Notes from article By Dinesh Ramde, Associated Press Writer
It's a scene that has played out in small paper towns from California to Maine. The number of jobs in the domestic paper industry has shrunk about 20 percent in recent years as costs rise and imports become cheaper. Demand all around has been dampened by the slow economy as well as the shift of eyeballs away from the printed page toward the screens of PCs and cell phones.
The state of Wisconsin still has more jobs in the paper industry than any other state, mainly because of its proximity to vast rivers that supply millions of gallons of water for the treatment of wood pulp. The state had about 35,500 paper-industry jobs in 2007, down 26 percent from the 48,000 jobs it had six years earlier. Nationwide about 117,000 jobs have vanished in that span, according to data from the U.S. Bureau of Labor Statistics.
After Wisconsin, the next largest paper employers are California and Pennsylvania with about 28,000 jobs each in 2007, followed by Illinois and Ohio with about 24,000 each. Each figure represents a decline of about 20 percent from 2001.
Tuesday, September 16, 2008
Thursday, September 11, 2008
Magazine Ad Pages Down
The consumer magazine business is a disaster!
Total magazine ad pages measured by the Publishers Information Bureau are down 9.2% through August, compared to the same period last year. Virtually all the major publishers are feeling the pinch. Of 37 big publishing groups measured by TNS Media Intelligence, 32 or 86% have seen ad pages fall. For the 32 publishers that are experiencing declines, the average decline was 14% for the year-to-date.
Total magazine ad pages measured by the Publishers Information Bureau are down 9.2% through August, compared to the same period last year. Virtually all the major publishers are feeling the pinch. Of 37 big publishing groups measured by TNS Media Intelligence, 32 or 86% have seen ad pages fall. For the 32 publishers that are experiencing declines, the average decline was 14% for the year-to-date.
Wednesday, September 10, 2008
UPM continues restructuring measures
UPM continues actions to secure its profitability in a business environment of slow growth and rising costs. UPM plans to close its least competitive paper and pulp capacity in Finland as well as to streamline operations in all business groups.
The planned actions to close capacity would improve UPM's cost competitiveness
The planned actions to close capacity would improve UPM's cost competitiveness
Verso Paper Machine at Bucksport to Lightweight Paper
Verso Paper Corp.
announced that it will begin transitioning the No. 1 paper machine at its Bucksport Mill, in Maine, to manufacture specialty papers starting on September 22. With this move Verso will begin supplying value-added specialty papers to customers, which leverage Verso's core coating and
lightweight paper production techniques. Once fully transitioned, this change will reduce Verso's coated groundwood production capacity by 84,000 tons per year.
announced that it will begin transitioning the No. 1 paper machine at its Bucksport Mill, in Maine, to manufacture specialty papers starting on September 22. With this move Verso will begin supplying value-added specialty papers to customers, which leverage Verso's core coating and
lightweight paper production techniques. Once fully transitioned, this change will reduce Verso's coated groundwood production capacity by 84,000 tons per year.
Tuesday, September 09, 2008
Hewlett Packard Announces Green Policy
Hewlett Packard announced a new policy for vendors that supply the more than 300,000 tons of paper HP purchases for retail. The suppliers must now market only certified papers with recycle content.
United States Postal Service talks about Environmentally Friendly Initiatives
The USPS recently issued a promotional brochure, Environmailism, which offers helpful insight to producing environmentally friendly direct mail pieces.
-Ask for the highest recycled content available for the grade of paper you are interested in
-Many grades are available from 30 all the way to 100% recycled, or even tree free.
-Print on lightest paper possible
-Ask for papers made of alternative fiber – tree free, cotton, etc vs. trees
-Design piece smaller to use less paper
-Seek inks that are not petroleum based – such as Soy based
-Opt for less ink coverage on printed promotion
-Print on both sides and use less paper
-Reduce run to exact match of material you need – watch for waste
-Be sure size of promotion matches paper sheet size and press size
-Merge and purge mailing list – remove invalid names
-Provide for opportunity for customer to opt out
-Maintain ‘do not mail’ list
Remember, you can always visit or call the paper expert at Paper.com for suggestions of paper from their new Green Store
-Ask for the highest recycled content available for the grade of paper you are interested in
-Many grades are available from 30 all the way to 100% recycled, or even tree free.
-Print on lightest paper possible
-Ask for papers made of alternative fiber – tree free, cotton, etc vs. trees
-Design piece smaller to use less paper
-Seek inks that are not petroleum based – such as Soy based
-Opt for less ink coverage on printed promotion
-Print on both sides and use less paper
-Reduce run to exact match of material you need – watch for waste
-Be sure size of promotion matches paper sheet size and press size
-Merge and purge mailing list – remove invalid names
-Provide for opportunity for customer to opt out
-Maintain ‘do not mail’ list
Remember, you can always visit or call the paper expert at Paper.com for suggestions of paper from their new Green Store
Pulp Market Update
Notes from session with Mark Wilde of Deutsche Bank and Brian McClay of TerraChioce
-Pulp buying and thus demand lowered considerably in last several weeks, especially in China, and as market pulp output and producers’ stockpiles continued to rise, particularly for hardwood grades.
-Pulp demand was also considerably lower in most other world markets rejecting increased paper mill market-related downtime
-Global pulp demand will continue to be weaker than normal through year-end, well below pulp supply, as papermakers in virtually all regions curtail production on a temporary basis to better match supply with slowing demand, and as more permanent paper mill closures in the US and Europe take effect.
- Pulp prices will continue to fall until enough capacity is removed to re-establish market balance early in 2009 for softwood and later next year for hardwood grades.
- Another 1.6 million tons of capacity to come on stream around the world in 2009 followed by more than 2 million tons each in 2010 and 2011, virtually all of it hardwood
-These declining price levels should trigger significant closures in North America, particularly in Canada, perhaps approaching 2 million tons over the next 6-9 months,
with most of that softwood pulp. Possibly 2 million tons taken out of European pulp production as well. High cost facilities will be first to go.
- A slowing economy combined with permanent market share losses to online and other lower-cost alternative media pushed US print activity to a 21-year low in North America
--Non-national metro dailies, will start going out of the print business altogether.
-Pulp buying and thus demand lowered considerably in last several weeks, especially in China, and as market pulp output and producers’ stockpiles continued to rise, particularly for hardwood grades.
-Pulp demand was also considerably lower in most other world markets rejecting increased paper mill market-related downtime
-Global pulp demand will continue to be weaker than normal through year-end, well below pulp supply, as papermakers in virtually all regions curtail production on a temporary basis to better match supply with slowing demand, and as more permanent paper mill closures in the US and Europe take effect.
- Pulp prices will continue to fall until enough capacity is removed to re-establish market balance early in 2009 for softwood and later next year for hardwood grades.
