Top Paper Producers

Pulp and Paper International just reported on the top producers for 2008. The list illustrates some changes in that several mills merged or shuttered equipment. International Paper remains at #1, but two Chinese names entered the list, Shandong Chenming and Nine Dragons. Also companies such as Koch (GP), Kruger, White Birch, Asia Pulp and Paper, and APRIL did not make this list. Check Coy Paper's web site on Industry Resources Tab for more details.
Top Producing Areas tons per year (% world)
North America – 70,020,000tons paper (35%) / 13,921,000 mkt pulp (37.4%)
Europe – 70,480,000tons paper (35.4%) / 8,679,000 mkt pulp (23.3%)
Asia – 48,175tons paper (24.2%) / 1,884,000 mkt pulp (5.1%)

Top 10 Producers /2008 sales for paper and pulp
International Paper $24,782,000
Procter and Gamble $13,898,000
Stora Enso $13,450,000
Svenska Cellulosa (SCA) $13,427,000
UPM $13,043,000
Oji $11,084,100
Smurfit $10.335,500
Kimberly-Clark $9,992,000
Nippon $9,983,400
Mondi $9,284,300

Top 5 Tonnage producers (000's)
International Paper 17,128 tons
Stora Enso 11,746
UPM 10,641
AbitibiBowater 7,589,000
Oji 7,381

RISI Casts Shadow on Future of Paper Demands

John Maine of RISI advised that the decrease in shipments of 15 million tons of fine paper between 2007 and 2009 may never return because of all the major changes in electronic substitution and imports to North America and Western Europe. Worldwide there was a 3% drop in 2008 and 11% decline in 2009. A mild recovery is expected over the next year, but not to pre 2007 levels. Coy Paper news releases continue to report on China and India demand maintaining a growth of 3-4% with 4 million tons of new capacity coming on-line in China, mostly coated freesheet.

AbitibiBowater to Sell Texas Paper Mill

AbitibiBowater is reviewing the possible sale of its Lufkin, TX mill to CIT for $20.5 million. The plant has been closed since Dec. 2007 and consists of 895.5 acres of land, suitable for industrial development. The sale would save AbitibiBowater $3 million a year and would protect them from any environmental liability, which would be assumed by CIT.

Update on Uncoated Woodfree Papers

Although the majors (incl Domtar, IP, Glatfelter, GP and Boise ) all announced a $40/ton price increase for uncoated freesheet grades (all except business papers) the reality is the price is just being implemented. A quick check of the market, 50-lb offset roll prices range from $805-835/ton and cutsize grades range from $1010-1060/ton.
The market is in an interesting position, pulp prices are up, demand is OK at best, inventories are low (due to curtailments), BUT, Portical has a monster of a paper machine with tons to sell. See more on the Coy Paper site under the tab for Industry Resources and news.

Coated Market Trying to Improve Price

Several of the the major producers of publication grades, NewPage, Myllykoski and Verso Paper, are working hard with end users to increase the price of their products by reducing discounts. However, Coated Groundwood list prices in September remained flat at $770/ton. Buyers continue to report overall demand remains weak and producers continue to take downtime.

A recent survey of manufacturers of coated Groundwood publication papers revealed shipments were down 8% for 315,000 tons (vs. 2008) for the month of August. Meanwhile, the producers of Coated Freesheet reported shipments were 300,000 tons or down 17% (vs. 2008) during August.

Containerboard Shipments take Slight Drop

The Containerboard producers saw a slight decline in September and prices also fell by $10-20/ton. This is consistent with declines in recent months. We have reported on box shipments falling most of the year; August shipments continued the decline with 9.5% decrease from 2008 (Nearly 10%YTD so far 2009).
Spot prices on 42-lb unbleached kraftliner for Midwestern converters is in $450-470/ton range, and Northeast as well as West Coat is in the $420-440/ton range.
Some buyers report the small recycled mills as low as mid-$300/ton levels.

