Thursday, May 29, 2008
AbitibiBowater announces third $60/ton newsprint hike of 2008
AbitibiBowater told customers it plans to increase the price of 30-lb (48.8 gm2) newsprint in North America by $60/tonne in the third quarter of 2008. It is the newsprint giant’s third price hike announcement of the year. If fully implemented it will take the rise in North American newsprint prices over just nine months to $180/ton.
As with AbitiBowater’s first and second quarter $60/ton hikes, this one will also be in $20 monthly increments. AbitibiBowater told customers in a May 16 letter that the company continued to experience serious cost inflation, especially in the areas of power, transportation and fiber, and was not yet generating sustainable results. This increase will bring 30 pound standard newsprint to $680/Mton.
NBSK pulp prices are rising $20/metric ton
Domtar informed North American customers this week that it will increase prices by $20/metric ton to $900 on northern bleached softwood kraft (NBSK) pulp, effective June 1. Purchasingdata.com’s monthly survey shows that May prices were stuck at $880 for the fifth consecutive month.
However, industry contacts tell the RISIinfo.com forest products online newsletter they have expected a price increase on NBSK because of a widely held belief that supplies would decline in the wake of maintenance downtime at many mills, as well as the recent idling of Pope & Talbot’s pulp mills. In addition, RISIinfo.com reports to its clients that most NBSK pulp is produced in Canada, where producers are facing margin pressures due to high costs for fiber, energy and a strong Canadian dollar.
Friday, May 09, 2008
Paper Prices forecasted to Continue to Increase
Paper prices could increase in 2008 by as much as 25% for coated papers and 20% for uncoated. This on top of increased postage for those who must mail printed promotions. A few thoughts to save on paper include purchasing paper from a website such as Paper.com – with over 40,000 different papers; purchase in bulk – the site often offers quantity discounts – if you do not see it, ask; adjust the size of your piece – uncommon sizes create waste; ask for value alternatives – a more reasonably priced paper may ‘do the trick’. Sites such as Paper.com have expert paper customer service, - call 888-Papergreat – they are available to assist you.
Paper.com advances Green Store
Top North American Producers
Mill Capacity (000) Market share
1 Domtar 4,600 35.2%
2 International Paper 3,200 24.4%
3 Boise 1,500 11.5%
4 Georgia Pacific 1,060 8.1%
5 Glatfelter 685 5.2%
6 Wausau Paper 380 2.9%
7 Blue Ridge 320 2.5%
8 Appleton 290 2.2%
9 Finch Pruyn 250 1.9%
10 Neenah 215 1.6%
Forecast for 2008 (000s)
Shipments 11,610
Capacity 12,065
Consumption 11,862
Uncoated Free Sheet Capacity Update
Go Green: Save Money
Kristine Kern, general manager of Mansueto Ventures, told Folio: that Inc. and Fast Company actually spent less money on paper last fall when they switched to a 100-percent recycled grade made by German paper company Leipa.
When Every Day with Rachael Ray switched to 85-percent recycled paper, the quality and hard costs of production stayed about the same but gave its image a “huge boon” among existing and prospective readers.
Groundwood papers use 2.2 tons less wood than the more expensive freesheet grades, according to Frank Locantore, director of the Magazine Paper Project for Co-Op America.
Bryant Wilson, national accounts manager at paper company Frank Parsons, says “readers will be much more forgiving if the quality is slightly off” if you switch to a lower-grade paper with FSC, SFI or PEFC certifications.
That theory can also apply to basis weights and trim sizes—when Dwell reduced its trim size, it saved about seven percent in paper usage as well as 950 trees per issue, a great statistic to share with readers.
Picking a Paper Alternative
Joanna Pettas of Folio Magazine
Paper prices have gone up around 20 percent, in some cases more, and additional hikes are likely on the way—30 percent by the end of the year, by some estimates. It’s more important now than ever to consider less expensive grades, but it’s not as simple as picking one off the shelf, since the most popular grades are largely on allocation. Also, compromising too much on quality is risky in a time when the economy is strained and competition is fierce. To mitigate cost, publishers need to take a critical look at their priorities and options and compromise accordingly.
First, Prioritize
Every paper decision comes with a trade-off, whether it’s in cost, quality or availability. Peter Wilson, vice president, paper procurement and supply chain at Quebecor World, suggests running the needs of each stakeholder—reader, advertiser, editorial, production and so on—through a forced ranking process and finding a compromise. “The compromises do not necessarily make them poor decisions,” he says, noting that the essence of a good paper decision is to “minimize cost, maintain or improve revenue, and profit from the difference.”
With quality, Dedra Smith, president of Printmark West, says, “The choice is to sacrifice the amount your readers and advertisers will tolerate.”
One b-to-b publisher says, “Paper quality is about the last thing we think about.” But for Biagio Lubrano, quality control manager at Conde Nast, opacity and brightness are key, which limits grade and basis weight options. To mitigate the lack of choices, Lubrano says the company uses stochastic printing, a method that employs frequency modulation screening instead of small screening to improve color trapping. Most of the company’s magazines are now on 38 lb. to 40 lb. coated Groundwood #5, with the New Yorker on 36 lb.
Assess Your Options
Continued mill closures and paper company consolidations have shortened an already tight list of paper options. NewPage recently discontinued five paper brands following its acquisition of Stora Enso North America. The most popular brands, from any company, are increasingly hard to get.
“If it’s lightweight and cheap, it’s probably on allotment,” says Bryant Wilson, national accounts manager at paper company Frank Parsons America.
Coated Groundwood papers #4 and #5, the common alternatives to more expensive coated freesheet, will see capacity closures of 14 percent for 2007 and 2008, according to forest products information provider RISI. Prices for these grades have gone up $9/cwt in the six months leading up to February and will go up another $3/cwt in April, according to Jeff Bruce, managing director of publishing papers at xpedx, a division of International Paper.
