The New York Times Co. plans to raise the cover price and home delivery price of its flagship paper in July. The cover
price of the Times will rise by 25 cents to $1.25 next month nationwide, company spokeswoman Catherine Mathis said on Wednesday.
Monday, July 02, 2007
Another Linerboard Price Increase
Weyerhaeuser has informed customers of a $40/ton price increase on 42-lb linerboard in the East and a $50/ton increase in the West effective with shipments Aug. 1.
Coated woodfree paper prices may come under pressure in Europe
Coated fine paper prices have gradually edged up during the first half of the year in Europe. But the market is showing
signs of softness as summer holidays approach and some suppliers fear prices may come under pressure.
A couple of producers are thinking about taking some downtime during the summer in a bid to keep prices steady. They hope the move will stand them in good stead for a possible hike later in the year.
A handful of producers have already announced plans to raise prices by 5-8% in September. Suppliers expect the market to tighten once the latest capacity closures begin to impact the supply pipeline.
signs of softness as summer holidays approach and some suppliers fear prices may come under pressure.
A couple of producers are thinking about taking some downtime during the summer in a bid to keep prices steady. They hope the move will stand them in good stead for a possible hike later in the year.
A handful of producers have already announced plans to raise prices by 5-8% in September. Suppliers expect the market to tighten once the latest capacity closures begin to impact the supply pipeline.
Burgo Group announces price increase on fine papers
Burgo Group announced a price increase for its uncoated and coated fine papers. Following the already implemented rises in office papers, uncoated grades will go up on September 3rd about 5% due to higher costs and strong market
demand. Coated woodfree both rolls and sheets will be increased 5% - 7% in Europe during the same month.
demand. Coated woodfree both rolls and sheets will be increased 5% - 7% in Europe during the same month.
Bowater 's Dalhousie newsprint mill in Canada prepares for layoffs
Bowater told local news outlets that the company is preparing to announce layoffs at its two-machine 240,000 tons/yr
Dalhousie, NB, mill in July as part of its ongoing effort to reduce costs. An official cited the weak North American market for newsprint and strong Canadian dollar for the need to cut staff and production.
Japanese producers Oji and Mitsui Paper owned a 33% interest in Dalhousie until late last year when Bowater paid $2.6 million for their stake and acquired 100% ownership of the mill.
Dalhousie, NB, mill in July as part of its ongoing effort to reduce costs. An official cited the weak North American market for newsprint and strong Canadian dollar for the need to cut staff and production.
Japanese producers Oji and Mitsui Paper owned a 33% interest in Dalhousie until late last year when Bowater paid $2.6 million for their stake and acquired 100% ownership of the mill.
Wausau introduces new sheet
Wausau Paper just added Exact Ice Natural to its line of bright white grades. Exact Ice is available in 60lbs and 70lbs text as well as 65lbs and 80lbs cover weight. This grade is guaranteed to run both Laser and Ink-Jet. Paper.com has this grade and all the other popular Wausau products available and ready for immediate shipment.
USA Tissue usage now Declining
Although demand continues to grow in USA for paper tissue products, it is at a declining rate. Penetration in USA is close to 100% for tissue, but efficiencies in dispensing has reduced the per use consumption. Also, improvements in absorptive capabilities mean fewer sheets are needed per spill.
Release Liners for Pressure Sensitive Grades
The release liner (the ‘peel away’ material of the bottom to the ‘sticky’ label) market growth in North America and Europe is just above 4% while markets like Asia are up nearly 10% and South America is up 12%. Most release liners today are made of paper that has been coated with silicone and are either 2.5 mil or 3.2 mil. Paper.com has thousands of pressure sensitive labels from all the major producers. All on quality release liners.
xpedx enters Canadian market
xpedx (Loveland, OH) plans to start operations in Canada this August with a new Canadian national headquarters, a 150,000-sq.-ft. distribution center and two new xpedx Paper & Graphics stores serving the greater Toronto area.
Tuesday, June 12, 2007
Paper versus Plastic
Plastic is once again expected to increase is share of the market to 53% (in pounds) in 2010. However, this understates plastic’s true share, since less plastic is required than paper given it’s lighter weight.
The plastic market share will expand at a slower rate going forward, estimated at 3% per year. Highest growth markets for plastics are pet food applications, frozen foods, fruit beverages, and detergent markets.
Paper for packaging for 2005 was 11,830million tons estimated to grow to 12,030million tons for 2010; while plastic was 11,790million tons in 2005 growing to 13,630million tons in 2010.
The plastic market share will expand at a slower rate going forward, estimated at 3% per year. Highest growth markets for plastics are pet food applications, frozen foods, fruit beverages, and detergent markets.
Paper for packaging for 2005 was 11,830million tons estimated to grow to 12,030million tons for 2010; while plastic was 11,790million tons in 2005 growing to 13,630million tons in 2010.
Marketing Budgets Mixed for 2007
Web based marketing budgets are forecasted to be down for 2007 and Free Standing Inserts (FSI) up. FSI are those printed supplements found in the Sunday newspapers. Experts report that 2007 marketing budgets will only allow for 16% allocated to online marketing – this includes email, internet ads and online media spending. This is a big drop from the 23% share online marketing enjoyed as recently as 2006. We should note that overall marketing budgets for 2007 were forecasted to be cut in total by 11% from 2006.
Judgment is still out comparing “e-mail to p-mail”. The US Postal service has recently witnessed an improvement in bulk mail. Most experts agree that a combination of electronic advertising and print works best. Certainly, the past growth of online marketing had eaten into paper demand.
Paper.com, one of the largest web based marketer of paper in the world, exclusively promotes its products online.
Judgment is still out comparing “e-mail to p-mail”. The US Postal service has recently witnessed an improvement in bulk mail. Most experts agree that a combination of electronic advertising and print works best. Certainly, the past growth of online marketing had eaten into paper demand.
Paper.com, one of the largest web based marketer of paper in the world, exclusively promotes its products online.
Sunday, June 10, 2007
Newspapers enjoy Circulation Boost in Internet Age
In past, we have been exclusively reporting on USA Newspaper reading and consumption declines. However, Newspapers from around the world witnessed nearly a 2.5% increase in circulation in 2006 and growth in advertising revenue despite the raise in digital media. Sales have increased 9.5% in last 5 years while advertising revenues in paid dailies rose almost 4% according to World Association Newspapers (WAN).
When adding free dailies into the mix, global distribution grew slightly over 4.5% last year. North American is reported to be the only continent to show a decline in newspaper sales – having dropped 1.9% last year and over 5% in the last five years.
It was reported that over 515 million people in the world buy a newspaper every day with average readership estimated at over 1.4 billion people a day. China is the biggest newspaper market with almost 100 million copies sold daily, followed by India (88 million); USA (52.3 million); and Germany (21million).
When adding free dailies into the mix, global distribution grew slightly over 4.5% last year. North American is reported to be the only continent to show a decline in newspaper sales – having dropped 1.9% last year and over 5% in the last five years.
It was reported that over 515 million people in the world buy a newspaper every day with average readership estimated at over 1.4 billion people a day. China is the biggest newspaper market with almost 100 million copies sold daily, followed by India (88 million); USA (52.3 million); and Germany (21million).
Mohawk Continues to Lead Environmental Effort
Mohawk recently announced it would increase its purchase of wind energy electricity from 45million kWh to 60million kWh annually. This is an increase of 60% of all the energy in the consumption Mohawk uses in their production of paper. Mohawk promotes an entire line of products manufactured by non-polluting; wind energy electric produced from windmills in upstate New York and Pennsylvania. Mohawk’s division, Beckett Paper, in Ohio, recently introduced a grade line called Beckett Concept – made with ‘carbon neutral’, which means the grade is made 100% with renewal energy.
This grade, and many other environmentally friendly products, can be all found in the Environmental Store at Paper.com. Paper.com now has nearly 40,000 items in stock and ready for immediate shipment.
This grade, and many other environmentally friendly products, can be all found in the Environmental Store at Paper.com. Paper.com now has nearly 40,000 items in stock and ready for immediate shipment.
Appleton’s Xero / Form II Carbonless
Appleton continues to expand its product offerings of carbonless paper. The NCR Paper Xero brand is specially formulated for printing forms using high speed digital imaging equipment. Xero Form II is available in a wide range of sizes and colors. In addition, a print-side identifier on the ream edge reduces waste by eliminating paper loading errors.
This grade, and many other carbonless products, can be all found in the Office Store at Paper.com. Paper.com now has nearly 40,000 items in stock and ready for immediate shipment.
This grade, and many other carbonless products, can be all found in the Office Store at Paper.com. Paper.com now has nearly 40,000 items in stock and ready for immediate shipment.
Domtar Introduces Environmental Friendly Grade
Domtar Corporation now offers an extensive line of high quality environmentally friendly responsible papers called EarthChoice. The fibers used in this line are from forests that have been certified by Forest Stewardship Council and include post-consumer recycled pulp. Domtar’s EarthChoice is the only line of paper that is supported by Rainforest Alliance, WWF-Canada, and Forest Ethics.
This grade, and many other environmentally friendly products, can be all found in the Environmental Store at Paper.com. Paper.com now has nearly 40,000 items in stock and ready for immediate shipment.
This grade, and many other environmentally friendly products, can be all found in the Environmental Store at Paper.com. Paper.com now has nearly 40,000 items in stock and ready for immediate shipment.
Manufacturing Edges Higher
U.S. manufacturing grew more rapidly last month as factory managers restocked depleted inventories. The Institute for Supply Management said its index of national factory activity rose to 55.0 last month from 54.7 in April. Wall Street economists had put the number at 54.0, according to a Reuters poll. A reading above 50 denotes growth. The paper industry typically tracks along the same pace as this index.
St. Francisville Mill Shut could revive US Coated Paper Markets
US paper analysts say Tembec's plan to indefinitely idle its 325,000 tons/yr St. Francisville, LA, coated paper mill next month
is positive for the sector and for major North American producers like NewPage, Stora Enso, Sappi, Verso and Bowater.
The facility is classified as a coated free sheet producer (CFS) because the recent replacement of its groundwood pulp line with a Kraft fiber line last year qualifies the product as coated free sheet. The capacity of the
mill's three machines represents 6.6% of US coated free sheet capacity, or 6.4% of coated groundwood production.
The pending capacity closure, together with countervailing duties and anti-dumping duties on US imports of Asian coated paper, could end recent weakness in coated paper markets and precipitate a potentially steep upturn
in the second half of the year, according to Lehman Bros. analyst Peter Ruschmeier.
is positive for the sector and for major North American producers like NewPage, Stora Enso, Sappi, Verso and Bowater.
The facility is classified as a coated free sheet producer (CFS) because the recent replacement of its groundwood pulp line with a Kraft fiber line last year qualifies the product as coated free sheet. The capacity of the
mill's three machines represents 6.6% of US coated free sheet capacity, or 6.4% of coated groundwood production.
