Asia Pulp & Paper (APP), the leading exporter of coated paper from China and Indonesia (capacity of 15Million tons), fully expects the preliminary ruling to be overturned for the Anti Dumping case. They maintain the mills that export from China and Indonesia have never sold their products in the United States at less than fair value.
The preliminary ruling outlined the company illegally dumped paper in the United States. The USA Producers maintain the domestic market was being flooded with imported coated paper. The offshore produces state domestic shipments of coated paper are down because overall demand is down in this bad economy, not because of any alleged unfair practices of Chinese and Indonesian producers and importers.
In the current case, the preliminary anti-dumping and countervailing duty applied to Asia Pulp and Paper products are 43.65% on products from China, and 28.1% on products from Indonesia, as reported in our past releases.
The Department of Commerce’s final rulings are expected to be released in September. The last phase of the cases takes place in October or early November, when the U.S. International Trade Commission will determine if the U.S. paper industry has been harmed.
Friday, April 30, 2010
Internet Advertising passes Printed Advertisements
The year 2009 was a struggle for anyone selling advertising space, but it might have been a little easier for those selling space on the internet. For the first time, the percentage of dollars (12.6%) favored the global spending on internet advertisements versus the segments such as magazines (10.3%). Newspapers, also, continue to loose market share for advertising dollars to the web. The overall reduction in ad spending for 2009 was 12.3% ($22.7Billion), and I note online spending was also down, declined 3.4%.
Thursday, April 29, 2010
Future Revenue for Printers Expected to increase
The Freedonia Group recently made a study available
Study Highlights:
-Revenue for the USA commercial printing industry, which includes prepress and printing services on a job order basis, is expected to increase 2.1 percent per year to $77.7 billion in 2014.
-Gains will be aided by a cyclical rebound in advertising expenditures and increased outsourcing by newspaper publishers. Although the volume of printed pages in periodicals such as newspapers will fall, commercial printers will benefit as many publishers outsource their printing operations.
-Digital printing is expected to achieve the fastest gains based on its lower cost, quick turnaround and ease of customization for shorter print runs. Digital technology is a game-changer in many printing applications -- such as direct mail and book publishing -- as it accommodates both variable-data printing, which allows for the creation of individualized products, and print-on-demand, which allows customers to shrink inventories.
Study Highlights:
-Revenue for the USA commercial printing industry, which includes prepress and printing services on a job order basis, is expected to increase 2.1 percent per year to $77.7 billion in 2014.
-Gains will be aided by a cyclical rebound in advertising expenditures and increased outsourcing by newspaper publishers. Although the volume of printed pages in periodicals such as newspapers will fall, commercial printers will benefit as many publishers outsource their printing operations.
-Digital printing is expected to achieve the fastest gains based on its lower cost, quick turnaround and ease of customization for shorter print runs. Digital technology is a game-changer in many printing applications -- such as direct mail and book publishing -- as it accommodates both variable-data printing, which allows for the creation of individualized products, and print-on-demand, which allows customers to shrink inventories.
Paper Up in March
Notes from a recent RISI report-
Pulp & Paper Product's Council reported that printing and writing paper shipments up 10% in March to 1.9Million tons, the fifth month of gains. Coated paper shipments grew to 665,000 tons, with coated freesheet up 27% and coated mechanical up 24%. Uncoated mechanical paper grew 6% to 431,000 tons while uncoated freesheet was up 2% to 829,000 tons. Total exports increased 37.2% in 1Q to 279,000 tons and mill inventories shrunk 22% to 1.55Million tons by the end of March.
These findings are consistent with our past releases.
Pulp & Paper Product's Council reported that printing and writing paper shipments up 10% in March to 1.9Million tons, the fifth month of gains. Coated paper shipments grew to 665,000 tons, with coated freesheet up 27% and coated mechanical up 24%. Uncoated mechanical paper grew 6% to 431,000 tons while uncoated freesheet was up 2% to 829,000 tons. Total exports increased 37.2% in 1Q to 279,000 tons and mill inventories shrunk 22% to 1.55Million tons by the end of March.
These findings are consistent with our past releases.
Smurif-Stone to Exit Bankruptcy
Smurfit-Stone Container, one of the industry's largest containerboard and corrugated packaging producers, announced plans to exit chapter 11. The company will reorganize and become a much leaner organization.
UPM-Kymmene Posts Profit
The world's largest magazine paper maker,UPM-Kymmene, posted a first quarter profit of $93Million (euro70Million), compared with a 2009 loss. The company reported that sales rose 10%.