Down from these grades, selling at 10 to 12 percent less than coated Groundwood #5, according to Bruce, are Supercalendered grades—SCA, SCA+, and SCA++—which, luckily, are “much improved” and which “printers are better able to run” in recent years, Bruce says, making them a likely alternative for magazines like US Weekly, New York Times Magazine and Woman’s World, according to Austin MacDonald, account manager at paper merchant Lindenmeyr Central, who says they’ve risen in brightness and surface quality and are now available in lower basis weights.
But even SCA grades are strained, says Ernie Wohlfarth, director of magazine paper at Time Inc. Switching papers right now is tough, he says, because options are limited. It’s important to do research up front and make careful decisions because getting your old paper back is not easy afterwards.
Wohlfarth also suggests sticking to U.S.-manufactured paper and working with an established manufacturer who is not likely to disappear, taking your allotment with it.
What Next?
The fact that a paper may be on allocation is not a reason to ignore it completely. “Plan long term and get the ball rolling,” says Wilson of Frank Parsons. “If you’re on a #3 and you want to go to a #4, express that to someone—your printer, your distributor, the paper mill—so they can facilitate that in the future.”
Reducing trim size is another possibility. “We reduced our width by 5/8 inches—from nine inches to 8-3/8 inches—and thereby saved approximately seven percent on paper usage,” says Fran Fox, production director at Dwell, which launched a redesign in February. “We saved an additional one percent when we switched from an offshore 50.7# text stock to a domestic 50# stock.”
Hi-bulk papers, which maintain the feel of heavier grades at lower basis weights, are another option. But Wilson of Quebecor World is leery of these, saying they tend to reduce the final printed gloss and uniformity of ink. They’ve also been more difficult to source, he says.
Wilson also suggests doing a “thorough scrub of the total cost of ownership” through each possible channel—direct, broker/merchant, and printer.
While companies like Time Inc. and Conde Nast mostly source their own paper, smaller publishers usually rely on printers. For some, this model is disconcerting.
“We believe the printer marks up the price substantially,” says Robert Siel, production director at Sumner Communications. “So far, our strategy has been simply to pressure the printer to provide the best quality product for the lowest price.” His company is looking into buying its own paper but isn’t sure it can beat the printer’s rates.
Also, “If we buy the paper ourselves, someone—probably me—will have to invest a lot of time calculating, purchasing and scheduling the paper supply from the mills to the print facilities,” says Siel. “This means I may need another headcount.”
Printing, writing paper stocks have tumbled
North American mill inventories of printing and writing paper plunged to 1.8 million net tons at the end of March, a 19.3% drop compared with a year ago, the Pulp and Paper Products Council reports. Also, demand for these papers dropped 1.3% to 6.48 million tons. Also reflecting the weak demand is the fact that mills operated at 94% of capacity in March to make 2.04 million tons, down 6.5% compared with March 2007.
Uncoated free sheet, the basic office white paper stock, remains the weakest North American market for printing and writing papers. A review of the statistics shows that first-quarter demand of uncoated free sheet dropped by almost 4% to 2.88 million net tons, paced by a 10% drop in March shipments.
Monday, May 05, 2008
Paper Recycling Hits Record High
"Industry is demonstrating a real commitment to environmental sustainability by continuing to set and achieve aggressive paper recovery goals," said AF&PA President and CEO Donna Harman. "Whether at home, school, or work, paper recovery is something we can all do to make a difference."
"While the upward trend in recovery rates is most encouraging, getting to 60 percent is an important challenge for all of us. Everyone has a role to play in our effort to sustain and grow the country's recycling programs and recover more paper," continued Patrick J. Moore, chairman and CEO, Smurfit-Stone Container Corporation. Smurfit-Stone is a longstanding AF&PA member and is one of the world's largest paper recyclers. The company collected more than 7 million tons of recyclable material in 2007.
The 54.3 million tons of paper recovered in 2007 add up to more than 360 pounds for every man, woman, and child in America. Each percentage point is the equivalent of approximately one million additional tons of recovered paper -- enough to fill more than 14,000 railroad cars.
Joining the announcement at the industry's 131st Annual Paper Week conference, Maria Vickers, Deputy Director of the U.S. Environmental Protection Agency's Office of Solid Waste applauded the paper industry's achievements in increasing paper recycling, noting that "in 2007, the US recycled over 25 million tons more paper than was recycled in 1990. This increase in paper recycling reduced emissions by more than 97 million metric tons of carbon dioxide equivalent, comparable to the annual emissions of nearly 18 million cars." She also noted that EPA and AF&PA continue to work together on projects to stimulate paper recycling across the country.
Matthew McKenna, president and CEO of national nonprofit Keep America Beautiful, a partner of AF&PA on projects to promote paper recycling in schools, praised the Association and its members for their efforts. "True environmental progress, like what we celebrate today, comes when industries work together with communities, organizations, and dedicated individuals to make things happen." Paper.com recently created a store on its website that exclusively markets thousands of environmentally friendly papers.
SOURCE: American Forest & Paper Association
SMART Papers Completes Acquisition Of Domtar's Premium FSC-Certified Writing, Text And Cover Brands
Hamilton, OH - Premium North American papermaker SMART Papers recently announced that it has completed the acquisition of seven well-known Forest Stewardship Council-certified brands of premium writing, text and cover and cotton stationery brands from Montreal-based Domtar Corporation.
The brands acquired are Feltweave, Nekoosa Linen, Nekoosa 25% Cotton, Nekoosa Bond, Skytone, Solutions and Proterra.