- Another 1.6 million tons of capacity to come on stream around the world in 2009 followed by more than 2 million tons each in 2010 and 2011, virtually all of it hardwood
-These declining price levels should trigger significant closures in North America, particularly in Canada, perhaps approaching 2 million tons over the next 6-9 months,
with most of that softwood pulp. Possibly 2 million tons taken out of European pulp production as well. High cost facilities will be first to go.
- A slowing economy combined with permanent market share losses to online and other lower-cost alternative media pushed US print activity to a 21-year low in North America
--Non-national metro dailies, will start going out of the print business altogether.
Capital Spending by Paper Industry expected to Drop
Lack of demand and pressure on profitability has forced paper companies to limited spending on capital expenses. Most mills will only spend on projects which reduce energy consumption, restructure equipment to product more value added grades, or modify equipment to manufacture a different product mix
Monday, September 08, 2008
Deluxe to Close Three Plants, Cut 570 Jobs
Deluxe Corp., a printer of bank checks, is closing three manufacturing facilities and a call center, resulting in the loss of 570 jobs. The company said it will close its North Wales, PA manufacturing plant and its Thorofare, N.J. manufacturing plant and call center in the first quarter of 2009. The Greensboro, NC manufacturing plant will be shuttered by the end of next year.
Print Catalogs Remain Primary Sales Channel
A survey conducted by the Direct Marketing Association revealed that the print catalog remains the largest revenue generator amongst all channels, accounting for nearly 50% of total sales in both 2007 and 2008. Results of the 106 multichannel merchants polled showed that 62% consider catalogs their primary sales channel. Only 20% of those polled cited the Web as their primary channel and just 6% said retail was. Of those respondents surveyed, 59% indicated that they have increased circulation, while 15% reported no change. Additionally, 44% of the merchants reported increasing page counts and 42% reported no changes at all in pages.
New York Times Saves on Paper
New York Times just announced it will begin to combine sections of the paper to save on costs. As an example, the paper's metro section will become part of the paper's A section - which is National and International. The sports section will be combined with the business section, during the week days. These combined sections will start in early October. Like so many newspapers, the New York Times finances have worsened and they must reduce costs in various ways, including reduce page sizes and number of pages, as well as shrinking their staff.
The paper will save several million dollars with this recent move.
The paper will save several million dollars with this recent move.
Friday, September 05, 2008
Wausau Papers Modifies Ice Line
The Exact Ice paper line has added a 100pound cover and is now available in 7 text and cover weights, including 50, 60, 70, 80 and 65, 80, and now 100 pound cover.
Paper.com will be marketing this grade once inventory levels are satisfied.
Paper.com will be marketing this grade once inventory levels are satisfied.
Many Newspapers Reduce Paper Consumption
In an effort to survive and save money, newspapers are now transitioning their paper from the standard 30pound (48.8gsm). As many as 70% of the newspapers are now ordering 45gsm. Large publisher, Gannett confirmed it saved $7.5million by reducing basis weight and they are now evaluating 42.5gsm. Many forecast that within 24 months, everyone will consume 45gsm and this will now be the standard.
Hazen Paper Purchases old Neenah Mill
Hazen Paper of Springfield, MA reached an agreement to purchase the Housatonic, MA plant from Neenah (this mil was acquired by Neenah as part of the Fox River purchase). Hazen specializes in film and foil laminations, gravure printing, embossing, and coating as well as security tickets, tags, and labels. No mention of status on the one paper machine at location.
Unisource Implements Fuel Surcharge
Paper, packaging and facilities supplies distributor Unisource Worldwide will institute a fuel surcharge due to the rising cost of diesel fuel. The company had been able to offset the fuel increase by maximizing delivery routing and truck fleet utilization.
Unisource will now institute a fuel surcharge per line item to all orders shipped from its warehouses and orders received through Unisource’s Website will receive a flat surcharge per order.
With gas prices increasing costs to every vendor that delivers, Paper.com firmly believes that paper sales on the internet will grow at an even faster pace. The site has over 40,000 items and ships the majority of orders within 24 hours.
Unisource will now institute a fuel surcharge per line item to all orders shipped from its warehouses and orders received through Unisource’s Website will receive a flat surcharge per order.
With gas prices increasing costs to every vendor that delivers, Paper.com firmly believes that paper sales on the internet will grow at an even faster pace. The site has over 40,000 items and ships the majority of orders within 24 hours.
SMART Papers' Super-Luxury Kromekote Brand Achieves Important Environmental Milestone - Full FSC Certification
SMART Papers' premium cast-coated Kromekote is now fully Forest Stewardship Council (FSC) certified, giving corporations and graphics professionals immediate access to the most luxurious and environmentally responsible printing and packaging papers in the world.
Kromekote is the first triple cast-coated brand to achieve full FSC certification. The achievement represents another important advance for SMART Papers and its commitment to supply the widest range of FSC premium coated and uncoated printing and packaging papers in North America.
SMART Papers is North America's largest independent manufacturer and marketer of premium coated and uncoated printing papers. The company is currently building a new energy facility at its manufacturing center that will be fossil fuel free by late 2009, enabling all of the company's papers to be fully carbon neutral. "SMART Papers' carbon-neutral future will give customers total confidence they are getting the most environmentally responsible printing papers available from any U.S. paper manufacturer," said SMART Papers President Dan Maheu.
Ultra-glossy Kromekote is widely regarded by printers and designers as the "gold standard" in printing papers. Now, the brand sets a new "green standard" for premium environmentally preferable coated papers, with both FSC certification as well as papers with 30% post-consumer waste (PCW) fibers.
SMART Papers recently announced FSC-certification for its Kromekote Recycled products. Today's announcement expands the certification to encompass the rest of the brand including Kromekote Text and Cover, Folding Board, Colors and Metallics, Foils, Textures and Digital products.
SOURCE: SMART Papers
Kromekote is the first triple cast-coated brand to achieve full FSC certification. The achievement represents another important advance for SMART Papers and its commitment to supply the widest range of FSC premium coated and uncoated printing and packaging papers in North America.
SMART Papers is North America's largest independent manufacturer and marketer of premium coated and uncoated printing papers. The company is currently building a new energy facility at its manufacturing center that will be fossil fuel free by late 2009, enabling all of the company's papers to be fully carbon neutral. "SMART Papers' carbon-neutral future will give customers total confidence they are getting the most environmentally responsible printing papers available from any U.S. paper manufacturer," said SMART Papers President Dan Maheu.
Ultra-glossy Kromekote is widely regarded by printers and designers as the "gold standard" in printing papers. Now, the brand sets a new "green standard" for premium environmentally preferable coated papers, with both FSC certification as well as papers with 30% post-consumer waste (PCW) fibers.