The pending capacity closure, together with countervailing duties and anti-dumping duties on US imports of Asian coated paper, could end recent weakness in coated paper markets and precipitate a potentially steep upturn
in the second half of the year, according to Lehman Bros. analyst Peter Ruschmeier.
UPM announces Shutdown at its Miramichi Mill
UPM will close its Miramichi mill operations in August for up to one year. The paper mill is scheduled to close late in
August for 9 to 12 months. The Miramichi mill has two machines, producing lightweight coated paper,
with an annual capacity of 450,000 tonnes. Despite best efforts, Miramichihas not been able to turn its exports to the US profitable. The mill issuffering from unprecedented strength of the Canadian dollar. Also, marketprices for the coated magazine paper have been decreasing in North America.Demand for magazine grades in North America has been stable, but globally,there continues to be overcapacity in magazine paper, suppressing the salesprice.
In Europe, UPM has permanently ceased production of 530,000 tonnes ofcoated magazine paper during 2006-2007 to reduce the structuralovercapacity and improve profitability of the business. The Voikkaa mill inFinland was permanently closed and a production line in Jämsänkoski,Finland, was converted to another business area. UPM also closed 150,000tonnes of coated fine paper capacity at its Kymi mill, Finland last year."UPM's target is to improve the long-term profitability of the coated paper business. Paper.com has many of the major domestic and foriegn papers on their website.
August for 9 to 12 months. The Miramichi mill has two machines, producing lightweight coated paper,
with an annual capacity of 450,000 tonnes. Despite best efforts, Miramichihas not been able to turn its exports to the US profitable. The mill issuffering from unprecedented strength of the Canadian dollar. Also, marketprices for the coated magazine paper have been decreasing in North America.Demand for magazine grades in North America has been stable, but globally,there continues to be overcapacity in magazine paper, suppressing the salesprice.
In Europe, UPM has permanently ceased production of 530,000 tonnes ofcoated magazine paper during 2006-2007 to reduce the structuralovercapacity and improve profitability of the business. The Voikkaa mill inFinland was permanently closed and a production line in Jämsänkoski,Finland, was converted to another business area. UPM also closed 150,000tonnes of coated fine paper capacity at its Kymi mill, Finland last year."UPM's target is to improve the long-term profitability of the coated paper business. Paper.com has many of the major domestic and foriegn papers on their website.
Wednesday, May 30, 2007
Research Reveals Young Adults Read More Magazines, Not Less
MediaDailyNews - At a time when many assume that younger, tech-savvy people are turning their backs on print media, a highly regarded researcher has come up with evidence that young adults actually read more consumer magazines than older folks. The discovery is the result of new methodological research developed by McPheters & Co. to identify better ways of collecting information on the household incomes of magazine readers. "While analyzing data from the new test, it became apparent that younger readers reported reading more magazines than older readers," the company said.
Wood pulp near 22-year highs
North American wood pulp prices are closing in on their previous peaks set in the spring of 1995. Parsons & Whittemore, of Rye Brook, N.Y., plans to boost sales prices by $20/metric ton to $705 in June for southern bleached hardwood kraft (SBHK) pulp. Meanwhile, Tembec of Montreal and Pope & Talbot of Portland, Ore., have announced a $20 price increase to $830 for their northern bleached softwood (NBSK) grades.
Although a bit softer than USA market, hardwood markets are benefiting from reduced wood supply in Northern Europe. In
Europe, a strong Euro has allowed NA pulp producers to raise their export prices with little resistance from customers. Seasonal maintenance downtime has led to reduced inventories while some producers are speculating about a potential price hike in June.
Certain paper products are in strong demand so production of softwood and hardwood pulp has held fairly strong. One reason is that past lumber mill shutdowns have created a shortage of softwood pulp in some regions. And, as papermakers turn to more hardwood pulp for mixing, those prices also firm.
Although a bit softer than USA market, hardwood markets are benefiting from reduced wood supply in Northern Europe. In
Europe, a strong Euro has allowed NA pulp producers to raise their export prices with little resistance from customers. Seasonal maintenance downtime has led to reduced inventories while some producers are speculating about a potential price hike in June.
Certain paper products are in strong demand so production of softwood and hardwood pulp has held fairly strong. One reason is that past lumber mill shutdowns have created a shortage of softwood pulp in some regions. And, as papermakers turn to more hardwood pulp for mixing, those prices also firm.
Coated Market Appears Strong
Producers of coated Freesheet Papers have announced $50/ton price hikes effective immediately. The biggest driver is duties on Asian imports, which are limiting supply. Preliminary countervailing duties on Chinese, Indonesian and Korean imports are 18%, 21% and 2%, respectively. The next step is a Commerce Department ruling on antidumping duties, due out on
May 29th. Domestic shipments rose 10% in February ahead of possible duties on Asian imports. The coated Market has plateaued over the past six months.
May 29th. Domestic shipments rose 10% in February ahead of possible duties on Asian imports. The coated Market has plateaued over the past six months.
Some Paper markets are showing signs of a rebound in demand.
Demand in most markets has fallen from last year’s figures. The supply reductions from shuttered equipment and a weak US Dollar have held pricing relatively steady for Printing and Writing grades.
Virtually all corrugated box producers are reporting stronger volumes. Demand is strong in most offshore markets, particularly in Asian and Europe. Strong overseas demand coupled with a weak US dollar is clearly assisting many domestic paper mills
Virtually all corrugated box producers are reporting stronger volumes. Demand is strong in most offshore markets, particularly in Asian and Europe. Strong overseas demand coupled with a weak US dollar is clearly assisting many domestic paper mills
Forestweb May Pulp and Paper Price Indices Reflect Price Activity in Cut
Forestweb's monthly indices for pulp and paper reflect the price activity in pulp, packaging, and printing/writing
markets since the release of the prior report in April. The May indices indicate prices for communication papers rose, pulp and packaging remained steady, and publishing papers declined.
Forestweb's North American Communications Papers Index, static for the prior three months, increased 1.93%, reflecting rising prices in the cutsize free sheet market. The North American Publishing Papers Index declined for the tenth consecutive month indicating continuing price erosion in the mechanical publishing paper sector. Forestweb's North American Packaging Index remained unchanged for the fifth consecutive month. The North American Pulp Index was unchanged from April after new softwood prices were implemented earlier and hardwood prices were mostly steady.
markets since the release of the prior report in April. The May indices indicate prices for communication papers rose, pulp and packaging remained steady, and publishing papers declined.
Forestweb's North American Communications Papers Index, static for the prior three months, increased 1.93%, reflecting rising prices in the cutsize free sheet market. The North American Publishing Papers Index declined for the tenth consecutive month indicating continuing price erosion in the mechanical publishing paper sector. Forestweb's North American Packaging Index remained unchanged for the fifth consecutive month. The North American Pulp Index was unchanged from April after new softwood prices were implemented earlier and hardwood prices were mostly steady.
International Paper stops Paper Production at Pensacola mill
As reported in past, International Paper has finally stopped manufacturing uncoated freesheet (UFS) on PM No. 5 at its Cantonment mill in Pensacola, Fl. last week, and has begun the process of converting the 350,000 tons/yr machine
to lightweight unbleached kraft linerboard. The conversion is expected to last throughout the summer and should be
completed by the third quarter.
to lightweight unbleached kraft linerboard. The conversion is expected to last throughout the summer and should be
completed by the third quarter.
Monday, April 30, 2007
Top North American Producers of Uncoated Freesheet
Domtar 5million tons 33.7 market Share
International Paper 3.7million tons 25% Market Share
Boise Cascade 1.55million tons 10.5% Market Share
Glatfelter .5million tons 3.5% Market Share
Fraser Paper .45million tons 3% Market Share
Wausau Paper .4million tons 2.5% Market Share
Blue Ridge .3million tons 2% Market Share
Finch Pruyn .25million tons 1.5% Market Share
Cascades .15million tons 1% Market Share
Note: Paper.com markets all of these mill’s papers
International Paper 3.7million tons 25% Market Share
Boise Cascade 1.55million tons 10.5% Market Share
Glatfelter .5million tons 3.5% Market Share
Fraser Paper .45million tons 3% Market Share
Wausau Paper .4million tons 2.5% Market Share
Blue Ridge .3million tons 2% Market Share
Finch Pruyn .25million tons 1.5% Market Share
Cascades .15million tons 1% Market Share
Note: Paper.com markets all of these mill’s papers
Uncoated Freesheet Market in USA
From time to time, we offer a BLOG on defining a market-
The Uncoated Woodfree paper market is divided into three major product groups – reprographic (Copy papers), printing and converting (offset, envelope, forms, and tablet) and value added (text, cover and technical). The largest segment is the reprographics – 41.5% followed by offset 24%, envelope 11% forms 9% carbonless 5% tablet 2% text and cover 2.5% and technical 2%.
In the USA the commodity grades – reprographic and printing / converting – are generally produced on large paper machines and the plant produces its own pulp. The smaller, older mills that produce the value added grades usually do not produce pulp (rather they buy it in the open market) and are located in the Northeast and upper Midwest.
The market, as a whole has decreased from its peak in 1999 of nearly 15million tons to current 2006 of 12.5million tons – or a decline of 15.5% or 2.3million tons. The decrease is primarily attributed to cannibalism from electronic information replacing paper. We forecast an additional decrease this year with International Paper shuttering equipment as well as others such as Domtar continuing to rationalize production.
Although USA is now witnessing additional imported papers (rose 24% to 525,000 last year – 4% of USA capacity) with the reduction of USA capacity – we feel pricing could begin to increase during 2007.
Paper.com sells all major mill’s uncoated papers – from copy papers to text and cover.
The Uncoated Woodfree paper market is divided into three major product groups – reprographic (Copy papers), printing and converting (offset, envelope, forms, and tablet) and value added (text, cover and technical). The largest segment is the reprographics – 41.5% followed by offset 24%, envelope 11% forms 9% carbonless 5% tablet 2% text and cover 2.5% and technical 2%.
In the USA the commodity grades – reprographic and printing / converting – are generally produced on large paper machines and the plant produces its own pulp. The smaller, older mills that produce the value added grades usually do not produce pulp (rather they buy it in the open market) and are located in the Northeast and upper Midwest.
The market, as a whole has decreased from its peak in 1999 of nearly 15million tons to current 2006 of 12.5million tons – or a decline of 15.5% or 2.3million tons. The decrease is primarily attributed to cannibalism from electronic information replacing paper. We forecast an additional decrease this year with International Paper shuttering equipment as well as others such as Domtar continuing to rationalize production.
Although USA is now witnessing additional imported papers (rose 24% to 525,000 last year – 4% of USA capacity) with the reduction of USA capacity – we feel pricing could begin to increase during 2007.
Paper.com sells all major mill’s uncoated papers – from copy papers to text and cover.
Employment Levels for Printers on Decline
PIA/GATC Print Market Tracking reported US Printing industry lost more than 3000 jobs last year. This was a result of more than 980 plants that closed down in 2006.