SMART Papers sales, marketing, customer service representatives, manufacturing and warehousing will serve all Domtar premium uncoated customers from SMART Papers' centrally located U.S. headquarters and warehouse in Hamilton, Ohio.
"We believe our customers will strongly benefit from the addition of these well-respected brands to our family of environmentally preferable and recycled uncoated and coated products," said Tim Needham, Chairman of SMART Papers. "These brands perfectly complement our strategy as the market leader for premium environmentally sustainable, best-value, text, writing, cover and cotton writing brands."
"Our newest FSC-branded papers are a good match for our manufacturing technology, our mill capacity, and our North American distribution strategy," added Dan Maheu, President and COO of SMART Papers. "They build on our focus to provide entire FSC-certified product lines to our customers."
Maheu said that SMART Papers will provide first-tier support to all of its existing and new customers. Products will be distributed from the Hamilton manufacturing center and our distribution center in Southern California.
"We planned this acquisition carefully," said Maheu. "We have started manufacturing the brands and anticipate a smooth transition for our new customers."
He added that the acquisition "is a strong complement to our premium coated paper brands—the world standard in triple-cast-coated papers, Kromekote, and our popular Knightkote Matte brand."
Paper.com is the largest source for online papers and markets all the Smart grades including the new Domtar line.
SOURCE: SMART Papers
International Paper Mill Explosion
Monday, April 28, 2008
Smart reintroduces Passport Grade
North American Printing / Writing Statistics
Uncoated Free sheet
2007 shipments 11,665 million tons (down 4.4% 2006)
Imports 543 million tons
Demand 11,757 million tons (down 5.5% 2006)
Total Printing and Writing Papers
2007 shipments 27,379 million tons (down 0.8% 2006)
Imports 3,298 million tons
Demand 29,457 million tons (down 3.0% 2006)
North American Uncoated Market Capacity Shrinks
Uncoated Freesheet Pricing
Business Papers, (copy papers) prices rose $50/ton in March and
another $10/tons announced for April. Offset roll prices rose $30/ton in March and another $20 in April. At the same time, demand appears to be
easing.
Demand for Printing Papers
Worldwide, we see global demand increasing, at a decreasing rate; more color, less monochrome desk top printing; Offset printing will decrease and digital (variable) printing will increase; and, Direct mail will increase at a decreasing rate.
Our prediction is North America will look for more personalized, better quality printing. Color copiers and color laser printers as well as digital presses will become more popular.
Paper.com, a leading web based marketer of paper, has focused on high quality laser papers as well as digital papers to service this growth. The site firmly believes the future is in personalized marketing communications in color. They also offer most of the grades in an environmentally friendly version.
N.A. Printing/Writing Paper Inventories Decline
Imported Lightweight Thermal Papers may see New Duty
Newsprint Pricing
4 of 6 consecutive $20/ton price advances were all implemented. Implementation of the last 2
installments would take prices to $700/ton by June. Further price moves may be ahead.
Wednesday, April 23, 2008
Oji Starts US$1.95 Billion Paper Project in China
Japan’s Oji Paper Group has begun construction on a $1.95 billon paper project in Nantong, east China’s Jiangsu Province, after five years of preparation. A joint venture company named Jiangsu Oji Paper Co Ltd was set up last year, with Oji accounting for 90% of the investment and the Nantong Corporation the remainder. The first phase of the project is scheduled for 2010 with a 400,000 tonne/yr woodfree paper machine. The startup of the mill’s second 400,000 tonne/yr fine paper machine was pushed back to 2015 from 2012.
Rising Raw Materials for Paper producers
Hardwood pulp prices creep higher
Several hardwood pulp producers had trouble getting paper mills to accept all of a $30/metric ton price increase this month, but will continue pushing buyers in May. The purchasingdata.com survey of buyers matches data in the Pulp and Paper Week newsletter that northern bleached hardwood kraft pulp cost an average $810/metric ton in April, up just $5 from March. AbitibiBowater, Alberta-Pacific and Marubeni Pulp & Paper North had sought $835.
COATED GROUNDWOOD MARKET UPDATE
The industry witnessed shipments rose over 10% so far this year illustrating strong conditions. However, current market demand illustrates more tonnage available because of high paper prices and a slower economy as well as announced reductions in some cataloguing budgets.
Newsprint Demand continues to decline at a brisk pace
Domtar Selling Paper Line to SMART Papers
PAPER OR PLASTIC?
It sounds like a big step forward in environmental awareness — Whole Foods, the eco-friendly grocery chain, will ban conventional plastic shopping bags in its 270 stores. San Francisco has banned them in some places; so have Uganda and Bangladesh. But paper bags, it turns out, are hardly an ideal replacement. To ensure sturdier bags, most producers use primarily new paper, which means cutting down more trees. Then chemicals are used in the production of the bags to give them strength. According to a study by Franklin Associates, a consulting firm, plastic bags require significantly less energy than paper over the course of their life cycle, from manufacturing to transportation. Indeed, because paper bags are seven times bulkier, on average, than plastic bags, it takes a lot more energy to transport paper bags to grocery stores. Bulk matters on the other end too: paper bags take up nine times as much room in landfills, and recycling plastic uses 91 percent less energy than recycling paper. Which isn’t to say that Whole Foods has it wrong about plastic bags. Most are made from a nonrenewable resource, petroleum, and contain their own mix of toxic chemicals. They may be more energy-efficient with recycling, but only about 1 to 3 percent of plastic bags are recycled, compared with about 10 to 15 percent of paper bags. And millions of the 100 billion bags Americans throw away each year end up as litter, clogging storm drains and choking sea animals. A third way may be the only good choice. As part of its ban on regular plastic bags, for instance, San Francisco is encouraging stores to switch to cornstarch-derived plastic bags, which break down in about a month and release no harmful chemicals. And many stores have started to encourage shoppers to bring reusable cloth bags, or to offer them for sale at a cheap price.