Paper Market Recap for August Shipments

Deutsche Bank just reported August and year to date paper shipments for printing & writing papers from North American producers.:
Uncoated Free Sheet, -10.8%YTD / -14.1%(August),
Light Weight Coated groundwood publication -8.2%YTD / -28.0% (August)
Coated Free Sheet -14.4%YTD / 25.1%(August)

Another Uncoated Paper Machine Announced for China

Hamadan Baiyun Paper announced they will build a 280,000 TPA uncoated printing/writing Paper machine in China, slated to start up in March 2011. They also plan a new 100,000 TPA pulp line. This mill has current production of 7 small with uncoated machines that produce capacity of 100,000 TPA and a 37,000TPA pulp line.

Pulp Inventory Down, Shipments Up

The pulp market enjoyed shipments of 3.6Million tons for August, which is a 13% gain (vs. August 2008). Inventory levels at the producing pulp mills were down to 27 days supply, versus 41 days in August of 2008. Of particular note was Chinese shipments increased 23% from July to 830,000 tons – up 132% from 2008!

More on the Antidumping Charges for Coated Paper

The USA producers of coated paper, NewPage, Appleton, and SAPPI, continued to charge China and Indonesia on specific printing and writing coated papers. Recall we reported on similar charges against these countries in 2007 and the International Trade Commission ruled against the charges.

Cascades Acquires two More Recycling Plants

Cascades announced the purchase of Sonoco Recycling and Yorkshire Paper Corp. Both of these companies provide on-site collection for retailers recyclable materials such as corrugated containers, paper and plastics. Yorkshire collects nearly 24,000 tons from retailers in New York and New England and Sononco collects 190,000 tons across Canada.
Cascades now has 19 recovery facilities supplying the company with half of the 2.2Million tons Cascades processes in their paper making process.

USA Containerboard Shipments Down

Production for the USA containerbroad producers fell nearly 10% in August (vs. August of 2008) and July shipments appeared flat (vs July 2008). The AF&PA reported containerbroad production this year is down over 12% (vs 2008 YTD). Components of this market were also down - Linerbaord down 12% and Medium fell 13% (vs 2008 YTD).

Will Imports Harm USA Paper Producers

As of today, I know of no USA producers in discussions for building a new uncoated paper machine and increasing capacity. Meanwhile, Portucel is ramping up production in Portugal and eyeing the North American market. Also, South America is introducing new capacity and surely the USA will be in their marketing plans. Unless demand in North America increases, this new supply could yield a sloppy uncoated freesheet market for years to come.

Coupons Making a Comeback ?

Paper ‘cents off’ coupons have been around for 100 years, and although redemption peaked in 1992 at 7.9Billion coupons, by 2006 through 2008 the redemption fell to 2.6Billion a year. However, with the current recession, marketers believe coupons are growing again. Initial reports indicate redemption is up 10% during the fourth quarter of 2008 and they increased nearly 25% so far in 2009. In the past, newspapers served as the primary source for coupons, now websites such as coupons.com offer printable versions and several sites allow the end user to customize exactly which stores or items to alert end users as to what is on sale. The next frontier is thought to be mobile coupons, forwarded to the smart phone. The New York Times reported the bulk of coupons are still clipped from weekend newspapers and digital coupons accounted for less than half of one percent. Let’s hope the newspapers can hold on to this... declining coupons from newspapers means decreased newsprint consumption and one more reason for the end user to not buy a newspaper!

No Challenges to Recent Pulp Prices

Snap Report from Paper Association -
Pulp price increases announced throughout the world, effective with October shipments: Arauco of Chile to increase prices in China on 3 grades of pulp, Donghae Pulp of S. Korea to raise BHK in China, Canfor Pulp to raise NBSK in NA and Asia, Domtar to raise NBSK in NA, Sodra and Fibria to raise NBSK in Europe

China Boosts Paper Production

Chinese paper production was over 50 million tons (up 6.2%) for the first half of 2009. Several closed mills re-opened with a reviving economy yielding increased demand, and low cost raw materials. Note, China imports approximately 60% of their pulp (8.25 million tons) up 40% vs. last year.