Container Board Producers announce Price Increase
Packaging Corporation of America announced a $40/ton containerboard hike, effective May 15th. We would not be surprised to see other industry players to make similar announcements in the coming days. Although a $40/ton winter price
hike floundered on the back of weak box demand, global containerboard markets are very tight (and prices are rising, often
well above domestic prices) and we have received several reports in the past week that domestic box volumes are strengthening & mill backlogs are tightening. Containerboard producers are also struggling under the weight of increased raw material costs.
hike floundered on the back of weak box demand, global containerboard markets are very tight (and prices are rising, often
well above domestic prices) and we have received several reports in the past week that domestic box volumes are strengthening & mill backlogs are tightening. Containerboard producers are also struggling under the weight of increased raw material costs.
Mohawk Continues to Grow with Text and Cover
Since its purchase of International Papers fine papers division in 2005, Mohawk’s sales have reached $300 million in the first
quarter, nearly tripling sales from before the International Paper deal. Since 2005, Mohawk has more than doubled its sales staff from 26 to 59 people. Paper.com markets these products to companies that use Mohawk to publish their annual reports, books, catalogs, magazines, posters and letterheads.
quarter, nearly tripling sales from before the International Paper deal. Since 2005, Mohawk has more than doubled its sales staff from 26 to 59 people. Paper.com markets these products to companies that use Mohawk to publish their annual reports, books, catalogs, magazines, posters and letterheads.
Notes from PriceWaterhouseCoopers Meeting of Paper Industry
Global forest products sector has strong Merger and Acquisitions year in 2006; there were over 280 mergers and acquisitions (M&A) with a value of nearly US$26 billion in the global forest, paper and fiber-based packaging sector, according to PricewaterhouseCoopers (PwC).
North America remained at the forefront of forest, paper and packaging M&A activity, with a two-thirds share of deal values in 2006. The second largest forest products company deal in 2006 occurred in Canada - Domtar Inc’s acquisition of Weyerhaeuser Company’s fine paper business and related assets for US$ 3.3 billion. Cascades Inc acquisition of 50% of Norampac Inc. for US$476 million and West Fraser Timber Co. Ltd purchase of 13 lumber mills from International Paper Co. for US$325 million ranked among the ten largest deals in North America.
The average deal size in 2006 increased to US$169 million from US$90 million in 2003, a good indicator of growing and recovering deal confidence over the four year period. The momentum behind deal activity looks set to
continue with opportunities still existing for consolidation as the transformation of traditional value chains in forest, paper and packaging continues.
The global forest, paper and packaging industry continued to face challenges in 2006 foreign exchange fluctuations, increased energy and transportation costs, waning demand and the impact of emerging markets on
global competition, said Craig Campbell, partner, PwC Global Forest, Paper and Packaging practice, based in Vancouver. In spite of these challenges, M&A activity has risen, with companies selling off underperforming and non-core businesses. The leading players are also seeking to extend there reach globally.
Campbell added that the forest, paper and packaging industry remains fragmented regionally and globally. This fragmentation is expected to drive more M&A activity going forward.
Highlights of recent deal activity include:
> Deals involving pulp and paper production dominate, having risen a total of over four-fold from US$3.2billion in 2003 to US$13.6billion in 2006. Forestland and forestry was the second most active sector, with deals totaling US$ 15.7billion in the last four years.
> Emerging markets are active with M&A transactions in the sector. Deals have recently taken place in Brazil, China, India, Malaysia, Mexico, and Poland and Russia.
> The top dealmaker in 2006 was International Paper, which raised US$11 billion in disposals and was behind 40% of the global deal flow, featuring in five of the ten biggest deals.
> Financial investors such as private equity investors and Timber Investment Management Organizations (TIMO) have made their mark on the sector and were involved in almost 50%, or US$12 billion, of deals in 2006.
A separate, recent PwC survey of forest, paper and packaging CEOs found that M&A activity in the global sector appears set to continue, with 27% planning a cross-border merger or acquisition. The fundamentals for deal activity in the forestry, paper and packaging industry remain strong, with a sound economic environment, low interest rates and plenty of liquidity? most notably with private equity. Almost US$9 billion of deals were reported in the first three months of this year, including Brookfield Asset Management’s acquisition of Longview Fiber and the proposed Bowater - Abitibi Consolidated deal.
North America will likely continue as a center of M&A activity in the forest products sector, where private equity is expected to remain a pivotal player. Private equity and other non-traditional investors will continue to be active dealmakers as the global sector restructures. Although unlikely to be a driver of major deal flow in the short-term, the moves towards greater
renewable energy (including biofuels) from woody biomass, will drive future deals. Co-ventures between forest and paper companies and both new and established energy players is also expected.
North America remained at the forefront of forest, paper and packaging M&A activity, with a two-thirds share of deal values in 2006. The second largest forest products company deal in 2006 occurred in Canada - Domtar Inc’s acquisition of Weyerhaeuser Company’s fine paper business and related assets for US$ 3.3 billion. Cascades Inc acquisition of 50% of Norampac Inc. for US$476 million and West Fraser Timber Co. Ltd purchase of 13 lumber mills from International Paper Co. for US$325 million ranked among the ten largest deals in North America.
The average deal size in 2006 increased to US$169 million from US$90 million in 2003, a good indicator of growing and recovering deal confidence over the four year period. The momentum behind deal activity looks set to
continue with opportunities still existing for consolidation as the transformation of traditional value chains in forest, paper and packaging continues.
The global forest, paper and packaging industry continued to face challenges in 2006 foreign exchange fluctuations, increased energy and transportation costs, waning demand and the impact of emerging markets on
global competition, said Craig Campbell, partner, PwC Global Forest, Paper and Packaging practice, based in Vancouver. In spite of these challenges, M&A activity has risen, with companies selling off underperforming and non-core businesses. The leading players are also seeking to extend there reach globally.
Campbell added that the forest, paper and packaging industry remains fragmented regionally and globally. This fragmentation is expected to drive more M&A activity going forward.
Highlights of recent deal activity include:
> Deals involving pulp and paper production dominate, having risen a total of over four-fold from US$3.2billion in 2003 to US$13.6billion in 2006. Forestland and forestry was the second most active sector, with deals totaling US$ 15.7billion in the last four years.
> Emerging markets are active with M&A transactions in the sector. Deals have recently taken place in Brazil, China, India, Malaysia, Mexico, and Poland and Russia.
> The top dealmaker in 2006 was International Paper, which raised US$11 billion in disposals and was behind 40% of the global deal flow, featuring in five of the ten biggest deals.
> Financial investors such as private equity investors and Timber Investment Management Organizations (TIMO) have made their mark on the sector and were involved in almost 50%, or US$12 billion, of deals in 2006.
A separate, recent PwC survey of forest, paper and packaging CEOs found that M&A activity in the global sector appears set to continue, with 27% planning a cross-border merger or acquisition. The fundamentals for deal activity in the forestry, paper and packaging industry remain strong, with a sound economic environment, low interest rates and plenty of liquidity? most notably with private equity. Almost US$9 billion of deals were reported in the first three months of this year, including Brookfield Asset Management’s acquisition of Longview Fiber and the proposed Bowater - Abitibi Consolidated deal.
North America will likely continue as a center of M&A activity in the forest products sector, where private equity is expected to remain a pivotal player. Private equity and other non-traditional investors will continue to be active dealmakers as the global sector restructures. Although unlikely to be a driver of major deal flow in the short-term, the moves towards greater
renewable energy (including biofuels) from woody biomass, will drive future deals. Co-ventures between forest and paper companies and both new and established energy players is also expected.
Fraser Decides against a Mill Purchase
Fraser Papers Inc. announced that,after discussions with its shareholders, it is withdrawing the proposal to acquire the Katahdin Paper Company from Brookfield Asset Management Inc.
Friday, April 20, 2007
Copy Paper Price Increase Will Happen
Copy Paper – also referred to as Cut Size - will increase in price by $60/ton in May. International paper, Domtar, Boise, and Georgia Pacific have all informed end users of this new price level. This will place the price of 20lbs bond copy paper, 92 brightness, to $980-1000/ton (compare to transaction pricing of $880-$900/ton at this time last year.
Pulp Producers remain Firm on Increase
NBSK pulp producers remain firm on recent announcement of increasing fiber to $810/ton. This brings the list price closer to the 11 year high of $860/ton – recorded in January 1996. SBSK ( Southern Bleached Hardwood Kraft) pulp will increase $10 to $770/ton.
FiberMark Paper attempts to reduce Employee Compensation
FiberMark, a specialty manufacturer of paper grades, owned by Greenwich, CT based SilverPoint Capital, is negotiating with its labor base to cut wages and benefits. The union workers have been working without a contract since April 1.
We understand the company has proposed wage reductions of $5-6/hour. The range of salaries had been $15.75 to $20.55 might be cut to $10.80 to $19.30.
We understand the company has proposed wage reductions of $5-6/hour. The range of salaries had been $15.75 to $20.55 might be cut to $10.80 to $19.30.
SMART Papers secures new US$45M credit line
SMART Papers announced it has secured $45 million in new financing from Wells Fargo Foothill, part of Wells Fargo
& Company.
"This new financing provides SMART Papers with an even-stronger financial platform to expand sales, manufacturing and distribution of our products," said SMART Papers President and COO Dan Maheu. "We're pleased to have Wells Fargo Foothill as a financial partner along with our owners, Plainfield Asset Management of Greenwich, Connecticut."
& Company.
"This new financing provides SMART Papers with an even-stronger financial platform to expand sales, manufacturing and distribution of our products," said SMART Papers President and COO Dan Maheu. "We're pleased to have Wells Fargo Foothill as a financial partner along with our owners, Plainfield Asset Management of Greenwich, Connecticut."
Thursday, April 12, 2007
Wausau Paper Increases prices of paper
As forecasted, Wausau has joined Cranes, Mohawk and Neenah in a recent announcement to increase the price of all the Text and Cover products. This increase is effective on May 7, 2007 and it includes all the white, natural and colors.
Paper.com markets all the Wausau papers including the popular Astrobrites.
Paper.com markets all the Wausau papers including the popular Astrobrites.
Uncoated Rally
The real issues over the next 2 quarters are supply reductions as well as potential shifts in imported paper. In Q2, International Paper will permanently cease production of an uncoated machine on its 350,000/tpy machine in Pensacola, FL. In Q3, Georgia-Pacific will permanently shutter a 110,000/tpy machine in Wauna, OR. Soon, we expect Domtar to
announce its own “post-Weyerhaeuser” capacity moves. Boise's recent conversion of a 240,000/tpy uncoated free machine at Wallula, WA to release liner will see the machine gradually migrate production out of Uncoated Papers.
Paper.com has papers from International Paper, Georgia Pacific, Boise and all the major producers.
announce its own “post-Weyerhaeuser” capacity moves. Boise's recent conversion of a 240,000/tpy uncoated free machine at Wallula, WA to release liner will see the machine gradually migrate production out of Uncoated Papers.