Paper.com recently introduced a Green Store on site that carries all the popular 'earth friendly' paper grades.
SMART Papers Modernizes Synergy Writing, Text And Cover Brand With New Colors, 100% PCW Fibers And FSC-Certified Papers
Synergy is the fifth major brand improvement by SMART Papers in the last year, underscoring the U.S. premium papermaker’s expanded commitment to designers and printers who specify writing, text and cover papers. The company’s other brand upgrades are Genesis, Pegasus, Carnival and Passport.
SMART Papers is the largest independent North American manufacturer and marketer of premium cast coated, matte coated and uncoated printing papers. Synergy, with hundreds of options combining colors, textures, weights and sizes, is one of the company’s many high-quality uncoated brands. It provides graphics professionals a contemporary color palette, distinctive finishes, cotton sheets and environmentally responsible options.
sheet. Weights range from 24-pound writing, 70- to 100-pound text and 80-pound cover to 130-pound double thick cover.
Synergy is also meeting growing demand for environmentally responsible papers with a 92-bright White and elegant Natural, which are 100% PCW and FSC certified. These colors are available in seven basis weights, including two new cover weights and multiple sheet sizes. The remaining Synergy colors are manufactured with 30% PCW or 25% cotton fiber.
Synergy’s four new fashionable colors include the rich earth tones of Squash, Toffee and Sienna, as well as the cool, pale-blue Wisteria. The majority of the 16 colors, from 95-bright Pure White to Serious Black, are available in Smooth and Felt finishes. The new Squash and Toffee also are available in Linen.
Synergy’s elegant 25% cotton sheet is available in three colors, two basis weights and Smooth and Light Cockle finishes. The cotton sheets feature a random watermark with the universal recycled symbol.
The Smooth and Laid text finishes and 25% cotton sheets are guaranteed to run on copiers, laser and inkjet printers. All sheets are acid free and archival, process chlorine-free and elemental chlorine-free.
Selected Synergy cover stocks are certified for use on HP Indigo presses and available through the recently announced i-Xpress for HP Indigo Paper Program. The HP Indigo-compatible sheets are available for shipment within eight business days from date of order. Minimum order is two cartons.
Synergy applications include annual reports, invitations, stationery, brochures, packaging, craft and hobby, greeting cards, business cards, pocket folders and hang tags. Envelopes are also available.
Paper.com has all the Smart Paper items, in stock and ready for immediate shipment.
SOURCE: SMART Papers
South American Paper Industry
No signs of a looming surge in South American white paper exports.
There are only 2 major Latin uncoated white paper producers:
International Paper and Suzano.
Both are focused on producing for the local (Brazil) and regional (South America) markets. All other Latin players are focused on expanding market pulp capacity for exports. A constant message was, "produce pulp in low-cost locations, produce paper close to the customer."
The falling US$ has been "good news/bad news" for many Latin companies.
The bad news? Most firms produce US$-denominated commodities, typically with most costs in local currencies. Thus, as the Brazilian and Chilean currencies have appreciated, production costs have risen in US$ terms. The good news? The Latin producers still enjoy among the lowest costs in the world. At the same time, rising currencies and other issues are forcing high-cost producers in Canada & Europe to shutter capacity. This is resulting in higher-than-expected prices.
Smart Labels
by Leah Genuario
Smart label sales are expected to double from the 2006 estimate of 5,000 million units to 10,000 million units by 2011, according to Labels, a study published in December 2007 by The Freedonia Group. The study defines smart labels as devices capable of incorporating data and manufactured with read/write capabilities. It places emphasis on RFID labels, stating that the technology “promises to revolutionize applications from supply chain and inventory management to health care, libraries and air travel.” In addition, “dramatic gains are thus expected, both in extant and emerging uses.”
Quebecor World Signs Contracts
That turnaround faces a treacherous road, for now. Quebecor World has opted to close its Maggot, Quebec facility. The plant produced magazines and retail inserts for the U.S. and Canadian markets. About 300 full-time jobs will be lost, including 200 positions already on temporary layoff, which will be made permanent.
They received final approval for US$1 billion debtor-in-possession (DIP) financing. The financing is comprised of a term loan of $600 million and a revolving loan facility of $400 million.
In other company news, Quebecor World has been awarded a new contract with The McGraw-Hill Companies extending into 2014. The new agreement is valued at approximately US$285 million over its term and covers a wide range of educational textbooks, ancillary products, professional learning tools and catalogs.
The printer’s Magazine Group signed renewal and new business agreements that will add 33 new titles to the company’s Targeted Publications platform. Included is a multi-year agreement to print 16 magazine titles for Meister Media Worldwide, a leading agricultural publisher based in Cleveland. The printer also secured a new multi-year pact to print 100 percent of a nine-title portfolio of magazines published by Stamats Business Media of Cedar Rapids, IA.
Other pacts include a multi-year renewal agreement with Affinity Group to print all of the publisher’s 30 magazine titles. Quebecor World also reached a multi-year deal to print two weekly magazines for Amos Publishing of Sidney, OH—Coin World and Linn’s Stamp News.
However, its own parent, Quebecor Inc., may switch to another printer to handle some of its magazine titles. Publications TVA, Quebec’s largest consumer magazine publisher, is considering entering into printing agreements with rivals of Quebecor World for a handful of publications, says a Quebecor spokesman. The spokesman cited “practical and logistical reasons” being mulled. No decision has been made, and the vast majority of TVA publications will continue to be printed by Quebecor World.