Tuesday, April 27, 2010
All Paper Grades up
•Uncoated free sheet (UFS) shipments up versus year-ago for fourth consecutive month.
•Coated free sheet (CFS) shipment surges; this is fourth double-digit growth versus year-ago.
•Year-ago shipments of coated mechanical (CM) robust enjoying better gains than Coated Free and fifth consecutive double-digit year-ago increase.
•Increase of uncoated mechanical (UM) shipments passes 20% for second time in past three months.
This is fifth consecutive month of increase. Maybe the improved economy and new paper demand is for real and sustainable!
•Coated free sheet (CFS) shipment surges; this is fourth double-digit growth versus year-ago.
•Year-ago shipments of coated mechanical (CM) robust enjoying better gains than Coated Free and fifth consecutive double-digit year-ago increase.
•Increase of uncoated mechanical (UM) shipments passes 20% for second time in past three months.
This is fifth consecutive month of increase. Maybe the improved economy and new paper demand is for real and sustainable!
Newspaper Circulation Continues Down
Recent reports for the USA Newspapers confirms the deep circulation declining trend is continuing. The average publisher reported weekday sales were down nearly 9% from 2008. Sunday sales have decreased 6.5%. This trend is universal, with almost all chains, and most of the smaller newspapers, sighting decreases. The nation's top 10 newspapers reported over 10% declines and added that it is a direct result of the electronic media cannibalizing market share.
Coated Paper Anti-Dumping Update Decision Delayed
The Department of Commerce’s second preliminary decision, anti-dumping charges, in the trade case regarding certain imported coated paper from China and Indonesia was delayed to Friday, April 30. The first preliminary decision, March 2, covered countervailing duties. The final ruling will be in September for both issues
The last phase of the cases takes place in November, when the U.S. International Trade Commission will determine if the U.S. paper industry has been harmed. Only an affirmative ruling at that time would lead to the imposition of duty order on the coated paper in question from China and Indonesia.
The last phase of the cases takes place in November, when the U.S. International Trade Commission will determine if the U.S. paper industry has been harmed. Only an affirmative ruling at that time would lead to the imposition of duty order on the coated paper in question from China and Indonesia.
International Paper Buys SCA's Packaging Business
International Paper will buy SCA's packaging business in Asia for $200Million. This acquisition includes 13 box plants and $250Million in sales. This purchase will compliment International Paper's current non integrated container business in Asia and enforce the objective of growing its global footprint.
Wednesday, April 21, 2010
New Capacity Starts up in China
China's Sun Paper reported that #3 machine, with a capacity of 350,000TPA, is now in commercial production. The company plans to also install a new uncoated mechanical paper machine, PM #24, at the same facility.
A second Chinese company, Fujian Nanping, rebuilt two newsprint machines at its mill and converting them in March to uncoated printing and writing paper. Both PM #3 and PM #4 have capacity of 50,000TPA. We suspect most of this capacity will remain in Asia.
A second Chinese company, Fujian Nanping, rebuilt two newsprint machines at its mill and converting them in March to uncoated printing and writing paper. Both PM #3 and PM #4 have capacity of 50,000TPA. We suspect most of this capacity will remain in Asia.
Update on Japanese Mill Curtailments
The PPI edition for Asia reported on the following-
In Japan, last year, a total of 32-paper machine closures were announced, with combined capacity taken out of 1.463Million TPA, representing 5% of total paper and board. In 2010 there have been additional closings, including Oji’s shutting down the 130,000 TPA coated paper machine, PM #10, at its Kasugai plant, Aichi prefecture. They also plan to close a kraft paper machine, PM #4, at the Kure mill, Hiroshima prefecture, and convert the 180,000TPA PM #5 from printing/writing paper to kraft paper, taking that capacity out of the market. Despite curtailments, prices remain stagnant.
In Japan, last year, a total of 32-paper machine closures were announced, with combined capacity taken out of 1.463Million TPA, representing 5% of total paper and board. In 2010 there have been additional closings, including Oji’s shutting down the 130,000 TPA coated paper machine, PM #10, at its Kasugai plant, Aichi prefecture. They also plan to close a kraft paper machine, PM #4, at the Kure mill, Hiroshima prefecture, and convert the 180,000TPA PM #5 from printing/writing paper to kraft paper, taking that capacity out of the market. Despite curtailments, prices remain stagnant.
Pulp Markets Remain Strong
The global pulp market remains extremely tight. Recall, we have announced numerous pulp mills that were shut down due to poor economics, now the lack of supply has hurt availability for most fibers. Catalyst Paper announced the reopening early May of the second pulp line in British Columbia, with a capacity of 165,000 tons of NBSK, this should help.