Paper.com has papers from International Paper, Georgia Pacific, Boise and all the major producers.
Printers Confirm Operating Cost breakdown
PIA/GATF survey confirmed cost breakdown for Operating Expenses-
Energy/Utility 7.4%
Health Benefits 7%
Paper 4.5%
Prepress Consumables 3.75%
Wages / Salaries 3.75%
Property / Casualty Insurance 3.75
Energy/Utility 7.4%
Health Benefits 7%
Paper 4.5%
Prepress Consumables 3.75%
Wages / Salaries 3.75%
Property / Casualty Insurance 3.75
Paper Markets at a Glance
Paper Markets at a Glance
2006 year end
Uncoated Freesheet
Total shipments 11,996,000 tons
Operating Rates 93%
Imports 552,000 tons
Total Demand 12,211,000 tons
Total Printing and Writing
Total Shipments 27,316,000 tons
Operating Rates 92%
Imports 3,767,000
Total Demand 30,143,000
2006 year end
Uncoated Freesheet
Total shipments 11,996,000 tons
Operating Rates 93%
Imports 552,000 tons
Total Demand 12,211,000 tons
Total Printing and Writing
Total Shipments 27,316,000 tons
Operating Rates 92%
Imports 3,767,000
Total Demand 30,143,000
Uncoated Freesheet Market update this week
Most are forecasting the uncoated paper market to improve and prices to increase; however, there still remains a population that thinks differently.
Industry consolidation and closing over 1.5million tons of production since 2005 are leading to a stronger market. Limited growth in capacity (or demand) is forecasted through this year. Poor financial results, sluggish demand, over capacity, high energy, transportation and pulp costs have all plagued the uncoated market. American uncoated freesheet demand declined from its high in 2000. Demand declined 1.5% in 2006 (vs. 2005) falling to 12 million tons while imports enjoyed a 24% increase to 550,000 tons. Imports only account for 5% of USA demand, however, they continue to cannibalize domestic producer’s output. Further concerns may result from the postal increase – which will hurt direct mail campaigns.
Paper.com has all your uncoated papers - from commodity grades to very exotic handmade papers. The site now has over 35,000 items.
Industry consolidation and closing over 1.5million tons of production since 2005 are leading to a stronger market. Limited growth in capacity (or demand) is forecasted through this year. Poor financial results, sluggish demand, over capacity, high energy, transportation and pulp costs have all plagued the uncoated market. American uncoated freesheet demand declined from its high in 2000. Demand declined 1.5% in 2006 (vs. 2005) falling to 12 million tons while imports enjoyed a 24% increase to 550,000 tons. Imports only account for 5% of USA demand, however, they continue to cannibalize domestic producer’s output. Further concerns may result from the postal increase – which will hurt direct mail campaigns.
Paper.com has all your uncoated papers - from commodity grades to very exotic handmade papers. The site now has over 35,000 items.
Domtar idles paper machine until May 21
Domtar company officials said an uncoated paper machine in its Maine facility would be shut down from April 16 until May 21 because of unfavorable market conditions.
The company already temporarily has shut down its the cut-size operation — the equipment that turns large rolls of paper into 8½-by-11-inch sheets The shutdown will affect about 100 employees. The company has about 500 workers.
The rest of the mill — those machines that produce pulp — will continue to operate.
The mill in Maine began in 1906 as part of St. Croix Paper Co. The Atlanta-based Georgia-Pacific Corp. bought it in 1963 and sold it to Domtar in 2000. The mill, with its aging paper machine, for years has had to compete with international mills that have come on line with new and faster equipment.
Last year the Montreal-based Domtar reached an agreement with Weyerhaeuser Co. to combine its fine-paper business with the Canadian papermaker in a deal that is valued at around $3.3 billion.
Domtar is the third-largest producer of uncoated, free-sheet paper in North America. It is also a leading manufacturer of business papers, commercial printing and publication papers, and technical and specialty papers.
Paper.com has all the Domtar and Weyerhaeuser paper grades, in stock and ready for immediate delivery.
The company already temporarily has shut down its the cut-size operation — the equipment that turns large rolls of paper into 8½-by-11-inch sheets The shutdown will affect about 100 employees. The company has about 500 workers.
The rest of the mill — those machines that produce pulp — will continue to operate.
The mill in Maine began in 1906 as part of St. Croix Paper Co. The Atlanta-based Georgia-Pacific Corp. bought it in 1963 and sold it to Domtar in 2000. The mill, with its aging paper machine, for years has had to compete with international mills that have come on line with new and faster equipment.
Last year the Montreal-based Domtar reached an agreement with Weyerhaeuser Co. to combine its fine-paper business with the Canadian papermaker in a deal that is valued at around $3.3 billion.
Domtar is the third-largest producer of uncoated, free-sheet paper in North America. It is also a leading manufacturer of business papers, commercial printing and publication papers, and technical and specialty papers.
Paper.com has all the Domtar and Weyerhaeuser paper grades, in stock and ready for immediate delivery.
47th Annual Survey Of Paper, Paperboard, And Pulp Capacity
The American Forest & Paper Association (AF&PA) released its 47th Annual Survey of Paper, Paperboard, and Pulp Capacity recently in New York, NY. The Survey indicates that U.S. paper and paperboard capacity continued to edge lower in 2006, declining 1.6% to 97.7 million short tons. U.S. paper and paperboard capacity contracted 4.7% in the period from 2000 through 2006 or at an average annual rate of 0.7%. The Survey indicates that paper and paperboard capacity will decline another 0.7% in 2007 and then re-expand nearly one percent during the subsequent two years – rising 0.7% in 2008 and 0.2% in 2009.
The Survey covers U.S. industry capacity plans for the years 2006 through 2009 for all paper, paperboard, and pulp grades. Industry total capacity by grade for all U.S. mills is included in the report.
The Survey covers U.S. industry capacity plans for the years 2006 through 2009 for all paper, paperboard, and pulp grades. Industry total capacity by grade for all U.S. mills is included in the report.
Fraser takes Down Time
Fraser Papers will temporarily shut its #6 Paper Machine which produces LWC ( used in magazines, catalogues and advertising inserts.). The machine produces 200 tons/day at its Madawaska, Maine Operation. Company management sited this decision was due to weak market conditions.
The company expects the shutdown to be two weeks in duration. Fraser Papers is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers.
The company expects the shutdown to be two weeks in duration. Fraser Papers is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers.
Thursday, April 05, 2007
Finland Produces Record Production of Paper
Finland reported a production of 14.1 million tons of paper and paperboard in 2006. Manufactures also reported a record 13 million tons of pulp was produced. These figures are 15% more than 2005.
Tuesday, April 03, 2007
Uncoated Business Papers Price Increase
International Paper has announced a $60/ton price hike on cutsize uncoated free sheet papers. The increase will take effect on May 3rd. Uncoated paper prices and demand have been rising in Europe, however, USA witnessed weaker than normal February demand. Price increases have also been announced in Asia. Permanent capacity closures by International Paper and Georgia Pacific will reduce US supply. Most Likely, other players to follow. Domtar, Boise and Georgia Pacific are the other key players in the market.
Paper.com has the widest assortment of uncoated business papers on the web - available and ready for immediate shipment.
Paper.com has the widest assortment of uncoated business papers on the web - available and ready for immediate shipment.
Monday, April 02, 2007
USA Announces Tariffs on Imports from Asia
USA will impose tariffs on Coated Paper from China, Indonesia, and Korea for Counter Vailing Duties (CVD). These duties will take effect immediately. This tariff affects coated free sheet grades only. The duties are set at 10-20% but could rise higher.
The level of imports into USA was 6.2% of Coated Free Sheet consumption in 2006 and were expected to rise in 2007. This is also positive for producers of uncoated producers such as Domtar and International Paper, since some coated producers running UFS should swing back to coated.
Current tariff for respective mills are as follows.
CHINA
Gold East 20.35%
Chenming 10.90%
All others 18.16%
INDONESIA
TK and PD 21.24%
all others 21.24%
KOREA
EN Paper 0.08%
Hansol 1.76%
Keysong 0.59%
Moorim 0.04%
all others 1.76%
The level of imports into USA was 6.2% of Coated Free Sheet consumption in 2006 and were expected to rise in 2007. This is also positive for producers of uncoated producers such as Domtar and International Paper, since some coated producers running UFS should swing back to coated.
Current tariff for respective mills are as follows.
CHINA
Gold East 20.35%
Chenming 10.90%
All others 18.16%
INDONESIA
TK and PD 21.24%
all others 21.24%
KOREA
EN Paper 0.08%
Hansol 1.76%
Keysong 0.59%
Moorim 0.04%
all others 1.76%
Harry Potter Book goes Recycle
The Children’s book publisher, Scholastic, will use recycled paper certified by the FSC in printing the seventh and final book in the Harry Potter series.
Come to Paper.com for all your recycled needs.
Come to Paper.com for all your recycled needs.
News from Europe Paper market
Copied off the international wire
In Europe: Demand for uncoated magazine paper is expected to ease after strong growth in 2006. Coated magazine paper demand improved in early 2007 and is expected to be moderately positive for the year. Modest demand
growth is expected for newsprint. Demand for uncoated fine paper remains good, particularly in Eastern Europe. Demand is healthy and strong order inflow is expected for coated fine paper and packaging boards. Demand for wood products is expected to be healthy in most markets. Contract negotiations for newsprint prices have been completed and prices increased by an average of 5% in Western Europe. Magazine paper prices have declined at the beginning of 2007 and may remain under pressure for non-contractual business. Further price increases are expected in uncoated fine paper, and increases are being negotiated in coated fine paper. Some moderate increases in packaging board prices are implemented. Some production curtailments are expected at Enocell Pulp Mill (part of Packaging Boards) in the second quarter of 2007 due to shortage of raw material. In wood products further product price movements are likely to reflect wood costs.
USA Market – as told through European wire
In North America: Demand for newsprint is expected to decline further. Demand for magazine paper, particularly coated magazine paper, remains weak due to seasonal reasons and underlying end-use weakness. Demand in coated fine paper is forecast to remain flat. Prices for publication papers are still declining. Coated fine paper reel prices are under pressure, but some price increases for sheet products are being negotiated.
Other Markets
In China, coated fine paper demand is expected to improve later in the spring and prices to firm up. In Latin America, modest growth in demand for coated magazine paper is anticipated, but downward price pressure is increasing. Operating cost inflation is forecast to be 2.0% to 2.5% higher in 2007 than 2006, primarily because of increased wood costs, including the impact of the Russian duties on wood.