Thursday, April 03, 2008
U.S. Forest Service Survey Reveals Positive Impacts
Forest Service data confirms that United States forestland is roughly as abundant today as it was 100 years ago. The Forest Service’s Resource Planning Act 2007 (RPA) data reveals both state and regional increases in forestland across the country.
Key findings in the report -
There are 750 million acres of forestland in the U.S. today, about the same as in 1907.
11 states had increases of more than 25 percent over the last century, nine had increases of in excess of 30 percent.
Overall, forestland in the northern U.S. has increased by nearly 30 percent.
Pulp Mills Boost Prices ….. Again
Coated FreeSheet market Update
NewPage / 2,235 / 40%
SAPPI / 1,390 / 25%
Verso / 595 / 10.5%
Appleton / 315 / 5.5%
Tembec / 310 / 5.5%
This market continues to be very tight. The producers have consolidated and rationalized assets with shuttering equipment to generate operating rates of 98%. Demand is actually down nearly 6%.
Marcal Paper Mill Purchased by Fund
Staples ends Relationship with Asia Pulp and Paper
Fraser curtails two Paper Machines
Printing Sales up in 2007
UNCOATED FREE SHEET Market Update
COATED GROUNDWOOD Market Update
White Birch Purchases SP Newsprint
Linerboard price hike flops
North American $50/ton containerboard price increase has failed to stick in March because of deteriorating demand for boxes, according to RISI, the forest products news service. All seven major containerboard mills had fallen in line with the price hike but this month’s buyer surveys by Purchasingdata.com confirm that the market price average for 42-lb Kraft linerboard remains at $555.
RISI says there has been strong resistance from independent box converters, who believe they would be unable pass through any increase in finished box prices. Some linerboard producers may try again in April or May--although weak box demand and growing containerboard inventories in a worsening U.S. economy could make that difficult, says analyst Ross Gilardi at Merrill Lynch & Co. He says he expects box demand to remain weak for some weeks, “which could make it challenging for box producers to pass a price increase through to customers.”
Thursday, March 20, 2008
The Push for a Greener Industry
When the mayor of New York, a high-ranking city commissioner and other Big Apple bigwigs gather at the Empire State Building for a press conference, you can usually expect the announcement of some big public works project, such as a new skyscraper. What brought these dignitaries together, however, was a different sort of public works: a campaign to encourage recycling among the city’s 8 million residents, led by a $3 million advertising blitz that will put
posters on buses and subways, as well as commercials in movie theaters and on Time Warner cable channels.
Paper.com introduced a Green store last year http://paper.com/department/green/ with thousands of environmentally friendly products to support citizens that seek sustainable forest initiatives.
Uncoated Free Sheet Update
increase on cut-size paper for February.
Paper.com still has products available on site that have not been increased, subject to availability.
The declining North American UFS market – causes and future trends
The North American uncoated freesheet market used to be a high growth market. It consistently outpaced the growth in the economy by 1-2% per year as business copiers, home printers, faxes and a myriad of other end-uses expanded rapidly, fueled by technological development and plummeting prices for business machines.
This trend ended abruptly in 1999. Almost overnight, the uncoated freesheet market morphed from a profitable high-growth business, to one that has been plagued by declining demand and lackluster profitability. It took the industry years to recognize the change in trend, and chronic oversupply dampened profitability in the market.
What Caused the Market to Decline?
There were two broad factors that led to the decline in the market:
1. The loss of print markets to electronics
2. The loss of market share to alternative grades of paper
When discussing the decline in the uncoated freesheet market, most people refer to the primary cause as the shift to electronic technology.
This was indeed the primary driver behind the declines in demand for tablet, envelope, stationery, carbonless paper, technical papers and form bond.
However, a very important and often overlooked fact is that a third of the market share loss since 1999 was caused by a shift to alternative grades of paper. The introduction and successful growth of uncoated mechanical offset substitutes in particular has displaced about 840,000 tons of uncoated freesheet demand in North America since 1999. Furthermore, the rapid growth of cheap, mostly Asian, coated sheets has also displaced about 250,000 tons of uncoated freesheet sheets, mostly in the “cover, text and bristol” category.
Major Newspapers continue 4-Year Decline
four years among the leading papers.
Hewlett Packard adds Inkjet Printer to Products
a wide format inkjet press.
The Indigo 7000prints 120 four-color pages a minute, while the inkjet press can print newspapers, books and signs.
The Indigo Press models have captured 49% of the entire digital press market share for high volume business. Xerox’s IGen has 36%, and Kodak’s NexPress enjoys 15%.
Paper.com has an entire section on site with all the major digital and inkjet paper grades.
U.S. cotton prices are surging ahead
U.S. cotton prices are rising this month, as global prices are the highest in a decade because world demand is exceeding supply for the second consecutive crop season. The Cotlook A Index of world cotton prices has averaged 70¢/lb so far in 2007-2008 .The price average is 11¢ higher than during the first seven months of the previous year.
As a result of the gap between world production and consumption, world cotton ending stocks are projected to decline this crop season by 9%, or 1.1 million tons, to 11.5 million tons. But some analysts say it could slide as low as 10.7 million tons, further boosting spring and summer prices.
What does this mean for Paper? All our premium 25-100% cotton grades are directly affected by this increase in cost for this fiber. Paper.com tries to maintain level prices, but when raw material costs escalate like this, it becomes nearly impossible
Tuesday, March 04, 2008
Paper Mills close and Paper Demand decreases
printed material more expensive. Even FSI (Free Standing Inserts – those promotions you get in the newspaper) have declined 5% from 2006. One expert commented that even Television advertising is no longer a leading influencer and loosing its effectiveness.