SMART Papers recently announced FSC-certification for its Kromekote Recycled products. Today's announcement expands the certification to encompass the rest of the brand including Kromekote Text and Cover, Folding Board, Colors and Metallics, Foils, Textures and Digital products.
SOURCE: SMART Papers
Thursday, September 04, 2008
Printer Survey on Environmental Programs
The Printing Impressions Magazine just published a survey with results of many questions for environmental programs that printers are interested in. Of particular note,
we outline, in order of popularity, which environmentally friendly steps USA the printers actually implemented –
Purchasing paper containing post consumer (waste paper)
Purchasing FSC paper
Using environmentally friendly inks
Developing internal recycling programs
Recycling solvents
Purchasing more energy efficient equipment
Planting trees
Direct-to-press processless plates
we outline, in order of popularity, which environmentally friendly steps USA the printers actually implemented –
Purchasing paper containing post consumer (waste paper)
Purchasing FSC paper
Using environmentally friendly inks
Developing internal recycling programs
Recycling solvents
Purchasing more energy efficient equipment
Planting trees
Direct-to-press processless plates
Digital Printing Still Growing
Overall print sales for 2008 are expected to grow over 2%, with both toner based and inkjet leading the way. PIA/GATF released the following growth projections
-Overall growth. ..............2.2%
-Ink Based Printing ……...0.8%
-Toner/Digital Printing .….6.2%
-InkJet ……….....……………..6.0%
Most printers, although frustrated with increased paper prices, are generally optimistic about 2008 sales.
-Overall growth. ..............2.2%
-Ink Based Printing ……...0.8%
-Toner/Digital Printing .….6.2%
-InkJet ……….....……………..6.0%
Most printers, although frustrated with increased paper prices, are generally optimistic about 2008 sales.
Market Pulp Demand is Questioned
Although worldwide market pulp shipments for 2007 represented its sixth consecutive month of growth (40.4million tons), balance of 2008 may witness a steady or slight decline in demand. North American pulp mills shuttered 2.4million tons since 2005, and Pope and Talbot recently announced bankruptcy and will curtail 3 mills as well as Catalyst will close 200,000 facility.
NBSK, the benchmark grade, saw little change in price since the first half of 2008, with list price staying at $880/ton. Because many more paper making plants will continue to close due to poor economics and declining demand, this will result in less demand demand for pulp.
Top market pulp producers for North America include
Weyerhaeuser 2Million tons 9.7% market Share
Domtar 1.5million tons 7.5% market share
Canfor 1.4million tons 7.1% market share
Tembec 1.3million tons 6.3% market share
Georgia Pacific 1.2million tons 5.8% market share
NBSK, the benchmark grade, saw little change in price since the first half of 2008, with list price staying at $880/ton. Because many more paper making plants will continue to close due to poor economics and declining demand, this will result in less demand demand for pulp.
Top market pulp producers for North America include
Weyerhaeuser 2Million tons 9.7% market Share
Domtar 1.5million tons 7.5% market share
Canfor 1.4million tons 7.1% market share
Tembec 1.3million tons 6.3% market share
Georgia Pacific 1.2million tons 5.8% market share
Quebecor World begins Consolidation
Cash starved Quebecor World has announced it will consolidate divisions to become more efficient. It will integrate six divisions into three business units. The magazine, book, and directory divisions will become the Publishing Services Group. The US Retail, catalogue, Sunday magazine and direct mail will be combined to form Marketing Solutions. The Logistics and premedia groups will also combine.
The company also announced the sale of its European operations to Hombergh/De Pundert Group (HHBV) of the Netherlands.
The company also announced the sale of its European operations to Hombergh/De Pundert Group (HHBV) of the Netherlands.
Tag and Label Markets Continue to Grow
Times are tough for most paper markets, but the Tag and Label markets seem to be enjoying steady growth. Although these converters also share in the challenges of rising raw material costs, fierce competition, and a poor economy, but overall global growth has been steady at 4-4.5%. It is estimated that BRIC countries – Brazil, Russia, India, and China – will witness robust growth in future. The USA market is forecast to grow 5% annually, and reach $18billion by 2011. The pressure sensitive labels continue to account for the majority of this growth.
Top Label and Tag converters include
RR Donnelly
Avery Dennison
CCL Industries
Fort Dearborn
WS Packaging
Multi Color
Spear
Nashua Corporation
Standard Register
Hammer Packaging
Top Label and Tag converters include
RR Donnelly
Avery Dennison
CCL Industries
Fort Dearborn
WS Packaging
Multi Color
Spear
Nashua Corporation
Standard Register
Hammer Packaging
Wednesday, September 03, 2008
Another Major Coated Freesheet Maker Raises Prices
Verso Paper has announced an increase of $60 per ton for its Influence and Velocity coated freehseet paper grades, effective October 1.
Paper.com announced that NewPage did the same last week for nine of its brands.
Smart Papers Goes ahead with Co-Generation
As we previously reported, it is now confirmed that Smart Papers will build a 40MW co-generation system to produce both steam and electricity to operate the mill. This project will establish the site to be a zero process waste discharge facility and now generate carbon credits.
Paper.com markets the mill's premium cast coated, matte coated , as well as the uncoated text, cover, and writing grades. Many of these grades are Forest Stewardship Council (FSC) certified.
Paper.com markets the mill's premium cast coated, matte coated , as well as the uncoated text, cover, and writing grades. Many of these grades are Forest Stewardship Council (FSC) certified.
Magazine Industry Troubled
So far, 2008 has not been good to the magazine industry with an increase in postage, fuel, printing, ink, and paper costs. This, coupled with a recessionary economy. The hope is the recent olympics and a presidential campaign will assist a boost in readership. So far, pages and revenue as well as circulation are off significantly. To date, only 41 new magazines were launched (compared to 50 in 2007 and 72 in 2006).
This effects the paper industry in that consumption is also now down for publication coated grades.
This effects the paper industry in that consumption is also now down for publication coated grades.
American Eagle Mill continues to Grow
The American Eagle mill of Tyrone, PA, continues to enjoy sales growth. The mill is operated by a group of employees that purchased the closed facility from Westvacao in 2001. The plant now employs 265 workers and produces 90,000TPA of printing and converting grades. The product line includes 100% recycled, 50- 80pound, as well as 30% recycled reply card as well as envelope grades on two paper machines. The mill can produce 50-120pound uncoated grades.
Ordering Paper online Grows
International Paper's xpedx merchant division posted $1.4billion in ecommerce sales in 2007, for a 12% increase from 2006. Xpedx confirmed 5.8 million orders were conducted, or about half of the total xpedx sales.