In Europe: Demand for uncoated magazine paper is expected to ease after strong growth in 2006. Coated magazine paper demand improved in early 2007 and is expected to be moderately positive for the year. Modest demand
growth is expected for newsprint. Demand for uncoated fine paper remains good, particularly in Eastern Europe. Demand is healthy and strong order inflow is expected for coated fine paper and packaging boards. Demand for wood products is expected to be healthy in most markets. Contract negotiations for newsprint prices have been completed and prices increased by an average of 5% in Western Europe. Magazine paper prices have declined at the beginning of 2007 and may remain under pressure for non-contractual business. Further price increases are expected in uncoated fine paper, and increases are being negotiated in coated fine paper. Some moderate increases in packaging board prices are implemented. Some production curtailments are expected at Enocell Pulp Mill (part of Packaging Boards) in the second quarter of 2007 due to shortage of raw material. In wood products further product price movements are likely to reflect wood costs.
USA Market – as told through European wire
In North America: Demand for newsprint is expected to decline further. Demand for magazine paper, particularly coated magazine paper, remains weak due to seasonal reasons and underlying end-use weakness. Demand in coated fine paper is forecast to remain flat. Prices for publication papers are still declining. Coated fine paper reel prices are under pressure, but some price increases for sheet products are being negotiated.
Other Markets
In China, coated fine paper demand is expected to improve later in the spring and prices to firm up. In Latin America, modest growth in demand for coated magazine paper is anticipated, but downward price pressure is increasing. Operating cost inflation is forecast to be 2.0% to 2.5% higher in 2007 than 2006, primarily because of increased wood costs, including the impact of the Russian duties on wood.
Blue Ridge Paper's up for Sale
Blue Ridge Paper Products Inc announced that it is engaged in discussions with New Zealand-based The Rank Group regarding a potential sale. It is believed a sale of the company to The Rank Group could be positive for credit quality and assure financial stability for the mill.
Verso Paper reports 4Q06 loss of $6Million
Verso Paper Holdings LLC reported its results for the fourth quarter for business once owned by the Coated and Supercalendered Papers Division of International Paper Company, for the year ended December 31, 2006; siting challenges by on increase in costs of pulp, energy, raw materials
Highlights for the fourth quarter of 2006 include:
Revenues of $408.0 million in 2006 compared to $410.9 million during
the prior year period.
* Operating income of $21.9 million versus operating income of $11.8
million in the prior year period.
* Net loss of ($6.0) million for the quarter versus net income of
$4.7 million in the prior year period.
Revenues of $1,611.3 million in 2006 compared to $1,603.8 million
during the prior year.
* Operating income of $71.3 million versus operating income of $60.2
million for the prior year.
* Net income of $8.9 million compared to $27.6 million in 2005.
Paper.com has all the Verso grades available on a manufacturing basis.
Highlights for the fourth quarter of 2006 include:
Revenues of $408.0 million in 2006 compared to $410.9 million during
the prior year period.
* Operating income of $21.9 million versus operating income of $11.8
million in the prior year period.
* Net loss of ($6.0) million for the quarter versus net income of
$4.7 million in the prior year period.
Revenues of $1,611.3 million in 2006 compared to $1,603.8 million
during the prior year.
* Operating income of $71.3 million versus operating income of $60.2
million for the prior year.
* Net income of $8.9 million compared to $27.6 million in 2005.
Paper.com has all the Verso grades available on a manufacturing basis.
Time Inc. on the Block? Time Warner Says 'No'
Exported from - March 29, 2007, Folio - Long-time rumors that Time Warner may sell its publishing division came to a head this week when Forbes.com reported that news of possible sale of Time Inc. sent Time Warner shares up.
But a source told Folio: Although the future of Time Inc. was unclear, Time Warner officials have recently said they plan
to remain in the publishing business. Time Warner thinks publishing is a great business to be in and plans to stay there.
But a source told Folio: Although the future of Time Inc. was unclear, Time Warner officials have recently said they plan
to remain in the publishing business. Time Warner thinks publishing is a great business to be in and plans to stay there.
Coated Free Sheet Market
Most producers have announced $50-$60/ton hikes on lower grade coated free sheet for March. Rising pulp costs and capacity reductions are both helping to firm the market. However, the biggest domestic issue is duties on Asian imports. Preliminary countervailing duties on Chinese, Indonesian and Korean imports are 18%, 21% and 2%, respectively. The next step
is a Commerce Department ruling on antidumping duties, due out on May 29th. Domestic shipments rose 10% in February ahead of possible duties on Asian imports.
Paper.com has all the major producer's coated papers - available and ready for immediate shipment.
is a Commerce Department ruling on antidumping duties, due out on May 29th. Domestic shipments rose 10% in February ahead of possible duties on Asian imports.
Paper.com has all the major producer's coated papers - available and ready for immediate shipment.
Market Pulp
Softwood markets remain tight. Softwood inventory days of supply dropped from 27 in January to 25 in February. European producers announced $20/ton hikes in Europe for April, joining their USA counterparts, this increase has a good chance of going through. Expect hardwood markets to feel more impact from new Latin mills .
Finch - Another Paper Mill Sold
Atlas Paper Resources LLC, and other investors, to acquire Finch, Pruyn Paper mill. Atlas Holdings LLC is a holding company that operates Businesses in a number of industrial sectors, including the paper, packaging, wood products and steel industries.
Atlas Paper Resources will purchase all of the company's assets, including its manufacturing facilities in Glens Falls, N.Y., and its Adirondack forestland. Finch, Pruyn has the capacity to produce 250,000 tons per year of of premium uncoated paper for advertising materials, book publishing, and business office papers. The mill employs 850 works and has about 160,000 acres of land in the Adirondacks.
Paper.com carrys all the Finch, Pruyn products, all available and ready fo immediate shipment.
Atlas Paper Resources will purchase all of the company's assets, including its manufacturing facilities in Glens Falls, N.Y., and its Adirondack forestland. Finch, Pruyn has the capacity to produce 250,000 tons per year of of premium uncoated paper for advertising materials, book publishing, and business office papers. The mill employs 850 works and has about 160,000 acres of land in the Adirondacks.
Paper.com carrys all the Finch, Pruyn products, all available and ready fo immediate shipment.
Thunder Bay Paper Mill Sold
The Cascades Paper Mill, once called Provincial Papers and owned by Abitibi was sold to a private investment company called Thunder Bay Fine Papers. The mill has been closed since early 2006 and will take @35million to start back up. The mill made 170,000 tons per year of coated book papers.
Domtar Introduces Antimicrobial Paper
Domtar announced the introduction of antimicrobial paper. The sheet is coated with a silver compound that kills, most bacteria – as well as odors, fungus, mold and mildew. This will be sold as 8 ½ x 11” office paper for both inkjet and laser desktop copiers.
Georgia Pacific to take Down Time
Last week Georgia Pacific announced it will permanently shut down the 110,000 ton/yr uncoated Freesheet PM 4 in Wauna, OR. This mill produced offset rolls.
Come to Paper.com for all your Offset uncoated Freesheet demands.
Come to Paper.com for all your Offset uncoated Freesheet demands.
Postal Rates to increase – will hurt Paper Sales
The US Postal Service recently announced a rate increase for first class stamps by 5.1% effective May 14; and a rate hike for publication mailing such as magazines and catalogues for July 15.
The increase for publications is one more component to add to all the other recent cost increases printers have experienced. Energy, freight, fiber, chemicals, and now distribution costs. Most likely reducing paper consumption to save money.
The increase for publications is one more component to add to all the other recent cost increases printers have experienced. Energy, freight, fiber, chemicals, and now distribution costs. Most likely reducing paper consumption to save money.
Wednesday, March 28, 2007
Slow Down in Advertising for magazines slows Down Paper Sales
The number of advertising pages in all the major publications remains flat, or slightly on the decline. As a result, magazines are producing smaller magazines and thus less paper is consumed. This mainly effects the groundwood containing sheets.
Pulp Prices up yet again
Pulp prices are continuing their steady upward march this year, tightening margins for paper and paperboard producers who have been having trouble getting sales price increases for their products.
Now, a handful of North American pulp makers have told customers they want further price increases on softwood kraft and fluff grades in April. The list price boost of softwood kraft grades is $20/metric ton; the proposed hike on fluff is $30/metric ton.
So, the proposed list prices next month will be $810/metric ton for northern bleached softwood kraft. Buyer surveys show that NBSK averaged $770 in the spot market, as compared with a list of $790. The new list will be $770 for southern bleached softwood kraft; this month, SBSK has averaged $735 versus a list of $750. Meanwhile, in fluff pulp, suppliers want to bring their list price to $820/metric ton from $790. This month’s spot has averaged $780.
Now, a handful of North American pulp makers have told customers they want further price increases on softwood kraft and fluff grades in April. The list price boost of softwood kraft grades is $20/metric ton; the proposed hike on fluff is $30/metric ton.
So, the proposed list prices next month will be $810/metric ton for northern bleached softwood kraft. Buyer surveys show that NBSK averaged $770 in the spot market, as compared with a list of $790. The new list will be $770 for southern bleached softwood kraft; this month, SBSK has averaged $735 versus a list of $750. Meanwhile, in fluff pulp, suppliers want to bring their list price to $820/metric ton from $790. This month’s spot has averaged $780.
Appleton Plans Thermal Paper Capacity Increase
North America’s largest thermal paper producer recently announced plans to increase capacity. They will spend $100million on a new coater for making thermal papers. Appleton believes the growth in two-sided thermal paper will continue. This type of paper is used for casino studs, point of purchase receipts, ballot box voting and deli stickers. Appleton Paper also produces carbonless papers.
Paper.com has Appleton's complete grade offerings, including all the entire family of NCR carbonless items.
Paper.com has Appleton's complete grade offerings, including all the entire family of NCR carbonless items.
Uncoated Papers will increase in Price
Demand for uncoated Freesheet continues to strengthen and with supply curtailment, producers will surely begin to increase pricing. Cost pressure also continues with energy prices staying high and increased pricing for pulp and chemicals. The producers of Text and Cover grades have already announced increase in price – lead by Mohawk, Neenah/Fox River, and Wausau.
Paper.com is the world's largest paper website, supplying nearly every mill's uncoated text and cover grade.
Paper.com is the world's largest paper website, supplying nearly every mill's uncoated text and cover grade.
North American Newsprint Producers continue to suffer
Pricing continued its downward spiral for January, February and so far this month (March)– witnessing a price decrease of $30/ton. Pricing now on 27.7lbs newsprint (typical weight) is $665/ton. This market continues to be beaten up by the internet.
Sluggish Box Demand
USA Box shipments showed slower than normal demand so far this year. 42lbs unbleached kraft linerboard remains at $510-520list with the bigger converters paying more like $480-490. Box sales are generally an excellent barometer for the economy.