Major producers have all announced $30-50/MT price increases for May. Price levels for Domtar, Canfor and Mercer International for NBSK will transact at $1,000/MT for May (up $40/MT). NBSK in North America prices will be up 13% from the July 2008; note, this is 57% from May 2009 (the lowest price point of this current cycle). Pulp producers in Europe have also increased pulp prices for May $30/MT and $50/MT for hardwood - BEK.
The disruption of supply from the Chilean earthquakes, the strikes in Sweden, and now, spring maintenance have all resulted in even less availability.
Major producers have all announced $30-50/MT price increases for May. Price levels for Domtar, Canfor and Mercer International for NBSK will transact at $1,000/MT for May (up $40/MT). NBSK in North America prices will be up 13% from the July 2008; note, this is 57% from May 2009 (the lowest price point of this current cycle). Pulp producers in Europe have also increased pulp prices for May $30/MT and $50/MT for hardwood - BEK.
The disruption of supply from the Chilean earthquakes, the strikes in Sweden, and now, spring maintenance have all resulted in even less availability.
Electronic Coupons on the Raise
Coupons that are now sent to an Internet address or a mobile devise are gaining in popularity. These are the fastest growing segment on redemption of coupons. On line product coupons increased 263% or 50Million from 2008. Perhaps, like newspapers, books and maybe magazines, printed coupons might start to decline with the cannibalism from electronic communication.
Monday, April 19, 2010
Coy Paper News Releases on Twitter
You can catch all the headlines from the Coy Paper Company LLC current news on the pulp and paper industry on Twitter. Or set up this blog on our RSS feed, located on the lower right side of this page.
The Twitter site can be found on http://twitter.com/CoyPaper There is no requirement to be a Twitter member.
The Twitter site can be found on http://twitter.com/CoyPaper There is no requirement to be a Twitter member.
Printed Book Sales continue to Decline
Overall book sales fell almost 2% in 2009 (vs 2008) to approximately $24Billion. One segment hard hit was the 5.2% decline in sales for adult paperback books.
Although the EReader only accounted for 1.3% of book sales for 2009, most industry experts feel this will grow dramatically. This could, ironically, assist printed book sales ..... short term; however, if electronic reading devises catch on, printed books could experience a dramatic decline.
Although the EReader only accounted for 1.3% of book sales for 2009, most industry experts feel this will grow dramatically. This could, ironically, assist printed book sales ..... short term; however, if electronic reading devises catch on, printed books could experience a dramatic decline.
ContainerBoard Stays Strong
The March figures for Containerboard are beginning to be reported and it appears inventories are down (down 40,000 tons vs. February) and box shipments are up nearly 7% (vs. March 2009). All positive signs for the success for the recent April price increase.
Reed Closes 23 Publications
Reed Business Information (RBI), a division of Reed-Elsevier, has been unsuccessful in confirming a buyer for many of its business-to-business publications, announced that it is closing 23 book publications.
Friday, April 16, 2010
Top Paper Companies for Alternative Fuel Credit
Much has been written about the black liquor credit many of the USA pulp and paper producers enjoyed. This tax credit allowed many of the manufacturers to report a profit in 2009, despite both depressed demand and pricing.
The top 5 that enjoyed their share of the $8Billion total paid include
International Paper $2Billion
Georgia Pacific $1.02Billion
Smurfit Stone $560Million
Domtar $495Million
MeadWestvaco $$320Million
The top 5 that enjoyed their share of the $8Billion total paid include
International Paper $2Billion
Georgia Pacific $1.02Billion
Smurfit Stone $560Million
Domtar $495Million
MeadWestvaco $$320Million
MRI Reports E-Reader Owners Read More Magazines
From a recent MRI report-
In the Mediamark Research & Intelligence Survey of the American Consumer, findings show that 91% of e-reader owners read magazines, reading on average 13 magazines each month. This is higher than the US adult population in general, of which 84% read magazines reading an average of 11 magazines/month. E-reader owners also appreciate and value the benefits of magazines more, i.e. they are 26% more likely than an avg adult to say magazines relax them, 20% more likely to report that magazines make them think and 11% more likely to feel that magazines give them good ideas. This is a good indication of the potential of these devices to become strong magazine platforms in the future. MRI ‘s Survey of the American Consumer interviews 26,000 US adults, aged 18+, in their homes each year, with results being projectable to the entire US adult population. Data is released twice yearly, in the spring and fall.