Paper.com, with 40,000 items and nearly 60 distribution centers also outlined aggressive growth for 2007. Industry experts forecast this tend to continue.
Paper.com, with 40,000 items and nearly 60 distribution centers also outlined aggressive growth for 2007. Industry experts forecast this tend to continue.
Acacruz Plans Pulp Capacity Expansion in Brazil
Acacruz Celulose announced plans to build a pulp mill in Brazil. Management stated the completed facility will produce 1.4million tons of hardwood market pulp. The plant will be operational by 2015. Once complete, Aracruz will supply 25% of the world's market hardwood pulp, or, about 7 million tons per year.
Soporcel Installs new Cutsize Sheeter
Portuguese pulp and paper manufacturer, Soporcel, ordered two cut size converting and packaging lines from ECH Will and Pemco for the new paper mill under construction. The new equipment will produce 500,000TPA.
The Soporcel sheet is a worry-free copy paper that is one of the brightest on the market. Paper.com markets this sheet at approximately the same price as the lower brightness grades.
The Soporcel sheet is a worry-free copy paper that is one of the brightest on the market. Paper.com markets this sheet at approximately the same price as the lower brightness grades.
Climax Paper Plant Purchased
As previously announced, the purchase was completed for the Climax Paper facility in Loweville, NY last month for $6.9million. The mill produced heavy weight cover and converting grades on a cylinder paper machine.
MeadWestcavo Completes Sale of Specialty Papers Cedar Mill
MeadWestvaco Corporation announced it has completed the sale of its Specialty Papers Cedar mill in Potsdam, NY, to Potsdam Specialty Paper, Inc. (PSPI) on September 1, 2008. Terms of the agreement were not disclosed.
Tuesday, September 02, 2008
Kruger to Take Additional Downtime
Kruger announced it would take two more weeks of downtime on its 263,000 tons per year PM 4 at the Wayagamack mill starting September 1. The plans will remove approximately 10,000 tons of coated mechanical paper from the market.
Friday, August 29, 2008
White Birch to Increase US newsprint price by $60 per ton
North America's second largest newsprint producer, White Birch, told customers it would increase newsprint prices by $60/ton in the fourth quarter.
The hike follows an announcement by newsprint market leader AbitibiBowater last week that it would implement three monthly increases of $20/ton effective Oct. 1.
The new hike is the fourth $60/ton quarterly increase by North American newsprint producers this year.
Trade papers are reporting increased buyer resistance.
The hike follows an announcement by newsprint market leader AbitibiBowater last week that it would implement three monthly increases of $20/ton effective Oct. 1.
The new hike is the fourth $60/ton quarterly increase by North American newsprint producers this year.
Trade papers are reporting increased buyer resistance.
Wausau Paper Shut Down Otis Mill Machine
Wausau Paper will permanently shut down the #10 machine, one of the two paper machines, at the Otis Mill facility located in Jay, Maine on or prior to December 31, 2008 . Number 10 paper machine, with a capacity of 40,000 tons annually, presently serves the release liner market and a variety of smaller niche markets.
COATED GROUNDWOOD Market Update
The new coated market leader, NewPage, announced it will close Kimberly, WI mill by
Sept. 8. NewPage will also take two weeks of previously announced downtime at its Rumford, ME mill to rebuild a turbine.
Verso announced that it will take two weeks of downtime (13K/tons) in September at its Bucksport Mill in Maine.
UPM-Kymmene Corp. closed its two ground wood pulp and paper mills at Miramichi in Canada. The decision came almost eight years after UPM spent nearly $1 billion to buy the two mills
from Repap Inc.
The Finnish company closed the kraft mill in 2004, leaving 400 out of work.
Sept. 8. NewPage will also take two weeks of previously announced downtime at its Rumford, ME mill to rebuild a turbine.
Verso announced that it will take two weeks of downtime (13K/tons) in September at its Bucksport Mill in Maine.
UPM-Kymmene Corp. closed its two ground wood pulp and paper mills at Miramichi in Canada. The decision came almost eight years after UPM spent nearly $1 billion to buy the two mills
from Repap Inc.
The Finnish company closed the kraft mill in 2004, leaving 400 out of work.
Coated Freesheet Price Increase
North American coated freesheet (CFS) producers have told customers they will implement a $60/ton price increase on sheets and web grades effective October 1.
Suppliers that have announced include NewPage, Verso, Sappi, West Linn, Nippon and Appleton.
No mention, yet, for price increase for Groundwood coated publication products. US demand in the Groundwood market has not been as strong as free sheet.
Suppliers that have announced include NewPage, Verso, Sappi, West Linn, Nippon and Appleton.
No mention, yet, for price increase for Groundwood coated publication products. US demand in the Groundwood market has not been as strong as free sheet.
Falling Pulp Prices
Surprise Surprise, Pulp prices are finally coming down, after months of increases......
We hear reports that “spot” market discounts of 15-20% on pulp prices, especially for large orders.
The fundamentals have shifted - demand is slowing, shipment volumes have eased, and world producer inventories are up nearly 24%.
Faced with slow demand, many mills are reportedly pressing suppliers for downward price adjustments.
Pulp & Paper Week Index revised the July NBSK list price from $890/mton to
$885/mton and held it flat for August, largely ending pricing
momentum. Pulp prices appear to have reached a near-term peak.
We hear reports that “spot” market discounts of 15-20% on pulp prices, especially for large orders.
The fundamentals have shifted - demand is slowing, shipment volumes have eased, and world producer inventories are up nearly 24%.
Faced with slow demand, many mills are reportedly pressing suppliers for downward price adjustments.
Pulp & Paper Week Index revised the July NBSK list price from $890/mton to
$885/mton and held it flat for August, largely ending pricing
momentum. Pulp prices appear to have reached a near-term peak.
Newsprint prices boosted by $60/metric ton
by Tom Stundza
There has been an estimated 10.5% drop in U.S. newsprint consumption so far this year, yet list prices for the benchmark publication paper product are at $720/metric ton, a 12-year high. And now, the largest North American supplier, AbitibiBowater, has told customers the Montreal-based firm plans to raise prices by $20/month for the rest of the year, a move that would take newsprint prices to $780/metric ton in December. Newsprint is used to print newspapers, other publications and advertising material. North American newsprint shipments of 624,000 metric tons in June were 12.5% lower than a year ago and in line with an overall demand drop of 12.3%, the Pulp and Paper Products Council has reported to its members. Production at midyear was down 10.7% year-over-year and 9.2% year-to-date. Overseas shipments also were reported down so that North American mill inventories of 334,000 metric tons at the end of June were 26% lower than a year earlier. However, AbitibiBowater CEO David Paterson expects higher newsprint prices based on growth in newsprint exports. “Clearly, we'd expect the second half of 2008 to be better than the first half," Paterson tells reporters at the Reuters Paper Summit. Still, Paterson admits the company is facing resistance to price increases in North America and it is seeing an acceleration in demand declines due to its earlier pricing actions. Purchasingdata.com, for example, has yet to show transactions at $720 with the July average of $710 and the August average at $707.