Most paper prices have increased; this certainly has not assisted with demand. One comment on all the sudden paper price increases is these advances have not kept up with the cost increases for such expenses as fiber, energy, shipping and chemicals. Look for more paper price increases and less paper consumed in 2008.
One industry expert stated that although demand for paper is decreasing approximately 2% a year, the producers are shuttering 6% of capacity each year.
Paper Industry continues to see GREEN Initiatives
In another news related event, Domtar recently shipped a newly developed specialized lightweight bible paper that is FSC Certificated. RRDonnelley will publish the bible for publisher Thomas Nelson. This is the first FSC bible.
NewPage confirms Plans for mills
No11 Paper Machine – Rumford, ME will close permanently
No 43 and 44 and pulp mill in Niagara, WI will be closed permanently.
No 95 in Kimberly, WI will be permanently shut down
Converting mill in Chillicothe, OH will be shut down permanently
Heidelberg outlines Growth by Printing Process
Flexography 5.5%
Combo sheet-web 5%
Digital 3.8%
Sheetfed 1.7%
Coldset Web 1.3%
Heatset Web .12%
Update on Coated Publication Groundwood Papers
expected to follow. The current market is very tight, with backlogs of 10 to12 weeks.
We reported prices rose $30-60/ton in January. The price on 40# LWC have risen $190/ton between June of 2007 and January of 2008.
Thursday, February 28, 2008
US Pulp and Paper Industry Posts 4Q Results
RR Donnelley Fourth Quarter Loss Widens
2007 Reduction in Uncoated Capacity
Inter’l Paper Pensacola, FL 350,000
Dirigo Gilman, VT 70,000
Georgia Pacific Wauna, OR 110,000
Boise Wallula,WA 135,000
Fraser Madawaska, ME 70,000
Domtar ME,WI,QC 240,000
Dryden, ON 315,000
Neenah Housatonic, MA 15,000
Urbana, OH 40,000
Wausau Groveton,NH 105,000
Valentine Lockport, LA 35,000
2007 total tonnage reduction 1,425,000 tons
Some Recent Notable Acquisitions
Domtar Weyerhaeuser 2007
Abitibi Bowater 2007
Investor Group St Marys 2007
PaperlinX Cascades 2006
NewPage StoraEnso NA 2008
Aldabra2 Boise from Madison Dearborn2008
Brookfield Longview Fibre 2007
Rank Blue Ridge 2007
International Paper Central Lewmar 2007
Neenah Fox River 2007
Atlas Finch 2007
Apollo / Versa Int’l Paper coated 2006
Glatfelter NewPage Carbonless 2006
Koch Georgia Pacific 2005
Kohlberg Inter’l Paper Industrial 2005
Mohawk Inter’l Paper Specialty 2005
Smart Paper Fraser Wisconsin mill 2005
China’s Paper Industry continues to Grow
White Birch Completes Acquisition of SP Newsprint
Note on Newsprint market: AbitibiBowater announced another $60/ton price hike increase for the second quarter. Just like the $60/ton increase for the first quarter
Wednesday, February 20, 2008
Another Wave of Price Increases
Note: demand for uncoated is actually weaker; however, the market remains tight because capacity is shrinking (reduced by 1.4Million tons in ‘07), with further capacity reduction scheduled in 2008.
Publication Papers to Increase in Price
Shipment volumes rose 11.5% this December versus 2006 (+2.9% YTD).
Packaging Grades also see Increased Pricing
The 7 largest producers (75% of North American market) have announced a $50/ton price hike for early March. Inventories remain lean, operating rates are high, and fiber costs are rising. The big obstacle will be making a containerboard price hike "stick" in the wake of sluggish box demand. December 6.8% drop in box shipments appears an "overstatement" on the downside, but it does raise a yellow caution flag. Smurfit-Stone plans to install six new
corrugators (one per month) in the first half of '08 to create "super" plants, which will be capable of replacing as many as 2-3 existing plants.
Wednesday, February 13, 2008
Saving Money on that Printed Piece
-Adjust the size of your printed piece to a common press size – using irregular designs, even if you are off ¼ inch will cost you money
-With over 40,000 printers in USA it important to research and negotiate with the printer that have the proper equipment and a history of dealing with jobs similar to yours.
-Coordinate printing with other departments in your company – awarding more work to one printer allows you more leverage
-Split up and evaluate each piece of the job, printing and distribution equates to half the
cost of the job, paper, the other half. You may be better supplying paper to the printer. Web sites such as www.paper.com has over 35,000 papers all at competitive pricing. They will ship directly to your printer.
-Consider a lighter weight paper if piece is to be mailed.
-Do not be afraid to work with a printer away from a major city; printers farther away are generally more economical and produce excellent work.
-Ask about the different types of printing –digital, offset, letterpress, and flexography all generate different results at different prices.
-Talk to several printers for competitive bids, remember, the cheapest bid may not produce the best results – but a minimum of 3 bids keeps everyone honest.
AbitibiBowater sells Snowflake Mill
Tuesday, February 12, 2008
Paper.com as one of the World’s Largest Paper Websites Introduces Environmentally Friendly Papers
The site boosts to have the greatest assortment of ‘green papers’ and they are all available for immediate shipment and offered at competitive prices.
The website has nearly 50 vendor warehouses throughout the United States and ships within 24 hours after receipt of order – from a single sheet of paper to multi truckloads. The site now enjoys nearly 8000 unique visitors every day clicking onto www.paper.com
The company has recently made the list of top 500 retail websites in USA as reported by Internet Retailer.
Fraser Shutters Paper Making Equipment in New Hampshire
The mill is curtailing production of commodity freesheet paper grades on two paper machines starting April 13. Production on another machine at the mill was suspended late in 2007, as reported by Paper.com. The company said it expects to continue operating two of the five paper machines in Gorham that produce specialty printing papers, namely principally light-weight opaque papers, and industrial towel.
