Some Thoughts for 2010 on Paper

Given the massive downtime in all paper markets with nearly every mill participating in machine closures, demand might just be matching supply in the very near term. Paper has been readily available; prices are depressed, and, suffice it to say, it has truly been a ‘buyers market’. However, if the federal stimulus package takes hold and curtailed supply allow operating rates to go back into the mid 90s, the producers of paper could once again control pricing. Clearly, raw materials such as pulp and energy have increased in price; most likely the ‘black liquor ‘ credit will end December 31, 2009…. a current ‘life support’. We think 2010 could be snug – and suppliers will advance pricing throughout the year. The Coy Paper team strongly endorses buyers should begin to negotiate 2010 programs now.