Coy Paper and Vallely Blog on Twitter

All the news releases P. Scott Vallely reports on in the Current News on the Pulp and Paper Industry can be found with daily updates on Twitter. Click onto https://twitter.com/CoyPaper. Many of the releases are documented before they become public information. The twitter updates are convenience 140 character summers of each release and come right to your computer. The releases can also be found on the Coy Paper Web site at http://coypaper.com and click onto the industry resources tab. Also, an RSS feed is available. Happy reading. Would enjoy hearing some feedback.

Catalyst Paper in Talks to Restart Elk Falls Mill

Catalyst is in the middle of presenting a plan to restart production at the Elk Falls paper mill in British Columbia. The proposal is to start up at least 2 paper machines and begin a profit sharing system based on earnings in return for changes to wages and benefits. Elk Falls was shut in early February.

Will USA Manufacturing Ever Come Back?

Scary thought surrounding the pulp and paper industry is whether the production will return to normal times. Most think that manufacturing will see signs of life before 2012, but the industry will see more automation and more globalization of supply- good for companies – bad for employees. As the economy crawls out of recession and workers return to various factories and offices and homes begin to be brought – the forecast is for more paper (copies, invoices, acknowledgements, etc.) and more containers (more consumer units requiring corrugated container for packaging) demand. But, will China, India, Brazil and Russia fill the demand for paper?

AbitibiBowater Shutters Several Mills

The Coy Paper Company Blog continues to report on poor advertising and declining publication circulation because of the current recession.,
Like many forestry companies, AbitibiBowater has been hit hard by the slump in the North American advertising industry during the recession. Most publishers have cut the size of newspapers and magazines, reduced basis weight, switched to more economical papers, and decrease print runs in an effort to survive - all leading to less paper.

AbitibBowater just announced they will indefinitely close three Canadian mills and several paper machines involving four other mills, including one in the USA.
The company is slowly releasing details, but we understand mills effected include one of two newsprint machines in Clermont, Que.; the company will idle one of the machines at its Coosa Pines, AL paper mill indefinitely. The digital printing paper mill in Beaupre, near Quebec City, will be shut down completely; and, commercial printing operation at Fort Frances, Ont., will be closed. The industry has witnessed a 30 percent drop in demand in newsprint since the beginning of the year.

Has Newspaper Advertising Seen the Bottom?

Most advertisers on "Madison Avenue" still believe the advertising community has not seen bottom yet, but see some relief starting in Early 2010. The forecast for the third quarter of 2009 is for newspaper advertising to be down 25% from 2008, and estimates are for a poor forth quarter, but something better than the 3Q2009 decline.
The Newspaper Association of America recently reported a drop in both print and digital ad revenue of 16.6% for 2008, and 2009 will be worse. Beyond the challenges print media has for advertising dollars, retailer's sluggish sales have also hurt spending budgets. Let's hope for strong Holiday promotions!

InPlant Printers Report on Paper Usage

InPlant Graphics just published a survey conducted with nearly 400 InPlant printers.
-Most common paper orders, Colored at #1, Cover Stock, Bond, Copier, Carbonless (near the bottom of the list was Inkjet Paper)
-Generally it is the Inplant Manager or Plant Supervisor that is responsible for ordering paper
-Note: most buying is by function NOT by brand name
-When asked about 'going green', most would go green BUT not if paper is more expensive
-Most inPlants ordered LESS paper so far in 2009 vs this time in 2008
-Most Inplants purchase paper through a local merchant and spent $75,000-$200,000/year on average.

Printers Report Better Profits in Second Quarter

RR Donnelley, World Color Press, Transcontinental, Cenveo, Deluxe, Consolidated Graphics and Standard Register all reported a combined second quarter profit of $122.2 million, a significant improvement over a loss of $21.2 million for the first quarter of 2009. Although this is encouraging the results are still 43% lower than the second quarter for 2008. Every company reported lower revenue, but the pace of decline has slowed.