There has been an estimated 10.5% drop in U.S. newsprint consumption so far this year, yet list prices for the benchmark publication paper product are at $720/metric ton, a 12-year high. And now, the largest North American supplier, AbitibiBowater, has told customers the Montreal-based firm plans to raise prices by $20/month for the rest of the year, a move that would take newsprint prices to $780/metric ton in December. Newsprint is used to print newspapers, other publications and advertising material. North American newsprint shipments of 624,000 metric tons in June were 12.5% lower than a year ago and in line with an overall demand drop of 12.3%, the Pulp and Paper Products Council has reported to its members. Production at midyear was down 10.7% year-over-year and 9.2% year-to-date. Overseas shipments also were reported down so that North American mill inventories of 334,000 metric tons at the end of June were 26% lower than a year earlier. However, AbitibiBowater CEO David Paterson expects higher newsprint prices based on growth in newsprint exports. “Clearly, we'd expect the second half of 2008 to be better than the first half," Paterson tells reporters at the Reuters Paper Summit. Still, Paterson admits the company is facing resistance to price increases in North America and it is seeing an acceleration in demand declines due to its earlier pricing actions. Purchasingdata.com, for example, has yet to show transactions at $720 with the July average of $710 and the August average at $707.
Wausau Paper Announces Grade Changes
Wausau Papers announced that the Astropaque grade line will be discontinued.
-They recommend purchasing alternatives such as
-Royal Resource
-Royal Compliments
-Exact Ice
-Exact Opaque
Paper.com has all these alternative grades in stock and ready for immediate shipment. The site also has inventory of the Astropaque items, which will be offered at a discount.
-They recommend purchasing alternatives such as
-Royal Resource
-Royal Compliments
-Exact Ice
-Exact Opaque
Paper.com has all these alternative grades in stock and ready for immediate shipment. The site also has inventory of the Astropaque items, which will be offered at a discount.
Paper Industry Recap
American Forest &Paper Association, the leading paper association, reported printing & writing data for July which confirmed the poor market conditions for coated paper shipments - Coated Free Sheet demand fell 8% and Groundwood coated - publication papers fell a over 19% . Uncoated paper demand was more in-line with trends, with Uncoated Freesheet shipments down only 4.3% and Uncoated Groundwood shipments up over 18%.
2008 Mid-Year Economic Report
by, Elisha Tropper, president, T3 Associates, Harrison, NY, USA
Elisha Tropper, an industry consultant and former label company owner
Energy Crunch: Oil prices are at all-time highs, impacting everything from fuel prices, home heating bills and commodity prices to global oil exploration, the development and expansion of alternative energy sources (solar, nuclear, agricultural), and a potpourri of political, military, ethnic, and religious conflicts.
China 2.0: The changing business face of China is significantly convoluting what for the past decade has been a relatively simple global business equation. Most visibly, rising production costs are impacting the market positioning of Chinese goods. These higher costs have arrived in the form of inflation (raw materials, utilities, freight, etc.), a reduction or elimination in the VAT rebate for exports, and a rash of new labor laws enacted to protect workers and ease international concerns of abuse, resulting in, by some estimates, an increase of as much as 40 percent of the labor costs. In addition, the no-longer fixed Chinese yuan has dramatically risen against the US dollar (10 percent in 2007 alone), resulting in lower export profits. The effects of these changes are beginning to affect the world economy, as lower cost nations are making inroads into the low-end manufacturing sectors, while the (relatively) shrinking margins of Chinese manufacturing is putting pressure on global manufacturers who based financial investments on higher profitability.
The Fed: The US Federal Reserve has succeeded in its effort to devalue the dollar, and is now striving to stave off the inflation that appears to be following. We could debate Fed decision making all day long, but the consequences, however unintended, of the current policies have damaged US credit abroad, slowed economic growth, and enabled foreign investment in US assets at a discount.
Credit Markets: The housing and credit market crunch has dramatically (and disproportionately) had an impact on just about everything financial from Wall Street to Main Street. For businesses, the credit approval process is tougher, loan covenants are stricter, and despite low interest rates, the capital markets are tighter then they’ve been in very long time.
Election Day: The upcoming US presidential election will have significant ramifications across the board, including the economy, taxes, and international diplomacy (or lack thereof). For example, it would be difficult to imagine any new administration, in the face of budget deficits and political pressure, capable of fending off a congressional effort to raise capital gains taxes, let alone personal income taxes (regardless of the potential damage such moves might make to the overall health of the economy).
There is no doubt that each of our businesses is and will continue to be affected in a very significant way by some combination of these events and pressures. The challenge for us is to harness an understanding of how these economic developments in their various permutations potentially impact our existing businesses, and plot the course of action that gives us the best opportunity to grow and thrive.
Elisha Tropper, an industry consultant and former label company owner
Energy Crunch: Oil prices are at all-time highs, impacting everything from fuel prices, home heating bills and commodity prices to global oil exploration, the development and expansion of alternative energy sources (solar, nuclear, agricultural), and a potpourri of political, military, ethnic, and religious conflicts.
China 2.0: The changing business face of China is significantly convoluting what for the past decade has been a relatively simple global business equation. Most visibly, rising production costs are impacting the market positioning of Chinese goods. These higher costs have arrived in the form of inflation (raw materials, utilities, freight, etc.), a reduction or elimination in the VAT rebate for exports, and a rash of new labor laws enacted to protect workers and ease international concerns of abuse, resulting in, by some estimates, an increase of as much as 40 percent of the labor costs. In addition, the no-longer fixed Chinese yuan has dramatically risen against the US dollar (10 percent in 2007 alone), resulting in lower export profits. The effects of these changes are beginning to affect the world economy, as lower cost nations are making inroads into the low-end manufacturing sectors, while the (relatively) shrinking margins of Chinese manufacturing is putting pressure on global manufacturers who based financial investments on higher profitability.
The Fed: The US Federal Reserve has succeeded in its effort to devalue the dollar, and is now striving to stave off the inflation that appears to be following. We could debate Fed decision making all day long, but the consequences, however unintended, of the current policies have damaged US credit abroad, slowed economic growth, and enabled foreign investment in US assets at a discount.
Credit Markets: The housing and credit market crunch has dramatically (and disproportionately) had an impact on just about everything financial from Wall Street to Main Street. For businesses, the credit approval process is tougher, loan covenants are stricter, and despite low interest rates, the capital markets are tighter then they’ve been in very long time.