Pricing indicators – Rolls – March 2006
30lbs Newsprint ………… $625/t – List Price – larger end users pay less
27.7 Newsprint …………... $665/t
#3 60Lbs CFS……………. $890-920/t
#5 $40lbs LWC ………… $755-780/t
50lbs UFS ………………..$800-820/t
27.7 Newsprint …………... $665/t
#3 60Lbs CFS……………. $890-920/t
#5 $40lbs LWC ………… $755-780/t
50lbs UFS ………………..$800-820/t
Profile of Coated Freesheet Grades
Coated Freesheet (CFS), also called Woodfree, are coated grades at the premium end of the publication grade spectrum and are used for high end catalogues, magazines, catalogues, annual reports, and advertising. Papers are rated according to gloss levels (matte, dull, gloss, cast coated), brightness levels (85-96); basis weight ranges from 50 -100lbs. Production capacity in North America is 4,560,000 tons - 420,000tons lower than last year because of machine curtailments. Operating rates in 2005 were only 88% slight improvement was witnessed in 2006 to 93%. We also note Europe producers forecast curtailing 560,000 tons in 2007.
We believe Coated Freesheet demand will continue to be sluggish.
Top North American Coated Freesheet producers
Mill Capacity Mkt Share
SAPPI 1,400,000 28%
StoraEnso 1,340,000 27%
NewPage 730,000 14.5%
Verso 560,000 11%
Tembec 310,000 6%
We believe Coated Freesheet demand will continue to be sluggish.
Top North American Coated Freesheet producers
Mill Capacity Mkt Share
SAPPI 1,400,000 28%
StoraEnso 1,340,000 27%
NewPage 730,000 14.5%
Verso 560,000 11%
Tembec 310,000 6%
Sunday, March 11, 2007
AF&PA survey says paper/board capacity declined in 2006
The American Forest & Paper Association (AF&PA) released its 47th Annual Survey of Paper, Paperboard, and Pulp Capacity.
According to the survey, U.S. paper and paperboard capacity continued to edge lower in 2006, declining 1.6% to 97.7 million short tons. U.S. paper and paperboard capacity contracted 4.7% in the period from 2000 through 2006 or at an average annual rate of 0.7%.
Looking forward, the survey indicates that paper and paperboard capacity will decline another 0.7% in 2007 and then re-expand nearly one percent during the subsequent two years—rising 0.7% in 2008 and 0.2% in 2009.
According to the survey, U.S. paper and paperboard capacity continued to edge lower in 2006, declining 1.6% to 97.7 million short tons. U.S. paper and paperboard capacity contracted 4.7% in the period from 2000 through 2006 or at an average annual rate of 0.7%.
Looking forward, the survey indicates that paper and paperboard capacity will decline another 0.7% in 2007 and then re-expand nearly one percent during the subsequent two years—rising 0.7% in 2008 and 0.2% in 2009.
Wednesday, March 07, 2007
Summary of UNCOATED FREE SHEET
As reported, Uncoated free sheet prices were flat in February. The market for UFS is reasonably tight, with pricing on the margin starting to trend upward. The issue over the next few months will be supply reductions - paper manufacturers reducing capacity. It is expected that some fall-out from the Domtar/Weyerhaeuser combination. In addition, during the second quarter of this year, International Paper will idle its 350,000 Pensacola, FL UFS machine in preparation for a conversion to containerboard. In total, 500-600,000/tons of capacity could be idled. European & Japanese producers have both announced pricing initiatives in the past 2 weeks. European UFS prices are reportedly well above US prices.
Update of COATED FREE SHEET
Most producers have announced $50-$60/ton hikes on lower grade coated free sheet for March. APP "led"
the increase, while other offshore producers like Lecta, Sappi, and Stora quickly followed. Rising pulp costs and capacity reductions are both helping to firm the market. However, the biggest issue is the potential for 70-100% duties on Asian imports. Preliminary finding from the Commerce Dept is due out in early April. Domestic shipments rose 3% in January.
the increase, while other offshore producers like Lecta, Sappi, and Stora quickly followed. Rising pulp costs and capacity reductions are both helping to firm the market. However, the biggest issue is the potential for 70-100% duties on Asian imports. Preliminary finding from the Commerce Dept is due out in early April. Domestic shipments rose 3% in January.
Neenah Paper Closes Paper Plant
Neenah Paper, a maker and distributor of specialty paper, said Wednesday it will close a plant it acquired when it bought Fox Valley Corp., parent of paper maker Fox River Paper Co.
The plant is located near Great Barrington, Mass. Last month the Atlanta-area company said it would buy Fox River, which has a total of 750 employees and four manufacturing plants, including 140 at the plant that is closing.
Neenah Paper will take a one-time cash charge of about $3 million for severance and other costs related to the closure.
The company said it expects ongoing annual savings of about $5 million from the deal, but that will not be realized immediately due to product transition costs in 2007.
"Closing the mill allows us to eliminate costs and improve margins while still serving the needs of key customers," said Sean Erwin, company chairman and chief executive. "Selected products made at Housatonic will be produced at our other sites, where we have available capacity and the ability to make these grades at a lower cost."
The plant is located near Great Barrington, Mass. Last month the Atlanta-area company said it would buy Fox River, which has a total of 750 employees and four manufacturing plants, including 140 at the plant that is closing.
Neenah Paper will take a one-time cash charge of about $3 million for severance and other costs related to the closure.
The company said it expects ongoing annual savings of about $5 million from the deal, but that will not be realized immediately due to product transition costs in 2007.
"Closing the mill allows us to eliminate costs and improve margins while still serving the needs of key customers," said Sean Erwin, company chairman and chief executive. "Selected products made at Housatonic will be produced at our other sites, where we have available capacity and the ability to make these grades at a lower cost."
Saturday, March 03, 2007
State of the Paper Industry
Notes on conference call held by Mark Wilde - Deutsche Bank - Equity Research
Mr. Wilde firmly believes markets for commodity grades are tightening. Three primary causes 1- supply side reduction in both North America and Europe; 2 – cost pressure such as gradual increases of fiber, chemicals, and transportation as well as recycled pulp; 3 – Demand in both Europe and Asia improving (not the case in North America). Market that is experiencing best recovery is containerboard - the January price increase of $40/ton is firmly in place; producers have adjusted production downward to maintain a tight market; and demand actually trending up.
Uncoated Freesheet grades have witnessed a 5-6% decline in capacity – look for more shuttered equipment for nonintegrated mills (mills that do not produce pulp) – thus tightening supply. Also, two big events – International l Paper transferring 350,000 tons of uncoated paper to now make packaging grades; and merger of Weyerhaeuser and Domtar they WILL rationalize equipment with closures. Also, Canadian dollar continues to be week and inventories in USA are historically low.
Accordingly, Mark Wilde forecasts slight tightening and a price increase in March / April for uncoated Freesheet.
He was not as bullish of coated papers. Although Europe has decreased imports into USA – Asia has increased. The publication-coated grades (LWC – groundwood) will continue to experience poor demand given the softness in end user markets – magazine, inserts, direct mail, and catalogues.
Mr. Wilde firmly believes markets for commodity grades are tightening. Three primary causes 1- supply side reduction in both North America and Europe; 2 – cost pressure such as gradual increases of fiber, chemicals, and transportation as well as recycled pulp; 3 – Demand in both Europe and Asia improving (not the case in North America). Market that is experiencing best recovery is containerboard - the January price increase of $40/ton is firmly in place; producers have adjusted production downward to maintain a tight market; and demand actually trending up.
Uncoated Freesheet grades have witnessed a 5-6% decline in capacity – look for more shuttered equipment for nonintegrated mills (mills that do not produce pulp) – thus tightening supply. Also, two big events – International l Paper transferring 350,000 tons of uncoated paper to now make packaging grades; and merger of Weyerhaeuser and Domtar they WILL rationalize equipment with closures. Also, Canadian dollar continues to be week and inventories in USA are historically low.
Accordingly, Mark Wilde forecasts slight tightening and a price increase in March / April for uncoated Freesheet.
He was not as bullish of coated papers. Although Europe has decreased imports into USA – Asia has increased. The publication-coated grades (LWC – groundwood) will continue to experience poor demand given the softness in end user markets – magazine, inserts, direct mail, and catalogues.
Newsprint market
The official newsprint price fell an additional $10/ton, after falling $35/ton over the last few months. Without more capacity
rationalization, prices could fall even further. The market is sloppy and needs a fix; it may come by a "merger of equals" between Bowater and Abitibi. However, we think an even better catalyst would be consolidation among 2nd & 3rd tier players. One other issue to watch: ONP (Old Newspaper =recycle fiber) costs. While the trades are showing prices up only about
$5/ton in February, our brokerage contacts are pointing to increases as large as $40/ton. This would have big implications for many producers, especially recycled-heavy producers.
rationalization, prices could fall even further. The market is sloppy and needs a fix; it may come by a "merger of equals" between Bowater and Abitibi. However, we think an even better catalyst would be consolidation among 2nd & 3rd tier players. One other issue to watch: ONP (Old Newspaper =recycle fiber) costs. While the trades are showing prices up only about
$5/ton in February, our brokerage contacts are pointing to increases as large as $40/ton. This would have big implications for many producers, especially recycled-heavy producers.
U.S. Cut Size Paper Market Forecast and Distribution Channels: 2005-2010
InfoTrends’ new forecast on U.S. cut size (copy paper) paper distribution channels indicates that while paper merchants, office superstores, and contract stationer divisions will remain power houses for moving paper, the Internet, computer superstores, and mass merchandisers are expected to gain more presence as a source for paper
General merchandise stores and mass merchandisers will increase the amount of paper that they sell due to the sheer number of stores and the convenience of being able to purchase paper along with other goods.
The Internet and companies such as Paper.com, however, is the only channel expected to show double-digit growth in terms of cut size tons distribution between 2005 and 2010. In 2010, 73% of all cut size tons will be sold through non-retail channels. This is largely because supply chain management is an area of proficiency for non-retail channels, especially when it comes to delivering truckloads and pallets of paper.
Quick printers have also emerged as a source of cut size paper. As a complement to their traditional business, quick printers including FedEx/Kinkos are emphasizing their ability to capture supplies business at retail and on-line due to their number of store locations and access to product. Staples is also opening stand-alone quick printer locations that stock a limited number of office products SKUs including paper.
Cut size paper is a low margin, high volume market that is very competitive and price sensitive. Heavy cartons of paper can be expensive to move efficiently, and this has forced channels such as office machine dealers, forms distributors and manufacturers, and small storefronts to reconsider their roles in selling paper.
General merchandise stores and mass merchandisers will increase the amount of paper that they sell due to the sheer number of stores and the convenience of being able to purchase paper along with other goods.
The Internet and companies such as Paper.com, however, is the only channel expected to show double-digit growth in terms of cut size tons distribution between 2005 and 2010. In 2010, 73% of all cut size tons will be sold through non-retail channels. This is largely because supply chain management is an area of proficiency for non-retail channels, especially when it comes to delivering truckloads and pallets of paper.
Quick printers have also emerged as a source of cut size paper. As a complement to their traditional business, quick printers including FedEx/Kinkos are emphasizing their ability to capture supplies business at retail and on-line due to their number of store locations and access to product. Staples is also opening stand-alone quick printer locations that stock a limited number of office products SKUs including paper.