Wausau Paper to combine business units

Wausau Paper plans to combine its specialty products business and its printing and writing business into one strategic operating unit.
The new business will be called Wausau Paper Mills LLC and will include production plants in Rhinelander, Brokaw and Mosinee in Wisconsin and the Brainerd, Minn facility. The plants manufacture printing and writing papers and technical specialty papers.
The new unit will be led by Henry Newell as senior vice president. Newell is now the senior vice president of printing and writing business.
The firm's towel and tissue business unit (produces "away from home" towel and tissue products) will not be involved with this consolidation.
Earlier this year we reported that Wausau Paper closed a paper mill in Jay, Maine, and a converting facility in Appleton in order to cut costs; these remain shuttered.

Truckers still Aggressively Compete

Transportation is a large cost component for the paper manufactures and respective end users for both inbound raw materials and out bound finished paper grades. Although, recently, signs that overall freight demand has bottomed and is picking up, the less-than-truckload market remains extremely competitive. Many of the bigger carriers continue to offer steep discounts in an effort to grab market share in the down economy.
Still, shippers think prices are going to go up over the next few months.

Struggle Continues to Sell Business Week

Bruce Wasserstein became the second bidder to depart the bidding contest for Business Week. Business Week's owner, McGraw-Hill, is concerned that the value of print media is declining.

Conde Nast Expects to Cut Costs Deeply

Conde Nast recently reported that advertising revenue at virtually every publication has decreased this year with no rebound in sight. Executives are expecting to have to cut spending by up to 25%.

Is Printed Direct Mail Dead?

The editors of Target Marketing Magazine acknowledge that the USA postal service has delivered 12billion less pieces so far in 2009, and that direct mail spending is down; and that email spending and promotions are up; and that there are environmental concerns and pressure for 'greener' promotions. BUT, they have confidence that direct mail spending will increase as the economy improves. They report that 18.8 billion promotional pieces were mailed in the second quarter of 2009 and that the spend will double by 2013. Many marketing exports argue the return on the amount invested for mailed pieces is still better than other medias, and, because the share number of emails have skyrockets, in-boxes have become difficult to manage.
There was a recent survey that revealed over 210 billion emails are sent every day, worldwide. Let’s hope direct mail returns – this is very good for paper demand.

Sonoco Stops Producing Corrugated Tubes

Sonoco has been facing significant reductions in customer orders over the past year and recently made the decision to close the Orrville, OH plant. Sonoco, founded in 1899, is a global manufacturer of consumer and industrial packaging products and provider of packaging services, with more than 300 operations in 35 countries serving customers in some 85 nations. The plant was purchased in 2007 from Caraustar Industries.

Market Pulp Price Increase Flys without Resistance

The newest pulp increase of $40/MTon from all North American NBSK producers went into effect without resistance for buyers in North America, Asia, and Europe. The industry has witnessed lower inventories, higher than expected demand, weaker dollar, and return of a strong Chinese demand. Once fully implemented, the new market list price will be $770/MTon for NBSK (a 10 month high). Note, the major buyers and large spot buyers use the list price as a bench mark for discounted levels. Spot pricing is estimated to be around $620-640/MTon.
As reported in past releases, Catalyst Paper, Domtar, Fraser Paper, Terrace Bay
and Nanaimo Forest Products have announced starting up curtailed equipment in an effort to supply the increased demand.

Magazines Review Measuring Effectiveness of Advertisiments

Mediamark Research & Intelligence (MRI) continues to penetrate the magazine industry and their advertisers to increase advertisers' confidence in the effectiveness of printed advertisements. The MRI system (called AdMeasure) assists in confirming and measuring the reach for magazines' audience.
MRI will measure consumer recall and response to an advertisement.
MRI says AdMeasure will raise print ad measurement to the level of TV and Internet ratings.