Election Day: The upcoming US presidential election will have significant ramifications across the board, including the economy, taxes, and international diplomacy (or lack thereof). For example, it would be difficult to imagine any new administration, in the face of budget deficits and political pressure, capable of fending off a congressional effort to raise capital gains taxes, let alone personal income taxes (regardless of the potential damage such moves might make to the overall health of the economy).
There is no doubt that each of our businesses is and will continue to be affected in a very significant way by some combination of these events and pressures. The challenge for us is to harness an understanding of how these economic developments in their various permutations potentially impact our existing businesses, and plot the course of action that gives us the best opportunity to grow and thrive.
Friday, August 15, 2008
Digital Printing Continues to Improve
Many believe the future of printing is in the future of Digital equipment. The markets are segmented into several target markets, namely,
Prints – Photo, labels, decals
-Pages – Documents, direct mail, promotions
-Poster – display, signage
-Reply card – Promotion,
-Packaging – Flexible packaging.
Digital printing involved any reproduction process that does not use a static image carrier. Every page is a new impression.
The digital presses continue to improve in quality, speed, integration of finishing, and ability to use larger sheets. Color printing dominates this market. Digital pareses are the perfect choice for variable data and ability to personalize every page. Toner quality now allows for resolutions of up to 1200dpi at speeds of 40-110 pages or 200ppm if roll fed.
Paper.com recently focused on this market and markets literally every major mills grade. The site has most sheet sizes in stock and ready for immediate shipment.
Prints – Photo, labels, decals
-Pages – Documents, direct mail, promotions
-Poster – display, signage
-Reply card – Promotion,
-Packaging – Flexible packaging.
Digital printing involved any reproduction process that does not use a static image carrier. Every page is a new impression.
The digital presses continue to improve in quality, speed, integration of finishing, and ability to use larger sheets. Color printing dominates this market. Digital pareses are the perfect choice for variable data and ability to personalize every page. Toner quality now allows for resolutions of up to 1200dpi at speeds of 40-110 pages or 200ppm if roll fed.
Paper.com recently focused on this market and markets literally every major mills grade. The site has most sheet sizes in stock and ready for immediate shipment.
Paper …. The New Industry
The paper industry has undergone a transformation. In the past, mills ran to full capacity – no matter what ….. even if it meant reduced pricing of products. Today, inefficient mills and/or paper machines are being shuttered, or at least curtailed until market conditions improve. Operators are now controlling supply and inventory levels are lean. With the reduction in the US Dollar, USA producers can export paper successfully. Paper mills are shading non-strategic assets – forestlands, saw mills, packaging plants, etc. Producers are also reducing the products manufacturer – evaluating and only committing to the most profitable items. Yes, the paper industry has changed, and we continue to predict that paper prices will increase and end users will have fewer grades and producers to chose from.
Paper Economics
With demand declining for both Coated and Uncoated Papers, one would logically conclude that price is also declining (Economics 101). However, after years of disappointing financials, new operators owning and managing manufacturing sites, and strict adherence to capacity rationalization – paper is steadily increasing in price. Manufacturers are producing to demand. That being said, producers are still struggling with raw material increases for important components such as fiber, energy, transpiration, and chemicals and can not raise prices fast enough to keep up with cost. Look for more paper price increases.
Uncoated Free Sheet Market
Shipments for June were down slightly- 0.8% . Virtually all trade sources reported that pricing is relatively healthy. Approximately $40/ton of the proposed $60/ton mid-June price hike on cut-size business paper has gone through, with $15-20/ton of the late June offset increase showing in July. Note, a number of major producers and importers have hinted of yet another hike attempt in September. The key issue will be demand.
Coated Groundwood Market
Prices increased $20-40/ton in July for publication papers. However, with mill & printer inventories up sharply and consumption falling, the full $50/ton price hike was not successful. Shipment data for June was down: -12.9% from 2007, and the balance of this year appears worse. To maintain some measure of pricing stability, the new market leader, NewPage, is curtailing equipment and Verso announced that it will take two weeks of downtime (13K/tons) in September at its Bucksport Mill in Maine
Appleton to open expanded thermal-paper plant
-- Converting Magazine, 8/4/2008
Substrate provider Appleton will dedicate its $125-million expansion of the company's thermal-paper mill in West Carrollton, OH, tomorrow.
Capital investments include a new proprietary coater to produce thermal paper and construction of related facilities as well as enhancements to the mill's No. 92 paper machine. The expansion program will add 35 new jobs, the company says.
“The expansion will improve our capability to meet customer needs for enhanced product design and quality as well as increase capacity to satisfy projected demand for thermal products from our domestic and international customers," says Appleton CEO Mark Richards.
Paper.com has all the Appleton grades on site and ready for immediate shipments.
Substrate provider Appleton will dedicate its $125-million expansion of the company's thermal-paper mill in West Carrollton, OH, tomorrow.
Capital investments include a new proprietary coater to produce thermal paper and construction of related facilities as well as enhancements to the mill's No. 92 paper machine. The expansion program will add 35 new jobs, the company says.
“The expansion will improve our capability to meet customer needs for enhanced product design and quality as well as increase capacity to satisfy projected demand for thermal products from our domestic and international customers," says Appleton CEO Mark Richards.
Paper.com has all the Appleton grades on site and ready for immediate shipments.
North American Label Market
America is the largest pressure sensitive label market in the world.
Current trends outline both the pressure sensitive as well as the wet glue labels are being cannibalized by competition from direct printing, in mold, and glue applied wrap around labels. Traditional label demand from around the world continues to grow at nearly 5% - but the mature markets of North America and Europe are only growing at 2.5%. Market demand breaks down as follows – Pressure Sensitive enjoys 45% of the market share; glue applied is 43%; and Sleeving and in mold are 8.6% and 2%. We are happy to report that paper is still the leading choice for sub straight, at 75% of total demand. One big hurdle for Pressure sensitive labels remains difficult environmental factors and ability to recycle the release liner. Also, RFID and digital printing remain formidable competition.
Current trends outline both the pressure sensitive as well as the wet glue labels are being cannibalized by competition from direct printing, in mold, and glue applied wrap around labels. Traditional label demand from around the world continues to grow at nearly 5% - but the mature markets of North America and Europe are only growing at 2.5%. Market demand breaks down as follows – Pressure Sensitive enjoys 45% of the market share; glue applied is 43%; and Sleeving and in mold are 8.6% and 2%. We are happy to report that paper is still the leading choice for sub straight, at 75% of total demand. One big hurdle for Pressure sensitive labels remains difficult environmental factors and ability to recycle the release liner. Also, RFID and digital printing remain formidable competition.