Cut size paper is a low margin, high volume market that is very competitive and price sensitive. Heavy cartons of paper can be expensive to move efficiently, and this has forced channels such as office machine dealers, forms distributors and manufacturers, and small storefronts to reconsider their roles in selling paper.
Pulp and Paper Prices not in Sync
Wood pulp producers want to boost prices but paper makers are skeptical. That’s because overall demand for printing and writing papers in North America fell 3.2% in January compared with January 2006, according to Canada's Pulp and Paper Products Council. Total shipment levels were down 3.4% year-over-year at 2.26 million metric tons.
Pope & Talbot this week announced a $30/metric ton price increase for northern bleached softwood (NBSK) grades of market pulp—but pushed the effective date to April. The new North American list price would be $820/metric ton. Earlier, competitor Weyerhaeuser announced plans to hike NBSK by $20 in March to $810.Despite a $790 list price in February, buyers report NBSK sold for $745.
Meanwhile, International Paper, Georgia-Pacific and Weyerhaeuser separately informed U.S. paper-making customers they plan to raise their southern bleached softwood Kraft pulp prices by $20/metric ton in March. The current list price of SBSK is $750 but it sold on average for $720 in February.
Pope & Talbot this week announced a $30/metric ton price increase for northern bleached softwood (NBSK) grades of market pulp—but pushed the effective date to April. The new North American list price would be $820/metric ton. Earlier, competitor Weyerhaeuser announced plans to hike NBSK by $20 in March to $810.Despite a $790 list price in February, buyers report NBSK sold for $745.
Meanwhile, International Paper, Georgia-Pacific and Weyerhaeuser separately informed U.S. paper-making customers they plan to raise their southern bleached softwood Kraft pulp prices by $20/metric ton in March. The current list price of SBSK is $750 but it sold on average for $720 in February.
Abitibi and Bowater Merge
As reported in past, the two newsprint producing giants, Abitibi and Bowater have agreed to combine in an all stock merger of equals. The new company will be called AbitibiBowater and will have revenues of nearly $8billion. This new company will be the largest newsprint and publication paper producer in North America.
PIA/GATF report on Survey of Printing Industry
According to printing companies recently surveyed, the most significant issue currently challenging the company was labor and staffing. This was followed by competitor’s pricing, raising cost of paper, health insurance, and declining demand.
The survey also revealed printers that focused on specialty printing grew the most(+8.6%) in 2006 followed by Business Forms (+5.7%), General Commercial Printers(+4%), Greeting Card Printers(+4%), and Newspaper (+2%).
Last comment survey reported included traditional ‘ink based’ printers hold @75% of the market but is decreasing due to an increase in demand for digital printing.
The survey also revealed printers that focused on specialty printing grew the most(+8.6%) in 2006 followed by Business Forms (+5.7%), General Commercial Printers(+4%), Greeting Card Printers(+4%), and Newspaper (+2%).
Last comment survey reported included traditional ‘ink based’ printers hold @75% of the market but is decreasing due to an increase in demand for digital printing.
News on Tissue Paper
You may recall that Kruger purchased all the tissue assets of Scott Paper in 1997 and this included a 10 year licensing agreement for very popular consumer trademarks such as Scott, Cottenelle, and ScotTowels. Accordingly, Kruger has announced names changes for these best selling tissue brands; Cottonelle will become Cashmere; ScotTowels will become SpongeTowels; Scotties, and Purex, and Viva will all become White Swan.
Domtar Shelving Maine Paper Machine for March
Domtar’s Woodland Paper mill will be idling a paper machine during the entire month of March, a move that could impact as many as 90 employees, according to the Bangor Daily News.
Company officials told the paper that the action is being prompted by market-related conditions. The machine is slated to be refired on March 29.
Company officials told the paper that the action is being prompted by market-related conditions. The machine is slated to be refired on March 29.
Pulp Prices Increase …. Again
Domtar became the fourth major NA producer to announce a $20/ton price hike for Pulp for March. The hike would make NBSK $810/ton and SBSK $770/ton. Higher pulp prices may lead printing & writing paper producers to charge higher prices.
Saturday, February 17, 2007
Paper's moment may have finally arrived.
Industry momentum has turned. Over the past 4-6 weeks, to our surprise, momentum in many paper markets has swung around. Industry backlogs and pricing are emerging from the mid-winter doldrums much
stronger than we expected. In many cases, this looks like a global phenomenon.
The biggest wildcard market is uncoated white paper. In late 2006 and beginning of this year - price slippage has raised producer’s Concerns; however, we are fairly bullish on prospects. With market pulp costs still rising and both Domtar & International Paper likely to idle capacity (potentially 5-6% of North American supply) during next few months, it is hard to envision much further pricing downside. Indeed, we think a more likely scenario is for prices to begin rebounding by
late Spring.
We think uncoated white paper markets could begin to show similar strengthening.
stronger than we expected. In many cases, this looks like a global phenomenon.
The biggest wildcard market is uncoated white paper. In late 2006 and beginning of this year - price slippage has raised producer’s Concerns; however, we are fairly bullish on prospects. With market pulp costs still rising and both Domtar & International Paper likely to idle capacity (potentially 5-6% of North American supply) during next few months, it is hard to envision much further pricing downside. Indeed, we think a more likely scenario is for prices to begin rebounding by
late Spring.
We think uncoated white paper markets could begin to show similar strengthening.
Shipping Rates continue to increase
Shippers such as Paper.com continue to shake our heads over recent increases in carrier fees. The big Three – UPS (Paper.com’s
exclusive shipper) Federal Express, and DHL have all announced an increase of 10% for this year. This year the USPS will also increase their rates.
Three major reason for these increases-
1-Cost of Carriers operations – primarily fuel costs
2-Competition – (or lack of) With only three major options – the industry acts like a monopoly - they all appear to increase rates in step.
I note, regional alternatives have poor tracking and diligence reveals excessive damage.
3-Demand – With the success of Internet companies such as Paper.com, this new shipping demand has kept business booming and offers limited motivation for the carriers to discount prices.
We at Paper.com constantly review shipping costs to offer the most competitive rates to our end users.
exclusive shipper) Federal Express, and DHL have all announced an increase of 10% for this year. This year the USPS will also increase their rates.
Three major reason for these increases-
1-Cost of Carriers operations – primarily fuel costs
2-Competition – (or lack of) With only three major options – the industry acts like a monopoly - they all appear to increase rates in step.
I note, regional alternatives have poor tracking and diligence reveals excessive damage.
3-Demand – With the success of Internet companies such as Paper.com, this new shipping demand has kept business booming and offers limited motivation for the carriers to discount prices.
We at Paper.com constantly review shipping costs to offer the most competitive rates to our end users.
Neenah introduces New Transfer Paper
Neenah Paper recently introduced Jet Trans Iron Man Inkjet Transfer Papers for home use. The grade will allow end user to print an image from Inkjet desktop printer onto a light cotton or synthetic and testing confirms at least 15 washes without damage to image.
Paper.com will carry this grade and support orders as little as a 500-sheet ream.
Paper.com will carry this grade and support orders as little as a 500-sheet ream.
Glatfelter expands Carbonless Line
Glatfelter introduced Xcelerator, a new line of carbonless paper for digital environments. The paper is engineered with greater bulk to increase sheet stability for improved performance. The line offers an ultra white CB ply and is 100% guaranteed. Paper.com supports this grade as well as Appleton’s NCR; Xerox; Enterprise and TST continuous; and Nekoosa’ s carbonless line. Paper.com also carries similar company’s thermal papers.
Smart Papers out of Bankruptcy and producing Paper
We have reported of Smart Paper’s status in past, and they continue to progress out of Chapter 11. Paper.com will again support this mill’s offerings. The 120,000 ton per year Hamilton, Ohio mill will manufacture 12 premium cast coasted, matte coated, and uncoated text and cover brands on three paper machines and 22 casting drums. Plainfield Capital purchased Smart and will invest an additional $500,000 on new equipment, improved color systems, and new converting and embossing equipment.
Many Large consumers of Paper go with Lighter Paper
The USA has witnessed a migration to lighter weight papers with most clients that consume large volumes. Lighter weight paper provides many advantages such as more paper (surface area) per pound, savings on postage, and transportation. The producers of commodity paper have learned to manufacture quality paper at lighter weights. The evolution of pigments has been redesigned to overcome opacity concerns and allow for increased brightness and improved run ability on press. Platy kaolins, combined with engineered carbonates have allowed publication and catalogue papers the quality required. The USPS has announced yet another increase for this year – look for further weight reductions – also, less pages and smaller sized publications.
Paper.com has over 20,000 papers – from heavy weight to the lightest manufactured.
Paper.com has over 20,000 papers – from heavy weight to the lightest manufactured.
Cenveo Acquires Printegra
Cenveo has dipped its feet in the acquisition pond again, obtaining Printegra Corp. of Peachtree City, GA, from Huron Capital Partners for an undisclosed amount of cash.
Printegra has two divisions, National Imprint and Synergy Label, with 14 manufacturing facilities across the country. The company, which specializes in short run printing, posts annual sales of roughly $90 million. It produces labels, business forms, envelopes and security documents, among other products.
“This strategic acquisition immediately establishes Cenveo as the leader in the growing market for short run and highly customized printed products,” Bob Burton, Cenveo chairman and CEO, said in a release. “The combination of these market leaders is a powerful opportunity to solidify our position as the leading competitor in the custom envelope print market.
Printegra has two divisions, National Imprint and Synergy Label, with 14 manufacturing facilities across the country. The company, which specializes in short run printing, posts annual sales of roughly $90 million. It produces labels, business forms, envelopes and security documents, among other products.
“This strategic acquisition immediately establishes Cenveo as the leader in the growing market for short run and highly customized printed products,” Bob Burton, Cenveo chairman and CEO, said in a release. “The combination of these market leaders is a powerful opportunity to solidify our position as the leading competitor in the custom envelope print market.
Vietnam is Newest Player in Paper Market
The Ministry of Industry in Vietnam is currently raising capital to build a paper mill. Current Vietnamese paper producers only make simpler kinds of paper, such as newsprint, writing paper, and packaging paper. The Ministry of industry will focus on developing forests and ensuring sufficient supplies of raw materials for producing 600,000 tones of pulp by 2010 and 1.8 million tones by 2020, as well as to reach the target of meeting 70 per cent of domestic demand by 2020.
Wednesday, February 14, 2007
Market Pulp Update
Strong demand coupled with supply disruptions from mill closures assisted North American market pulp producers to advance prices to the highest levels in over a decade.
Many producers shuttered inefficient equipment and costs of manufacture increased such as energy and wood sources during 2006 creating an environment for advancing prices. The unofficial count was 11 pulp mills closed, displacing 2.3 million tons – 7 of which produced Northern Bleached Softwood Kraft (NBSK). US list price for the NBSK rose from $640 to $725 / ton by July 2006. The 4Q06 allowed for pricing to reach $770/ton for NBSK; $685 for NBNK; $708 for BEK-( Bleached Eucalyptus Kraft). Look for further increases throughout 2007.