More New Paper Grades Introduced

The major paper producers are busy introducing and marketing new paper grades. Along with the Ideal and Octane product introductions we reported earlier, the NewPage mill has also offered Arbor Plus which is a #2 quality sheetfed paper containing 30% recycled fiber and many certifications. Xerox recently marketing a coat one side digital paper for direct marketing applications.
Meanwhile, Verso is now aggressively selling their Clarity Supercalendered grades to compete against the more expensive coated groundwood products. Verso is producing both Clarity A and Clarity B out of the Sartell, MN facility. The product is targeted for catalogues and offers an economic benefit to the traditional #5 groundwood coated grade.
Note, Veros earlier started to produce light weight uncoated Versobook, Versotext, and Versoblend out of the Bucksport, ME mill.

Paper Industry Pocket over $3billion in Tax Credits

The USA pulp & paper mills earned over $3billion in “black liquor” credits for the 1st half of 2009 and are expected to earn even more in 2nd half. The program is scheduled to expire at the end of the year.
A few examples include International Paper has earned $1billion, Domtar, Verso, NewPage and AbitibiBowater have each recording $100million.

Magazines Announce Management Shakeup

In an effort to generate additional revenue in this challenging market, several magazines are making many changes in management. Reader's Digest will be announcing their top management changes this week and Hearst announced several executive positions changing for both O (the Oprah Magazine) and Country Living.

Federal Reserve Reports Recession Ending

Chairman Ben Bernanke reported that the economy has started to grow once again in the current quarter. Also, many analysts predict the economy is growing in the current July-September quarter at anywhere between 3 and 4 percent.
Most of that growth should come from more spending from businesses, which had slashed investments -- often by double-digits -- during the recession.
Consumers are also beginning to spend money, as witnessed by the success from the 'cash for Clunkers' program.
Manufacturing, meanwhile, reported "modest" improvements. Residential real-estate markets, which were hurt during the downturn, also illustrating signs of improvements. But the commercial real-estate market continued to be a drag in most markets.

NewPage to Shutter Coated PM in Maine

NewPage announced they will shut a coated groundwood (publication) paper machine in Rumford, Maine for the last 2 weeks in September. The mill’s output will be reduced by 6,000 tons.

Analyst Comments of Poor Newspaper Advertising Recovery

Wells Fargo researchers recently commented on a potential advertising recovery in third quarter.
The Wells Fargo team said ad revenue has stalled in August while September appears to be starting off weak. Specific focus was on the Gannett Group, a bell weather for the Newspaper industry.

Wells Fargo reduced its Q3 newspaper advertising revenue estimate for Gannett from a decline of 25.5 percent to a decline of 28.8 percent. Local is forecast to fall 22.5 percent, national is anticipated to drop 21 percent and classified is estimated to decrease 40 percent (versus a previous -19 percent, -18 percent and -37 percent respectively).

Overall advertising revenue is expected to fall 20.2 percent in Q4, revised down from a decline of 16.9 percent.

Update on Pulp Markets

As noted in our past releases, the entire pulp market has increased the price of pulp - both softwood and hardwood. If this $40/ton price goes through, and we think it will, the new NBSK 'list' price will rise to $770/mton in USA and $740/mton in Europe, and $650/mton in China. Reports outline the spot transaction price in USA for NBSK will go to $585-615/mton. Producers such as : Catalyst Paper, Domtar, and Fraser Paper, have all announced pulp mill restarts.

Kraft Market Showing Improvement

The Kraft Paper producers in North America have announced a $40-50/ton price increase. The manufacturers report recent strength in order backlogs, a pop in raw materials costs,
capacity curtailments, and the recent weakening of the dollar have all strengthen the market. .

Curtis Mill Purchased

Georgia Pacific and International Paper jointly purchased the old Curtis Mill in Milford, NJ and will clean up the site. The mill produced 175TPD of waxed cereal bag liners.