Wednesday, July 30, 2008
More Paper Price Increases
Several major paper mills recently made announcements for price increase of 5-7% . Notably, the Xerox 4200 and Digital paper families will advance; as well as Smart Paper's Kromekote grades; Nekoosa Carbonless; all SBS Board C1S and C2S; and all continuous stock computer papers - all will increase. Paper.com still has some inventory for immediate shipment at the old price.
Friday, July 25, 2008
Uncoated Free Sheet Update
Although shipments of uncoated woodfree papers are down 7.3% through June, the producers have been successful with the proposed price increase. We understand $40/ton of the proposed $60/ton mid-June price hike on cut-size (copy paper) paper has gone through, with $15-20/ton of the late June offset increase showing in July. The major producers and
importers have suggested t another hike attempt in September...
importers have suggested t another hike attempt in September...
Coated Groundwood Market Update
Prices for publication papers increased $20-40/ton in July. Note: both mill & printer inventories are up sharply and consumption is falling, accordingly, the full $50/ton price hike has not passed through. USA shipments for June was unfavorable: -14.3% and July does not appear much better.
More trouble ahead for Paper Buyers
Problems continue to lie ahead for larger paper buyers for both price and availability. Several paper mills have recently announced permanent closure and others are taking ‘market’ downtime to control supply. In fact North America coated capacity has been reduced by approximately 20%. A different type of operator, the venture capitalist, is now managing the ‘new economics’.
AND, with the reduction of supply – with economics 101 – curtained supply generally generates increased revenue if demand exceeds supply.
AND, with the reduction of supply – with economics 101 – curtained supply generally generates increased revenue if demand exceeds supply.
Added Capacity by Brazil Producer
Brazilian pulp and paper producer, Suzano, is considering building an uncoated white paper machine outside of Brazil. The objective would be to forward integrate some of its
market pulp into paper, but do it closer to the final customer. One location reportedly under consideration is on/near the Texas gulf coast. Suzano would export pulp to the US for conversion into Paper. Suzano currently exports about 60K/tpy of various uncoated free sheet products into the US and has a near-term goal of moving to over 100,000/tons. Within Brazil, Suzano's estimated 2008 capacity is 1.64MM/mtons of market pulp and 1.1MM/mtons of paper.
market pulp into paper, but do it closer to the final customer. One location reportedly under consideration is on/near the Texas gulf coast. Suzano would export pulp to the US for conversion into Paper. Suzano currently exports about 60K/tpy of various uncoated free sheet products into the US and has a near-term goal of moving to over 100,000/tons. Within Brazil, Suzano's estimated 2008 capacity is 1.64MM/mtons of market pulp and 1.1MM/mtons of paper.
More Sustainable Fast Facts
-56% of paper consumed in USA was recovered and recycled in 2007.
- The 54.3 million tons of paper recovered in 2007 would add up to 360 pounds for every USA citizen.
-The paper industry has a goal of recovering over 60% of paper by 2012
- The 54.3 million tons of paper recovered in 2007 would add up to 360 pounds for every USA citizen.
-The paper industry has a goal of recovering over 60% of paper by 2012
Smart Papers Constructing Biomass Co-Gen Plant
Smart Papers recently announced they would start a new $30million co-generation plant, which will use 100% biomass fuel. This will assist the mill in producing more environmentally friendly papers by reducing greenhouse gas emissions.
International Paper purchases Weyerhaeuser’s Packaging division
International Paper purchased the packaging division of Weyerhaeuser, which included 9 container plants (6.3Million tons); 72 packaging plants (99.4billion sq. ft); 10 specialty packaging plants, 4 bag Kraft plants, and 19 recycling plants. This affected 14,300 employees.
Paper, Packaging Companies Struggle To Make Profit
By Mike Obel,
Manufacturing.Net - July 25, 2008
NEW YORK (AP) -- Profits at paper, packaging and building supply companies are getting squeezed by raw material costs and falling demand for their goods as the U.S. economy and housing market languish.
Even as these companies cut costs by shuttering mills and raise customer prices, it's not fast enough to offset inflation. And if they raise what they charge too quickly, they could see a greater falloff in demand.
With the exception of newsprint and the price of land with timber on it, product prices are struggling to keep up, says RBC Capital Markets analyst Paul Quinn.
"While forest product prices are increasing, these gains are largely the result of capacity curtailments and closures rather than rising demand," he wrote in a July 22 client note.
Meanwhile, companies are still paying for the surging cost of materials like fiber, energy, chemicals and transportation. Take natural gas, both a fuel and a component for plastic packaging makers: In the last 52 weeks its price has shot up about 54 percent, even after the effect of a dramatic sell-off over the past three weeks.
Earnings also are staggering under the worst U.S. housing construction in decades and -- for companies with significant assets north of the U.S. -- a sharp rise in the value of the Canadian dollar against the greenback. Those conditions are freezing up demand for lumber and other goods used in buildings.
"We expect the industry to report aggregate net income of just $37 million for the second quarter of 2008, down 93 percent from the second quarter 2007, despite higher product prices," wrote Citi Investment Research analyst Chip Dillon in a July 21 note.
Among building products, paper and packaging companies that will release second-quarter earnings are Louisiana-Pacific Corp., reporting July 29, and Memphis-based International Paper, reporting July 31.
Analysts polled by Thomson Financial expect, on average, that Louisiana-Pacific will report a wider loss of 38 cents per share, while International Paper will report a smaller profit of 39 cents. Analysts' estimates typically exclude one-time items.
Share prices have declined with the sector's weakened results. In the last 52 weeks, the S&P 500 Paper and Forest Products index has tumbled 34 percent.
"The sector is a long way from a sustained recovery ... significant cost inflation remains the industry's main concern," says Quinn. "On the top line, we see little sustained momentum in commodity pricing, with the exception of newsprint and groundwood paper, offering limited ability to offset higher fibre, chemical, energy and transportation costs," Quinn wrote.
Quinn also said the average estimate of 11 cents per share loss is down from the 10 cents per share average profit seen in the second quarter of 2007, but narrower than the 17 cents per share loss seen in the first quarter of 2008.
Although there is evidence of sequential price increases and sequential improvements in earnings, new threats are looming.
Deutsche Bank-North America analyst Mark Wilde said in a July 21 client note that "reliable trade sources" report Brazilian pulp and white paper producer Suzano Papel e Celulose is considering building a plant on or near the Texas Gulf Coast.
He said as the industry scrambles to close mills and plants in the face of declining demand, "the specter of new capacity coming into the market is troubling
Manufacturing.Net - July 25, 2008
NEW YORK (AP) -- Profits at paper, packaging and building supply companies are getting squeezed by raw material costs and falling demand for their goods as the U.S. economy and housing market languish.
