Closures, cut backs, job losses, and trying to reduce capacity to meet demand have hurt the Pulp and Paper industry. North American has cut 4millionTPA of capacity and Europe 5millionTPA.
Printing and writing paper shipments for January showed sharp declines: Uncoated white paper shipments are down -20%, coated papers are off 26.5- 31%. Of interest are uncoated white papers only witnessed price erosion of $5-10/ton in January (December decline was $5-15/ton). Coated publication grades fell$15-35/ton in January (certainly better than December price reductions of $50-70/ton) and freesheet coated prices fell $20-60/ton in January. Look for further pressure on pricing and demand throughout first half of 2009 and beyond.
Market Pulp did not fair any better, list pricing in January for NBSK declined $30 to $675/ton - a reduction of @$210 from high in August 2008. Hardwood pulp fell $30/ton, BEK now at $615/ton.
Note, actual transaction prices decreased to approximately $400s for NBSK - well below the cash cost to produce fiber!
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