Brazil's Pulp Market Shows Strength

Brazilian pulp industry is starting to recover from the weak global demand for pulp and paper products, according to Wood Resources International (WRI).
In April, pulp exports equalled 766,000 tons, up 43 percent from the previous month and 140 percent higher than shipments a year earlier, WRI said in its Wood Resource Quarterly report.
The Brazilian pulp companies have benefited from closures of pulp mills resulting in reduced production capacity in the Northern Hemisphere and an increase in demand for pulp in China
Production reached 12.8 million tons, which was up from 11.8 million tons in 2007.

More on Coated Market Pricing

Most of the major producers of both coated free sheet and coated groundwood publication papers state the rate of decline in demand has slowed over the past few months. As reported earlier, Verso and NewPage have taken this opportunity to introduce price increases of $40/ton on Coated Free grades and an attempt to reduce discounts and increase transaction prices of $20/ton is solidly in the market for the publication grades.
The mills have experienced increases in input costs such as pulp and energy, also inventories levels have declined. Our read is the industry has a good chance of increasing transaction prices for coated papers - but may require market related curtailment of capacity to control supply.

All Major Mills Increase Newsprint Price

As a follow up to our earlier report, all of the major North American producers of Newsprint have now joined in announcing a price increase of $70/metric ton. The industry has really been licking its wounds, with a low market price in August of $470/metric ton - now mills such as Kruger, White Birch, Catalyst, Norpac, and Tembec have joined AbitibiBowater with the increase.
These mills make up 9.6 million metric tons of capacity.
All are introducing the price in two increments (September / October in East; October/November in West)

Georgia Pacific and International Paper jointly purchased the old Curtis Mill

Georgia Pacific and International Paper jointly purchased the old Curtis Mill in Milford, NJ and will clean up the site. The mill produced 175TPD of waxed cereal bag liners.

Box Company to Pack Up and Leave

Smurfit-Stone Container Corp., a Missouri-based company, is planning to close its box manufacturing plant in Portland, leaving 93 people unemployed.

Coated Paper Price Hikes Attempted.

Verso announced $40/ton Coated Free Sheet price increase for shipments after September 15. NewPage followed this announcement and added a $20/ton hike on their coated publication grades. Many buyers were surprised. The market is still experiencing overcapacity. Perhaps, the shuttered equipment has created a shortage of supply to yield a tightening availability?

New Magazines to make debut

Although we generally report on the poor health of the magazine industry, a few recent magazine launches include: Afar, 944 Media Atlanta and Detroit, Port City Life as Maine, Bi-monthly UFC, Energy Efficiency & Technology, Healing Lifestyles & Spas , Vitamin Shoppe’s publications Amazing Health and Muscle & Performance. We wish them good luck in this challenging climate.

NewPage will Produce Uncoated Grades

NewPage Corporation, once 100% coated papers, will expand it's uncoated offering with two new products, Octane and High Octane.
Octane is an 80 bright, uncoated mechanical paper produced in Whiting, Wisconsin and is engineered for both heatset and coldset printing applications and has a standard offering in 35 lb., 38 lb., 40 lb. and 45 lb.
High Octane, an 84 bright, uncoated freesheet paper produced in Rumford, Maine is manufactured for heatset presses in a range of basis weights from 35 lb. to 45 lb.

UPM and Xpedx Ink Deal

UPM signed a multi-year agreement with Xpedx on distributing selected coated paper to commercial printers in the US and Canada. The paper will be available through all Xpedx distribution outlets and is ensured with PEFC or FSC standards.

Freedom Communications Becomes Statistic

Freedom Communications, who owns The Orange County Register of California and 30 other dailies, filed for bankruptcy. Under reorganization, 26 secured lenders will take over. Owners: the Hoiles family, Blackstone and Providence Equity will have equity stakes reduced to 2%.

Update on the Kraft Paper Market

The Kraft industry is witnessing increased demand in Kraft Paper and therefore the $40-50/ton price advance announced by major USA producers is gaining traction. Back logs have expanded from a few days to weeks.

