. As we have noted, contacts in the printing distribution community are reporting that high paper prices and a slower economy are triggering reductions in some cataloging budgets. Late last week in announcing
25K of market downtime, NewPage pointed to rising inventories at a number of printers as well as slower demand from advertisers.