Wall Street Analyst Surveys ‘The Street’

Mark Wilde of Deutsche Bank surveyed paper & packaging industry executives, highlights of his findings -

Main message for 2009 - ‘Volumes & Prices Will Be Lower'
For most participants, flat volumes look like the "best case" scenario. Low expectations prevailed across the industry – from timber to paper to packaging. The expectations of lower prices and weaker volumes were most pronounced in market pulp and newsprint. Most observers assumed a bottom somewhere around mid-2009. With economic news continuing to point to a deep slowdown, the case for a mid-year turnaround on most commodities is becoming tougher to envision.

Executives report on big issues in 2009-
1) Slumping demand,
2) Price erosion.
About 80% of respondents pointed to cost pressures as a key issue. A bit further down the “issues list” was the resurgent US Dollar. Several also did raise concerns about the credit worthiness of both customers and suppliers.

Finally, Wilde asked, what is required for turn around for Healthy Industry?”
"A miracle" replied one quick-witted executive. Responses focused on further industry consolidation with accompanying rationalization of marginal capacity. Many respondents argued for a greater focus on financial returns. One European player argued: "Euro needs to weaken against the US Dollar and other major currencies." Many companies tied to lumber and building materials pointed to a rebound in the housing market.