Update on Market Pulp

We continue to report on the strength of the pulp markets, and this week is no different. All the major NBSK and hardwood producers announced $40/ton price increase for September. This will be the fourth consecutive price hike in North America and the fifth in Europe, and sixth in
Asia. Reports in the USA for spot transactions reveal NBSK price rose to $585-615/mton. The increases are a result of reduced inventories, continued strong demand in China, and increase in USA demand.
We also note, manufacturers such as Catalyst Paper, Domtar, and Fraser Paper have announced mill
restarts.

Update on Uncoated Woodfree Paper

It appears the recent announcement by the major North American producers for uncoated woodfree papers ( offset and commercial printing grades) for $40/ton is taking hold. This increase, effective with September shipments, excludes cutsize paper and converting grades. The primary factors supporting the higher paper prices include higher pulp prices, increased demand, and lower mill inventories from extensive curtailments and reduced imports.

Newsprint Advertising Down

According to the Newspaper Association of America, print ad sales plunged by more than 30% in the second quarter from a year ago, the worst decline on record. It's also steeper than the 29.7% drop registered in the first quarter -- which had been the worst decline on record.

A recent survey by MORI Research indicated "newspaper advertising remains the leading advertising medium cited by consumers in planning, shopping and making purchasing decisions." The research concludes that when the economy eventually begins its recovery, advertisers will return to spending, and newspapers will find themselves extremely well positioned to harness the strength of their print and digital platforms to build a brighter future. Let's hope this survey is right, for the sake the paper industry and the future of newspapers.

Coupons Arrive to Cell Phone

The newest marketing initiative is mobile coupons. Several new companies have emerged that are forwarding relevant coupons to folks that opt in to programs to electronically (via Smart Phone) receive coupons. This is becoming a growing feature and advertisers such as Kmart, Thyrsus, and Zales confirm the redemption rate is 15-20% (versus 1% for printed/ paper coupons). Another nail in the coffin for Free Standing Inserts and Paper.......

USPS Predicts Mail Volume will return

The United States Postal Service is forecasting that once the recession ends marketers will be back mailing promotions and corporations’ will be mailing invoices. The service has been in trouble, current 2009 estimate is for deficit for USPS of $7Billion and mail has been trending down – 2006 – 213billion pieces, 2008-202billion pieces and 2009 estimate is 175billion pieces. The Postal Service believes the biggest culprits include 70% of households with computers now pay bills on line; electronic mailing of tax returns; and a big campaign for ‘less paper is greener for America’. Also, recently, marketing for direct mail including credit card offers and bulk advertising is way down. Another challenge is the increase of communication through smart phones and not mail.
With knowledge of all these challenges, USPS feels printed advertising is more powerful than electronic communication and marketers will return once the economy improves. Less mail means a lot less paper!

AbitibiBowater Raises Newsprint Prices

AbitibiBowater is beginning to inform end users that they will implement a $70/ton newspaper price increase in two stages. The first is a $35/ton hike on Sept. 1; followed by another on Oct. 1.

The pulp market Continue to Increase thanks to China

2009 has yielded many challenges for the Paper producers; summarized by limited success in holding, much less increasing prices. Newsprint producers have seen their prices drop to cash costs -mainly due to pressure from poor demand. While demand has not been stellar, the uncoated freesheet and packaging producers have maintained significantly better margins and are now looking at price increases for the Fall.
Pulp pricing, the basic raw material for all paper, has recently witnessed price increases and extended backlogs. The Chinese market has really assisted improved pulp demand.

Packaging Companies Downsizing

In a recent survey by PFFC, distributors for unprinted rolls and sheets reduced their workforce as well as converters of Tags, labels, and tapes as well as paperboard packaging and will not rehire until several months on increased orders are actually on the books.

AbitibiBowater Plans to Restart Paper Machine

AbitibiBowater Plans to restart the #6 paper machine in Fort Frances, Ontario for 3 weeks. If more orders are received, they may run it longer.