Many producers shuttered inefficient equipment and costs of manufacture increased such as energy and wood sources during 2006 creating an environment for advancing prices. The unofficial count was 11 pulp mills closed, displacing 2.3 million tons – 7 of which produced Northern Bleached Softwood Kraft (NBSK). US list price for the NBSK rose from $640 to $725 / ton by July 2006. The 4Q06 allowed for pricing to reach $770/ton for NBSK; $685 for NBNK; $708 for BEK-( Bleached Eucalyptus Kraft). Look for further increases throughout 2007.
Observations on the paper Industry
The paper manufacturing printing and writing sector has done a good job balancing supply with demand and we believe this will continue with additional mergers and equipment curtailment as the industry rationalizes assets. The industry was hurt in 2006 with increased prices for raw materials including, fiber, chemical, energy, and transportation cost increases. The year 2007 will continue to be a challenge with the USPS increasing postage and increased competition from Asia imports. Although Europe appears busy and has reduced tonnage shipped in USA – Asia countries such as China, Indonesia, and South Korea have increased coated free sheet shipments and they are now including web grades to compliment the sheet fed grade offerings.
Some of the more meaningful 2006 events include- International Paper sold its coated division to Versa; Weyerhaeuser and Domtar merged; NewPage shut down large two paper machines.
Newsprint continues to struggle with newspaper circulation down, excess capacity, reduced web sizes, lighter basis weights, and increased imports from China. US Dailies consumed 500,000 fewer tons in 2006 versus 2005. Although Newsprint is transacting above its historic low of $445 (Aug2002) to a present level of $675 – it is down from its
High in July 2006.
Some of the more meaningful 2006 events include- International Paper sold its coated division to Versa; Weyerhaeuser and Domtar merged; NewPage shut down large two paper machines.
Newsprint continues to struggle with newspaper circulation down, excess capacity, reduced web sizes, lighter basis weights, and increased imports from China. US Dailies consumed 500,000 fewer tons in 2006 versus 2005. Although Newsprint is transacting above its historic low of $445 (Aug2002) to a present level of $675 – it is down from its
High in July 2006.
Plastics demand outpacing paper 10:1 Plastics demand outpacing paper 10:1 Plastics demand outpacing paper 10:1
From a Freedonia Report
The ubiquitous grocery bagger's question, "Paper or plastic?" is being answered more and more with a resounding "Plastic" when it comes to consumer packaged-goods makers and their choice of converted materials and containers. Plastic is expected to increase its share of the market to 53 percent (in pounds) in 2010, according to a new study by Cleveland-based researcher The Freedonia Group, Inc.
This percentage understates plastic's share because less plastic is generally required than paper in most applications due to its lighter weight. Plastic's share of the market will expand at a slower pace than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. Overall, volume for these two fields will climb from 23.6 billion lbs last year to 25.6 billion in 2010—about 1.7 percent annually. Growth in demand for plastic packaging is forecasted to outpace that of paper packaging by a 10:1 margin through 2010. Demand will rise 2.9 percent a year versus paper's increase of only 0.3 percent. While barely in positive territory, this contrasts with the 1.0 percent annual decline in paper-packaging demand seen in the 2000-05 period. Plastic’s advances will result from its competitive cost and performance advantages over paper, Freedonia says. Robust growth is expected for single-serve plastic milk bottles, driven by conversions from half-pint tabletop cartons in quick-serve restaurants and school lunch programs. Foodservice demand will be sparked by growing use of paperboard boxes, cartons, buckets and pails, wraps and bags. While most dairy applications for paper are mature, watch for frozen novelties to drive folding-carton growth.
The ubiquitous grocery bagger's question, "Paper or plastic?" is being answered more and more with a resounding "Plastic" when it comes to consumer packaged-goods makers and their choice of converted materials and containers. Plastic is expected to increase its share of the market to 53 percent (in pounds) in 2010, according to a new study by Cleveland-based researcher The Freedonia Group, Inc.
This percentage understates plastic's share because less plastic is generally required than paper in most applications due to its lighter weight. Plastic's share of the market will expand at a slower pace than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. Overall, volume for these two fields will climb from 23.6 billion lbs last year to 25.6 billion in 2010—about 1.7 percent annually. Growth in demand for plastic packaging is forecasted to outpace that of paper packaging by a 10:1 margin through 2010. Demand will rise 2.9 percent a year versus paper's increase of only 0.3 percent. While barely in positive territory, this contrasts with the 1.0 percent annual decline in paper-packaging demand seen in the 2000-05 period. Plastic’s advances will result from its competitive cost and performance advantages over paper, Freedonia says. Robust growth is expected for single-serve plastic milk bottles, driven by conversions from half-pint tabletop cartons in quick-serve restaurants and school lunch programs. Foodservice demand will be sparked by growing use of paperboard boxes, cartons, buckets and pails, wraps and bags. While most dairy applications for paper are mature, watch for frozen novelties to drive folding-carton growth.
Monday, February 12, 2007
Neenah Paper Acquirers Fox River Paper Company
Fox River agreed to be acquired by Neenah Paper. The formal announcement was made by Fox River’s CEO, Jeffery Miller, citing rising costs, decreased demand due to electronic communication, and excess capacity for their grades' demand.
Fox River produces premium printing and writing grades – all available through Paper.com. In time, the Fox River name will disappear and brands will be integrated into the Neenah paper product offerings.
Fox River produces premium printing and writing grades – all available through Paper.com. In time, the Fox River name will disappear and brands will be integrated into the Neenah paper product offerings.
more on COATED FREE SHEET
Most producers have announced $50-$60/ton hikes on lower grade coated free sheet for March. It is interesting to note that Asia Pulp & Paper "led" the increase, while major offshore producers like Lecta, Sappi, and Stora quickly followed. Rising pulp costs and capacity reductions are both helping to firm the market. NewPage recently announced the permanent closure of a machine @ Luke, MD and extensive downtime at Rumford, ME.
More on NEWSPRINT
The official newsprint price fell an additional $20/ton, after falling $15/mton over the last few months. Without more capacity
rationalization, prices could fall further. The market is sloppy and needs a fix; it may come by a "merger of equals" between Bowater and Abitibi. However, an even better catalyst would be consolidation among 2nd & 3rd tier players.
rationalization, prices could fall further. The market is sloppy and needs a fix; it may come by a "merger of equals" between Bowater and Abitibi. However, an even better catalyst would be consolidation among 2nd & 3rd tier players.
Paperboard prices may increase
Several mills want to boost prices in North America for uncoated recycled paperboard, the lightweight recycled material used for cereal and other cardboard boxes, which typically improves in sales in the spring. However, this year, inventories are still at a high 3.5 weeks of supply, making a seasonal buying pickup uncertain.
Still, Sonoco, Port Townsend, and Caraustar have proposed an increase of $40 to $50 per ton, depending on grades, effective with shipments in March. This increase is necessitated by recent and projected increases in raw material costs, led by recovered paper, as well as chemicals and starch.
Still, Sonoco, Port Townsend, and Caraustar have proposed an increase of $40 to $50 per ton, depending on grades, effective with shipments in March. This increase is necessitated by recent and projected increases in raw material costs, led by recovered paper, as well as chemicals and starch.
Sunday, February 04, 2007
Abitibi and Bowater Announce Merger
Newsprint Market Update
The official newsprint price fell an additional $20/ton, after falling $15/ton over the last few months. Without more capacity
rationalization, prices will probably fall even further. The market is weak and the proposed merger of producers such as Bowater and Abitibi will assist with adding discipline to the market and thus pricing. Consumption is down 7.9% YTD and Stora Enso has restarted its 195,000tpy newsprint mill in Port Hawkesbury (and has to "buy" a home for the tonnage). There is not much evidence of Chinese tonnage in US, but the threat alone will pressure prices.
rationalization, prices will probably fall even further. The market is weak and the proposed merger of producers such as Bowater and Abitibi will assist with adding discipline to the market and thus pricing. Consumption is down 7.9% YTD and Stora Enso has restarted its 195,000tpy newsprint mill in Port Hawkesbury (and has to "buy" a home for the tonnage). There is not much evidence of Chinese tonnage in US, but the threat alone will pressure prices.
Shipments Were Mixed for Printing Grades
The Printing and Writing paper shipments were somewhat sluggish in December, falling 1.0%. Uncoated free sheet, coated free sheet, and uncoated groundwood volumes all showed declines, while light-weight coated paper (magazine and catalogue) shipments grew modestly. For the full year 2006, the entire Printing and Writingcategory was roughly flat, rising 0.2% over 2005 volumes.
However, we expect further closures across USA in 1H07. International Paper (IP) will soon close a 350,000 tpy uncoated machine conversion to Containerboard, and Domtar is expected to move quickly after its pending merger with Weyerhaeuser’s white paper operations to shutter capacity. Together, the IP and Domtar moves should remove 5% of the North American supply base in Uncoated Freesheet papers.
However, we expect further closures across USA in 1H07. International Paper (IP) will soon close a 350,000 tpy uncoated machine conversion to Containerboard, and Domtar is expected to move quickly after its pending merger with Weyerhaeuser’s white paper operations to shutter capacity. Together, the IP and Domtar moves should remove 5% of the North American supply base in Uncoated Freesheet papers.
Uncoated Freesheet Market
Offset prices reportedly fell $20/ton in January, and copy paper prices fell $15/ton. January is a seasonally weak period for
printing and writing demand. Still, one can be reasonably encouraged by producer's efforts to take downtime and preserve
pricing power. Paper analyst such as Mark Wilde think the industry needs to cut supply by 400-500K/tons.
Come to Paper.com for all your Uncoated Paper demands. With over 20,000 items, they are sure to have all your paper requirements.
printing and writing demand. Still, one can be reasonably encouraged by producer's efforts to take downtime and preserve
pricing power. Paper analyst such as Mark Wilde think the industry needs to cut supply by 400-500K/tons.
Come to Paper.com for all your Uncoated Paper demands. With over 20,000 items, they are sure to have all your paper requirements.
Market pulp Update
Producers and customers increasingly believe January's planned $20/ton will be successful. Robust global demand, up 4.4% YTD, and tight supply is supporting higher pulp prices. Global inventories remain low at 29 days of supply. New supply is gradually ramping up in Chile. Arauco's Nueva Aldea started up last month and CMPC has reportedly started up its Santa Fe # 2 line; both lines however are running slowly with limited production. Terrace Bay Pulp restarted its 350,000/tpy NBSK line in Ontario.
Container Board Market update
A recent increase in shipments of Container Board Grades could put new life into an attempted price increase. Box volumes jumped a robust 5.5% last month. Combined, mill and box plant, inventories fell 82K tons in December. While the $40/ton January price hike initiative is dormant for now, these strong numbers could revive the initiative and help boost prices in March or April. Combine broad support, supply discipline, modestly improving demand, rising fiber costs yields a fairly decent market. The key is keeping supply and demand in balance.
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