Stora Enso Converts Paper Machine
UPM to Cut Newsprint, Magazine Paper capacity
-Closure of Miramichi Canada – 450,000 tons magazine papers
-Temporary shut down newsprint machine in Kajaani, Finland and one in Steyrmuhl, Austria -250,000 tons
- Temporary shut down machine in Jamsankoski and one in Tervasaari (both in Finland) – for reduction in label papers
Domtar to Close Port Edwards mill and Reduce Dryden Capacity
Friday, February 08, 2008
Clinton Outspends Obama on Printing
NEW YORK—When it comes to spending dollars on printed products during the last three months of 2007, Hillary Clinton stormed past Barack Obama, according to Federal Election Commission statistics. Clinton’s printing costs came in at roughly $1.3 million while Obama registered nearly $710,000.
Curiously, the leading candidates vying for the Democratic presidential nod swapped places on postage expenses: Obama’s receipts totaled roughly $1 million while Clinton spent $332,000. The former First Lady did triumph via a lower Verizon phone bill: $14,000 to Obama’s $70,000.
Thursday, February 07, 2008
Newspapers continue to feel the Pressure
Newspaper executives have done a poor job adopting to the Internet and being more creative on generating revenue. Perhaps the only savior now is the migration of newspapers now offering news on the Internet and joining the online world.
As reported in so many past news releases on our site, Newsprint, the paper used for newspapers, continues to decline in demand.
Smart Papers reintroduces Carnival Paper Grade Line
Paper.com markets the entire Smart Papers line, from the new selection of Carnival grades, to the popular Kromekote and scrapbooking grades and environmentally friendly Genesis line.
Thursday, January 31, 2008
Valentine Paper Closed
Catalyst Paper Extends mill Shutdown
USA Shipments of labels up
Broadband Connection a long way from 100%
Monday, January 28, 2008
2008 Printer Cost Increases
Printers. The following are forecasted increases-
Prepress Consumables / Plates 4%
Ink 4.5%
Paper 5.5%
Wages/Salaries 3%
Employee Health Benefits 8.5%
Property / Casualty Insurance 2.5%
Energy / Utilities 6%
2007 Market Share per Printing Press Process (sales dollar)
Gravure 15%
Flexography 21%
Letterpress 1%
Screen 2%
Hybrid Press 3%
On Press Digital 17%
Source: PrintCom Consulting
Hottest Potential markets for Printers in 2008
Banking and Insurance 2008F Print Revenue-$13.4billion
Medical/Pharmaceuticals 2008F Print Revenue-$12.1billion
Packaging Goods 2008F Print Revenue-$11.3billion
Computer Software 2008F Print Revenue-$11.1billion
Real Estate 2008F Print Revenue-$11billion
Beverage 2008F Print Revenue-$8.8billion
Automotive 2008F Print Revenue-$8.8billion
Fashion 2008F Print Revenue-$8.7billion
Telecom 2008F Print Revenue-$8.7billion
Source Printing Impressions
Coated Groundwood Continues to see Strong Demand
Prices for these grades rose $30-60/ton this month resulting in a total of $190/ton total increase from June 2007. Shipments rose nearly 3% for the year.
Friday, January 25, 2008
Harry Potter Author Refuses Non-FSC Paper
Guess she should have come to Paper.com, the site has many FSC sources and grades to choose from.
Quebecor World Files for Protection
Newsprint Continues to Plummet
End user inventories also decreased 16,000 tons for newspaper publishers and mill operating rates fell to 94%. Further, exports from North American producers fell over 25% - most likely because of the weak dollar – but I’m sure lower demand was also at play.
Recall, Paper.com has reported that many North American paper mills over the past several years have shuttered equipment thus reducing supply. Good news for producers is the $60/ton increase for this quarter will most likely hold and the $25/ton announced last quarter did hold.
Wednesday, January 23, 2008
Because of Niches, Magazines Still Strong
Newspaper publishers fret that younger readers go online for their news, but magazines continue to command loyal audiences, many of them young. "There are more magazines than ever before," said Samir Husni, a journalism professor at the University of Mississippi known as "Mr. Magazine" with a Web site dedicated to the subject. "There are more specialized magazines
today than there were in the mid-1960s." Husni said magazines have changed, most notably with the demise of "the 800-pound gorilla," he said, referring to general-interest magazine.
(For more information, please see)
http://www.foliomag.com/2008/because-niches-magazines-still-strong )
Tuesday, January 22, 2008
Boise starts up p-s papermaking machine
Boise Paper completes the startup phase Jan. 16 of its $80-million capital investment to expand production of pressure-sensitive papers.
The project adds new capability to the existing 250-in., #3 paper machine in Wallula, WA, with state-of-the-art equipment that increases p-s paper capacity by 200,000 tons. Proprietary technology provides Boise with the ability to produce C1S face stocks and release liners while continuing to produce a range of uncoated products, the company says.
“We’re now achieving our operating and quality targets for the production of coated label and release products while continuing to meet targets on existing uncoated free sheet products," says Alexander Toeldte, executive vice president, Paper, Packaging & Newsprint.
MPA: Mags Must Adapt Or Die
That's according to John Griffin, the president of the National Geographic Group and the new chairman of the Magazine Publishers of America. Speaking at the University Club in New York, Griffin said one of the keys to success in the Internet era is more precise measurement of the
audience's size, characteristics, and engagement with specific magazines. This will help level the playing field with the Internet, where digital technology allows a variety of measurements seen as more precise by media planners. (For more information, please see
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=74492
)
Monday, January 21, 2008
Wal-Mart Cuts 1,000 Magazines From Its Stores
Wal-Mart, which has more than 4,000 U.S. stores, is cutting more than 1,000 magazines from the list of titles it will sell. Some of the country’s most popular titles are being axed, including The Economist, BusinessWeek, The New Yorker, Forbes and Fortune. Wal-Mart accounts for more than 15% of total U.S. magazine retail sales.