In the Mediamark Research & Intelligence Survey of the American Consumer, findings show that 91% of e-reader owners read magazines, reading on average 13 magazines each month. This is higher than the US adult population in general, of which 84% read magazines reading an average of 11 magazines/month. E-reader owners also appreciate and value the benefits of magazines more, i.e. they are 26% more likely than an avg adult to say magazines relax them, 20% more likely to report that magazines make them think and 11% more likely to feel that magazines give them good ideas. This is a good indication of the potential of these devices to become strong magazine platforms in the future. MRI ‘s Survey of the American Consumer interviews 26,000 US adults, aged 18+, in their homes each year, with results being projectable to the entire US adult population. Data is released twice yearly, in the spring and fall.
Thursday, April 15, 2010
Heard in the market – Uncoated price Increase
We have released several pieces on the recent uncoated paper price increases and many of you have commented. The most recent announcement of $60/ton for May, follows a $40/ton price increase in April. This will bring cut-size office paper list prices to $1,050 to $1,100/ton or an average $1,075.
Buyers polled by Purchasing.com say March delivered prices averaged $1,090. Forms bond dipped under $1,000 last April and for the past year have averaged $978/ton, delivered. PPI Pulp & Paper Week says forms bond list has averaged $985for the past year, as compared with $1,115 a year-ago-March.
Buyers polled by Purchasing.com say March delivered prices averaged $1,090. Forms bond dipped under $1,000 last April and for the past year have averaged $978/ton, delivered. PPI Pulp & Paper Week says forms bond list has averaged $985for the past year, as compared with $1,115 a year-ago-March.
AF&PA Reports on First Quarter
Yesterday, we issued a release from UBS on the industry, today, the American Forest and Paper Association reported preliminary printing and writing paper increased 10.7% (4.435 million tons)in the first quarter of 2010.
Total coated paper shipments through 1Q rose 20% to 1.743 million tons with coated freesheet volume up 17.1% to 881,700 tons and coated mechanical shipments up 23%, to 860,000 tons. Total uncoated paper shipments rose 5.4% to 2.692 million tons in 1Q with uncoated mechanical shipments up 27.3% vs. last year, and uncoated freesheet up 2.2% to 2.275 million tons.
Note, these statistics are still preliminary (and slightly different than UBS). Of particular note - both reports illustrate increased demand.
Total coated paper shipments through 1Q rose 20% to 1.743 million tons with coated freesheet volume up 17.1% to 881,700 tons and coated mechanical shipments up 23%, to 860,000 tons. Total uncoated paper shipments rose 5.4% to 2.692 million tons in 1Q with uncoated mechanical shipments up 27.3% vs. last year, and uncoated freesheet up 2.2% to 2.275 million tons.
Note, these statistics are still preliminary (and slightly different than UBS). Of particular note - both reports illustrate increased demand.
Increased Pulp Prices Could Hurt Global Paper Industry
Although the vast majority of USA paper producers are integrated (produce pulp on site), the smaller mills must purchase fiber at market pricing. In contrast, nearly all of the European and Asian paper producers are non integrated and must buy pulp. This model, over the past several years, with depressed pulp prices, has been advantageous. However, with the current aggressive price increases, the non integrated mills are experiencing dynamic cost increases. Also, the foreign mills must also contend with the stronger US Dollar.
Two large USA mills to watch that buy fiber include Wausau and NewPage. Clearly, without the support of the black liquor credit and, now, fiber increases, their margins will be under pressure.
Two large USA mills to watch that buy fiber include Wausau and NewPage. Clearly, without the support of the black liquor credit and, now, fiber increases, their margins will be under pressure.
Wednesday, April 14, 2010
Preliminary Printing and Writing Paper Figures for March
Based on recent UBS report-
UBS reported that coated freesheet shipments in the USA in March increased 27.1% vs. last year, the 5th consecutive month of growth reaching the highest level since Oct 2008. Coated groundwood shipments rose 33.9% vs. last year, also the 5th consecutive month of growth. Both grades were compared against easy baselines last March. Uncoated groundwood shipments increased 26.5% vs. last year, but uncoated freesheet paper was a bit weak, almost flat with last year. Note, these are preliminary figures.
UBS reported that coated freesheet shipments in the USA in March increased 27.1% vs. last year, the 5th consecutive month of growth reaching the highest level since Oct 2008. Coated groundwood shipments rose 33.9% vs. last year, also the 5th consecutive month of growth. Both grades were compared against easy baselines last March. Uncoated groundwood shipments increased 26.5% vs. last year, but uncoated freesheet paper was a bit weak, almost flat with last year. Note, these are preliminary figures.
Advertising Pages Suffered in First Quarter
The all important index of advertising pages for magazines fell 9.4% in the first quarter of 2010 to 34,800 pages (compare to 1Q2009). This was a disappointment for most publishers, hoping the improved economy would turn the trend around. It was especially frustrating in that 2009 ad pages for the first quarter were down nearly 26% from 2008 to 37,200.
Comparing 1Q2010 to 2009, financial, insurance, and real estate actually saw an increase of 11.3% and cosmetics were up 7.6%; however, apparel and accessories were down 15.7%, pharmaceuticals down 15.6%, transportation and hotels down 13%, and media was down 13%. Fewer advertising pages generally translates into less editorial pages, as well, which means less paper consumed.
Comparing 1Q2010 to 2009, financial, insurance, and real estate actually saw an increase of 11.3% and cosmetics were up 7.6%; however, apparel and accessories were down 15.7%, pharmaceuticals down 15.6%, transportation and hotels down 13%, and media was down 13%. Fewer advertising pages generally translates into less editorial pages, as well, which means less paper consumed.
Tuesday, April 13, 2010
Paper Demand and Prices continue Up
Demand and prices continue their upward trend for both pulp and paper. In almost every paper and pulp grade, tight markets and elevated costs are pushing prices higher. Supply is down and demand (versus a depressed 2009) appear up. Perhaps the most notable advanced pricing initiative is in containerboard, where producers announced $60/ton
increase for April 1, immediately after a $50/ton increase in January. Producers sight improving demand, lean inventories, limited capacity, and higher costs all create a good environment for price increases.
As reported recently in the Coy Paper releases, all uncoated paper producers for literally all free sheet uncoated markets have announced a $60/ton price hike for early May.
increase for April 1, immediately after a $50/ton increase in January. Producers sight improving demand, lean inventories, limited capacity, and higher costs all create a good environment for price increases.
As reported recently in the Coy Paper releases, all uncoated paper producers for literally all free sheet uncoated markets have announced a $60/ton price hike for early May.
USA Printing Shipments Down in February
USA commercial printing shipments dropped 7.2% in February, reaching $6.57 billion. Shipments were down 6.4%, for the first two months of 2010 indicating a yearly forecast of approximately $82-84 million.
Increased paper prices and the recent advancement of EReaders will not help this trend.
Increased paper prices and the recent advancement of EReaders will not help this trend.
International Paper Introduces Environmental website
International Paper launched its new environmental website, Down2earthonline.com. The site reviews issues to assist consumers to better understand some of the myths and misconceptions of recycled paper. By educating those inside our industries, customers and end users can better understand these complex environmental issues and the steps that the forest products and printing industries are taking to become more sustainable and make positive contributions to our world.
As we have written in our past releases, the paper industry continues to be a good environmental stewart, yet, have not done a good job promoting this fact.
As we have written in our past releases, the paper industry continues to be a good environmental stewart, yet, have not done a good job promoting this fact.
Thursday, April 08, 2010
Another Day, another Uncoated Free Sheet Price Increase
International Paper and Domtar announced a $60/ton uncoated free sheet price increase for May shipments. The initiative applies to desk top / copier paper, offset, and converting grades such as envelope. This is the second price increase for 2010.
Current pricing for cutsize business paper is $1050-1100/ton; rolls are $885-900/ton
We assume the remaining producers, such as Boise, Wausau Paper, & Glatfelter will also increase.
Current pricing for cutsize business paper is $1050-1100/ton; rolls are $885-900/ton
We assume the remaining producers, such as Boise, Wausau Paper, & Glatfelter will also increase.
Europe Reports on Strong Shipments
Report from CEPIFINE
CEPIFINE reported that fine paper shipments in Europe increased in Feb, both domestically and exports. Coated woodfree shipments rose 10.9% to 633,000 tonnes, with domestic deliveries up 7% to 501,000 tonnes and exports up 2% to 104,000 tonnes. Uncoated woodfree shipments rose 12.1% to 647,000 tonnes, with domestic up 4.8% to 543,000 tonnes and exports up 120% to 132,000.
CEPIFINE reported that fine paper shipments in Europe increased in Feb, both domestically and exports. Coated woodfree shipments rose 10.9% to 633,000 tonnes, with domestic deliveries up 7% to 501,000 tonnes and exports up 2% to 104,000 tonnes. Uncoated woodfree shipments rose 12.1% to 647,000 tonnes, with domestic up 4.8% to 543,000 tonnes and exports up 120% to 132,000.