Prices up for Uncoated Office Papers
Newsprint Finally sees a Positive
roughly $200/mton above USA.
Trade reports suggest that producers may attempt for $60/ton increase for the first half of 2008. Finally, all the shuttered Newsprint capacity may just be paying off for the producers.
The Economy
* The economy is at a slowing point with the potential for recession.
* The collapse of the subprime mortgage market not only will cause devaluation of home values, but also has negatively affected consumer spending.
* The team expects the Federal Reserve Board to cut interest rates several times to combat the mortgage issues. The rate cuts could affect inflation and cause the U.S. dollar, already at historic lows, to go lower.
* Energy prices will continue to be extremely volatile. A growing trend toward energy efficiency has not helped to lower energy prices as yet.
* A lively presidential election year with diverse and polarizing candidates may create political instability and hinder business and consumer spending.
Federal Report: Manufacturers Face Rough Times Ahead
-Retailers, homebuilders and many manufacturers (such as paper) should brace for even more rough times ahead, a somber.
- Federal Reserve suggests amid growing fears that the U.S. might be sliding into recession.
-Fed's snapshot of business conditions showed a national economy losing momentum heading into the New Year.
- Labor Department reported that U.S. consumer prices rose in 2007 at the fastest pace in 17 years; by 4.1 percent, as motorists paid a lot more for gasoline and food.
-Many banks reported losses and said people were having trouble making payments for everything from credit cards to cars.
- Stocks were mostly down for 2008.
-Beginning of last year, many economists put the chance of a recession at less than 1-in-3; now an increasing number say 50-50.
-Retailers suffered their worst sales season in five years in 2007.
-Risky ''subprime'' mortgages continued to sock financial institution.
Federal Reserve Chairman Ben Bernanke pledged to aggressively cut a key interest rate.
-White House and the Democrat-controlled Congress are exploring ways — including the possibility of temporary tax rebates — to get money quickly into the hands of consumers and help stimulate spending.
-Nation's unemployment rate went from 4.7 percent in November to 5 percent in December.
- Consumer confidence fell in January to its lowest point in figures dating back to 2002.
Pulp Market Review
-Pulp prices have been rising steady over the past decade to today’s highest prices in 10 years.
-December 2007 price
NBSK $880/MT includes Dec2008 increase - which met with no resistance
Southern Pine $840/MT
Northern Hardwood $790/MT
BEK $800/MT
-Inventory remains steady for year at 32 days
-Market Pulp demand for 2007 is $52million up 2.5% from 2006
-China continues to grow their demand for pulp
-Hardwood fiber supply down given mill closures and transfer of production
-Softwood demand flat
-Look for First quarter of 2008 to be slow
-USA recession
-Europe slow as well
-Continued cost pressure on pulp producers – energy, freight, and wood chips
-Watch for Finland labor agreement, contracts up in April – big pulp producer
Coated Publication Grades Stronger
NewPage-Stora Integration Costs Jobs
Four paper machines are being closed down permanently at facilities in Rumford, ME; Niagara, WI; and Kimberly, WI. Its Chillicothe, OH, converting mill will be shut down and its equipment relocated to a pair of plants. In all, 664 positions are being impacted.
Despite the reductions, NewPage expects to increase its North American production between 3 percent and 8 percent in 2008 compared to the combined production realized in 2007.
Quebecor World Hopes to Survive
This large North American printer has been attempting to iron out conditions of the $400 million rescue financing agreement reached with parent company Quebecor Inc. and Tricap Partners.
Tuesday, January 08, 2008
Recycled paper fun Facts for 2007
-USA paper industry plants 5 new trees for every American, each year.
-USA forest has increased 39% since 1952
-A recycled fiber can only be used 5-10 times before it becomes too
weak to include in production of quality paper
-If 100% of paper production were made from 100% post consumer paper – the world would only be able to produce paper for 6 months
before running out of fiber.
-Note: some paper – books, tissue, and archived documented are seldom or never enter the recycle stream for fiber.
-USA has 873billion acres of land that are used solely for production of commercial products – only 2% are used to harvest trees each year.
-USA pulp and paper manufacturers plant two trees for every one
taken for production.
-Paper.com recently introduced a “Green” store filled with thousands of environmentally friendly papers.
Thursday, January 03, 2008
Total Printing/Writing Paper Shipments Up 0.9%
Overall U.S. printing/writing paper shipments increased 0.9% in November compared to the prior-year period, according to the Pulp and Paper Products Council (PPPC). Year-to-date, total shipments declined –0.9%. Coated mechanical shipments were down –0.8% from the previous November, yet rose 5.2% year-over-year. Coated freesheet shipments fell –1.1% for the month and –3.7% year-to-date compared to the prior year. Uncoated freesheet shipments dropped –3.5% in November and –4.3% year-over-year.
Cenveo to Buy Rex Corporation
Wausau Reports on Recent Survey for Bright Colored Papers
Most bright colored stock is used for flyers, card stocks, covers, brochures and newsletters.
Paper.com sells the Astrobrights as well as the comparable products
Such as Bright Hue from Mohawk and Smart Brights.
Wausau Papers Introduces New Grades
The company also introduced Crinkles, a grade designed to appear like a handmade sheet for the crafters and Scrapbookers. This grade is suitable for laser printers, it is available in 10 earth colors, and is acid free / lignin free. Paper.com markets all the Wausau grades and most items ship same day.