Digital Book Publishing may Grow Faster
The digital media already has built in efficiencies – no warehouse costs, no make ready, cost effective small runs, no need to repulp the unsold books, and zero inventory, to name a few. Other advantages include quick turnarounds as well as provide the ability for unknown authors to publish and distribute a book.
The forecast is for growth of digital publications to increase to 15-20% of the print volume over the next 5 years. This would yield a market share of 10% by 2013 and 15% by 2015. Printed books reached their peak with sales of 3.13Million units in 2007.
I would assume if EReaders, like the recently introduced IPAD, continues to grow, it may come at the cost of printed material. That said, it may also bring more people to books and magazines and assist Digital publishing and printed books and magazines, at least short term.
The forecast is for growth of digital publications to increase to 15-20% of the print volume over the next 5 years. This would yield a market share of 10% by 2013 and 15% by 2015. Printed books reached their peak with sales of 3.13Million units in 2007.
I would assume if EReaders, like the recently introduced IPAD, continues to grow, it may come at the cost of printed material. That said, it may also bring more people to books and magazines and assist Digital publishing and printed books and magazines, at least short term.
Wednesday, April 07, 2010
Sales Down for Label Giant Avery Dennison
Avery Dennison reported sales revenue of $6Billion for 2009, a decline of 11 percent from $6.7 billion in 2008. Net sales in the company’s pressure sensitive materials segment, which comprises 56% of its business, decreased 9% last year after a 4% gain in 2008. The company also reported a loss in net income of $746.7Million.
Avery Dennison's CEO reported “Sales volumes dropped during the first half of the year as customers substantially reduced inventories and recovered only modestly later in the year”.
Avery Dennison's CEO reported “Sales volumes dropped during the first half of the year as customers substantially reduced inventories and recovered only modestly later in the year”.
USA Printers Profitable in 2009
As reported in these releases in past, the USA commercial printers witnessed declines in volume; however, with respective cost reductions, the industry recorded a $700Million profit in 2009.
There are still challenges ahead. Shipments for January and February dropped 6.4% vs. 2009 and it is difficult to remain profitable with declining volume.
There are still challenges ahead. Shipments for January and February dropped 6.4% vs. 2009 and it is difficult to remain profitable with declining volume.
Tuesday, April 06, 2010
IPAD Introduction Could be Game Changer
As I am sure all our readers are more than aware, Apple introduced the IPAD and sold
over 300,000 IPADs. By comparison, they sold 270,000 iPhones when first available in 2007.
Initial reports reveal, many magazine customers are embracing the new format for print but appear upset at the 'excessive' prices for single issues.
Magazines are pinning their hopes on the EReaders and hope that, like the cel phone, MP3, and lap top, that Apple and IPAD will greatly assist the current decline in publication circulation and advertising revenue. But, these companies need to be careful on pricing so they do not alienate readers.
over 300,000 IPADs. By comparison, they sold 270,000 iPhones when first available in 2007.
Initial reports reveal, many magazine customers are embracing the new format for print but appear upset at the 'excessive' prices for single issues.
Magazines are pinning their hopes on the EReaders and hope that, like the cel phone, MP3, and lap top, that Apple and IPAD will greatly assist the current decline in publication circulation and advertising revenue. But, these companies need to be careful on pricing so they do not alienate readers.
Pulp and Paper Producers continue to Go Green
from Wood Resource Quarterly-
The global pulp and paper industry has substantially increased its use of woody biomass for energy the past few years, which has consequently reduced dependence on fossil fuels, reports the Wood Resource Quarterly. Since 2006, energy generated from biomass has gone up over 50%, last year accounting for 18% of the total energy consumption by this industry sector. Pulp and paper manufacturers worldwide consumed 75 million tons of woody biomass for energy in 2009.
The global pulp and paper industry has substantially increased its use of woody biomass for energy the past few years, which has consequently reduced dependence on fossil fuels, reports the Wood Resource Quarterly. Since 2006, energy generated from biomass has gone up over 50%, last year accounting for 18% of the total energy consumption by this industry sector. Pulp and paper manufacturers worldwide consumed 75 million tons of woody biomass for energy in 2009.
Price Increase for Containerboard a 'done deal'
Shipments for both January and February (and early reports for March) on box shipments
appear strong and, therefore, all the major producers have announced a 10% box price increase for April shipments. Note, Coy Paper confirmed a $60/ton April containerboard price increase announcement. This new announcement will be the second increase of 2010. Not only is demand stronger than 2009, but inventories are declining and operating rates are hoovering in the mid 90's.
appear strong and, therefore, all the major producers have announced a 10% box price increase for April shipments. Note, Coy Paper confirmed a $60/ton April containerboard price increase announcement. This new announcement will be the second increase of 2010. Not only is demand stronger than 2009, but inventories are declining and operating rates are hoovering in the mid 90's.
Pulp Market Update
Consistent with the Coy Paper recent releases, the global pulp market remains tight and the major producers have announced $50/MT increase for April. The real story is spot prices in the USA have increased sharply, with spot NBSK up $20/MT to almost $850/MT. Manufacturers in Chile are bringing to restart capacity, this will provide some relief to supply (and pricing) pressure.
World inventories are low, demand appears increased, and spring is generally the time most mills conduct maintenance; accordingly, do not look for much relief, short term.
Pricing recap
$50/MT for April; NBSK to $960/MT for North America
World inventories are low, demand appears increased, and spring is generally the time most mills conduct maintenance; accordingly, do not look for much relief, short term.
Pricing recap
$50/MT for April; NBSK to $960/MT for North America
Friday, April 02, 2010
Economics of Printed versus Digital Books
The IPAD will be introduced this weekend, and we thought it a good time to review the economics of Digital versus print.
The New York Times recently documented an article describing the economics of producing a traditional printed hard cover book and a digital book. They state the typical hardcover retails for $26.00, and the publisher generally is compensated 50% or $13.00 of this price. The publisher than must pay approximately $3.25/book for printing, warehousing, and shipping the book to the store. The publisher also pays a 15% royalty ($$3.90) to the author, $1.00/book for marketing, and about 3% or 0.80/book for design and editing. Accordingly, the publisher is left with about $4.00/book before paying staff and overhead expenses.
The current agreement with Digital distributors is to compensate the publisher 30%, or $9.00/book on a book retailing for $12.99 (or $7.00 for a book retailing for $9.99 – the level most are now looking at). Costs are lower than a printed book, outlined as 0.50 to convert the text to a digital file and .0.78 to market the book. The royalty is still being worked out, but currently most authors are settling in at 25% of the digital price or about $3 for the $12.99 retail or $2.50 for the $9.99 price. Given the math, the author makes slightly less, but hopefully sells more books, meanwhile the publisher makes slightly more.
Currently digital books make up a very small percentage of the market, but the growth potential is large.
Will you be making the switch from hard bound to tablet?
The New York Times recently documented an article describing the economics of producing a traditional printed hard cover book and a digital book. They state the typical hardcover retails for $26.00, and the publisher generally is compensated 50% or $13.00 of this price. The publisher than must pay approximately $3.25/book for printing, warehousing, and shipping the book to the store. The publisher also pays a 15% royalty ($$3.90) to the author, $1.00/book for marketing, and about 3% or 0.80/book for design and editing. Accordingly, the publisher is left with about $4.00/book before paying staff and overhead expenses.
The current agreement with Digital distributors is to compensate the publisher 30%, or $9.00/book on a book retailing for $12.99 (or $7.00 for a book retailing for $9.99 – the level most are now looking at). Costs are lower than a printed book, outlined as 0.50 to convert the text to a digital file and .0.78 to market the book. The royalty is still being worked out, but currently most authors are settling in at 25% of the digital price or about $3 for the $12.99 retail or $2.50 for the $9.99 price. Given the math, the author makes slightly less, but hopefully sells more books, meanwhile the publisher makes slightly more.
Currently digital books make up a very small percentage of the market, but the growth potential is large.
Will you be making the switch from hard bound to tablet?
Coated Paper Capacity Forecasted to Decline
AF&PA recently published a report on capacity, included is executive summary-
The annual survey of the American Forest & Paper Association reported declines in the U.S. capacity for all of the Printing & Writing Paper grades, excepting uncoated mechanical. Coated mechanical capacity fell -10.4% in 2009 and is forecast to decline by -6.8% in 2010 and -1.9% in 2011, remaining flat in 2012. Coated woodfree capacity in the U.S. decreased by -11.8% in 2009 and is projected to fall -4.3% in 2010 and remain unchanged in 2011 and 2012. Uncoated woodfree declined -5.4% for last year, but it has decreased -25% since 2000. Further decreases are forecast for 2010, -6.3% and 2011, -0.7%. There is no change forecast for 2012. Of the four P&W paper grades, the only increase in 2009 was in uncoated mechanical capacity, 6.2%. Projected numbers indicate continued expansion: 4.8% in 2010, 1.6% in 2011 and 0.6% in 2012.
The annual survey of the American Forest & Paper Association reported declines in the U.S. capacity for all of the Printing & Writing Paper grades, excepting uncoated mechanical. Coated mechanical capacity fell -10.4% in 2009 and is forecast to decline by -6.8% in 2010 and -1.9% in 2011, remaining flat in 2012. Coated woodfree capacity in the U.S. decreased by -11.8% in 2009 and is projected to fall -4.3% in 2010 and remain unchanged in 2011 and 2012. Uncoated woodfree declined -5.4% for last year, but it has decreased -25% since 2000. Further decreases are forecast for 2010, -6.3% and 2011, -0.7%. There is no change forecast for 2012. Of the four P&W paper grades, the only increase in 2009 was in uncoated mechanical capacity, 6.2%. Projected numbers indicate continued expansion: 4.8% in 2010, 1.6% in 2011 and 0.6% in 2012.
Smart Papers Announces new Recycled Grade
U.S. papermaker SMART Papers introduced Knightkote® 50 brand, FSC-certified, premium matte coated line which will have the highest amount of post-consumer waste (PCW) and recycled fiber.
Knightkote 50—available in a 92-bright, cool-blue White and Creme—is a comprehensive selection of 70,80 and 100lb. text papers, 65,80,and 100-lb. cover papers, a 7 and 9pt. business reply card and a 130lb. double-thick cover.
Knightkote 50 can be used in all offset, digital printing and converting applications including advertising and marketing materials, direct mail, brochures, books, free standing inserts, premium packaging, greeting cards and more.
Mohawk Papers will distribute this sheet.
Knightkote 50—available in a 92-bright, cool-blue White and Creme—is a comprehensive selection of 70,80 and 100lb. text papers, 65,80,and 100-lb. cover papers, a 7 and 9pt. business reply card and a 130lb. double-thick cover.
Knightkote 50 can be used in all offset, digital printing and converting applications including advertising and marketing materials, direct mail, brochures, books, free standing inserts, premium packaging, greeting cards and more.
Mohawk Papers will distribute this sheet.
Thursday, April 01, 2010
Magazines stay the Course of Printed Publications
Notes from ABC report-
Print subscriptions remain the core of consumer magazines. As reported by the Audit Bureau of Circulations, 278 million print subscriptions were active in the second half of 2009. As AdAge reported, even if 5 million people buy the iPad and every one of them buys the digital version of their magazine, print is still by far the dominant format. The Internet is increasingly useful to magazines in other ways, though; not only does it provide a centralized database of names and information, but it also is a platform for selling subscriptions on-line. Hearst reported that 45% of its subscriptions were generated on the Internet, up from 5% in 2005. Rodale said web subscriptions for its titles were up 15-25%. Condé Nast said 25% of its total new subscriptions were added on-line. The five publishers in the coalition to create a new digital storefront will be selling on-line editions of their magazine, yes, but the new venue will also be selling print subscriptions.
Comments on print vs. digital for getting and reading your favorite publications?
Print subscriptions remain the core of consumer magazines. As reported by the Audit Bureau of Circulations, 278 million print subscriptions were active in the second half of 2009. As AdAge reported, even if 5 million people buy the iPad and every one of them buys the digital version of their magazine, print is still by far the dominant format. The Internet is increasingly useful to magazines in other ways, though; not only does it provide a centralized database of names and information, but it also is a platform for selling subscriptions on-line. Hearst reported that 45% of its subscriptions were generated on the Internet, up from 5% in 2005. Rodale said web subscriptions for its titles were up 15-25%. Condé Nast said 25% of its total new subscriptions were added on-line. The five publishers in the coalition to create a new digital storefront will be selling on-line editions of their magazine, yes, but the new venue will also be selling print subscriptions.
Comments on print vs. digital for getting and reading your favorite publications?
Burgo also Announces Coated Price Increase
Burgo joins the major European coated paper producers in their announcement of a 6-8% increase in coated mechanical paper prices, effective in May and an increase for coated woodfree in June. The price of uncoated woodfree will also jump in May. This Coy Paper news release reported earlier that Norske Skog, Myllykoski, Arctic Paper and Lecta cited their plans to raise prices to combat raw material cost increases particularly of pulp.
Catalyst Joins newsprint Price Increase
Catalyst will raise its 30 lb. newsprint prices to match the recent AbitibiBowater $25/MT on May 1 and $25/MTon June 1. Looks like all systems GO for this increase.
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