Even as these companies cut costs by shuttering mills and raise customer prices, it's not fast enough to offset inflation. And if they raise what they charge too quickly, they could see a greater falloff in demand.
With the exception of newsprint and the price of land with timber on it, product prices are struggling to keep up, says RBC Capital Markets analyst Paul Quinn.
"While forest product prices are increasing, these gains are largely the result of capacity curtailments and closures rather than rising demand," he wrote in a July 22 client note.
Meanwhile, companies are still paying for the surging cost of materials like fiber, energy, chemicals and transportation. Take natural gas, both a fuel and a component for plastic packaging makers: In the last 52 weeks its price has shot up about 54 percent, even after the effect of a dramatic sell-off over the past three weeks.
Earnings also are staggering under the worst U.S. housing construction in decades and -- for companies with significant assets north of the U.S. -- a sharp rise in the value of the Canadian dollar against the greenback. Those conditions are freezing up demand for lumber and other goods used in buildings.
"We expect the industry to report aggregate net income of just $37 million for the second quarter of 2008, down 93 percent from the second quarter 2007, despite higher product prices," wrote Citi Investment Research analyst Chip Dillon in a July 21 note.
Among building products, paper and packaging companies that will release second-quarter earnings are Louisiana-Pacific Corp., reporting July 29, and Memphis-based International Paper, reporting July 31.
Analysts polled by Thomson Financial expect, on average, that Louisiana-Pacific will report a wider loss of 38 cents per share, while International Paper will report a smaller profit of 39 cents. Analysts' estimates typically exclude one-time items.
Share prices have declined with the sector's weakened results. In the last 52 weeks, the S&P 500 Paper and Forest Products index has tumbled 34 percent.
"The sector is a long way from a sustained recovery ... significant cost inflation remains the industry's main concern," says Quinn. "On the top line, we see little sustained momentum in commodity pricing, with the exception of newsprint and groundwood paper, offering limited ability to offset higher fibre, chemical, energy and transportation costs," Quinn wrote.
Quinn also said the average estimate of 11 cents per share loss is down from the 10 cents per share average profit seen in the second quarter of 2007, but narrower than the 17 cents per share loss seen in the first quarter of 2008.
Although there is evidence of sequential price increases and sequential improvements in earnings, new threats are looming.
Deutsche Bank-North America analyst Mark Wilde said in a July 21 client note that "reliable trade sources" report Brazilian pulp and white paper producer Suzano Papel e Celulose is considering building a plant on or near the Texas Gulf Coast.
He said as the industry scrambles to close mills and plants in the face of declining demand, "the specter of new capacity coming into the market is troubling
Tuesday, July 15, 2008
Mohawk Paper wins HP Award
Mohawk Fine Papers was named a Hewlett Packard Indigo Preferred Partner. Mohawk’s Digital products all have the proprietary i-tone finish for superior reproduction.
Digitally printed page counts are exploding 40+% and the quality of papers improves every year. Websites such as Paper.com have focused on marketing all the popular digital papers including Mohawk Fine Paper.
Digitally printed page counts are exploding 40+% and the quality of papers improves every year. Websites such as Paper.com have focused on marketing all the popular digital papers including Mohawk Fine Paper.
Uncoated Free Sheet
Although the uncoated woodfree shipments are down over the past few months, the $60/ton mid-June price hike on cut-size business paper as well as a late June offset increase seems to have been implemented with 100% success.
A number of major producers and importers have hinted about the prospect of yet another hike attempt – look for Fall announcement.
A number of major producers and importers have hinted about the prospect of yet another hike attempt – look for Fall announcement.
Digital Producer Expands Line
Wausau Paper now offers its new line of improved Exact Digital papers. The new line, marketed by Paper.com, includes a wide range of finishes, sizes, and basis weights. All 44 Digital items are FSC certified
Baltimore becomes Largest Paper Port
When the paper mill M-Real of Finland opened its new warehouse in Baltimore, and increased its shipments into USA, the seaport effectively became the largest port for paper imports. US Forest product imports have grown from 185,000tons a year six years ago to 1.4million tons a year today. M-Real reports it now ships between 1000 – 1400 truck loads of paper every year from Baltimore.
Market Pulp
DB Research Paper
Pulp appears to have reached a near-term top and prices are under modest pressure in some regional markets. The trade papers have yet to reflect this easing. The July price hike initiative on NBSK achieved only partial success, with the list price increasing by $10/mton to $890/mton. Other grades showing higher prices: SBSK (+$10 to $850), SBHK (+$15 to $820), and fluff (+$15 to $915). Trade reports suggest that the softwood market in Europe remains still over-supplied. In the European market, NBSK slipped by $5/mton to $895/mton. CTMP and hardwood prices have reportedly slipped in Asia.
How much could prices ease? With the US$ and costs rising, we think it won't take much of a price decline to trigger more capacity closures in CN & Europe.
Pulp appears to have reached a near-term top and prices are under modest pressure in some regional markets. The trade papers have yet to reflect this easing. The July price hike initiative on NBSK achieved only partial success, with the list price increasing by $10/mton to $890/mton. Other grades showing higher prices: SBSK (+$10 to $850), SBHK (+$15 to $820), and fluff (+$15 to $915). Trade reports suggest that the softwood market in Europe remains still over-supplied. In the European market, NBSK slipped by $5/mton to $895/mton. CTMP and hardwood prices have reportedly slipped in Asia.
How much could prices ease? With the US$ and costs rising, we think it won't take much of a price decline to trigger more capacity closures in CN & Europe.
Brookfield Investments changes Fraser Paper Name
Fraser Paper Inc.’s owner, Brookfield Investments Corp, recently announced it will change the name of the company from Fraser to Brascade Corporation.
NewsPapers Facing Worst Year
Newspapers went from bad to worse; they experienced a double digit drop in advertising revenue – their primary source of income. Housing markets have slumped, therefore limited real estate advertisements, and fewer classified ads. The internet is a newspapers’ public enemy #1 (with web based advertising revenues growing 20-30% a year).
Overall, ad revenue fell almost 8% last year – this year is forecasted to be over 12%. Newspapers attempt to reduce costs through fewer pages, smaller size newspaper, eliminating distribution routes, lighter weight paper, consolidating plants, and laying off labor but profit margins continue to erode.
Overall, ad revenue fell almost 8% last year – this year is forecasted to be over 12%. Newspapers attempt to reduce costs through fewer pages, smaller size newspaper, eliminating distribution routes, lighter weight paper, consolidating plants, and laying off labor but profit margins continue to erode.
Prices of packaging materials continue to rise
Prices for materials used in packaging continue to rise. Among the most recent announcements of price increases are those from Sun Chemical, the world’s largest ink manufacturer, Valéron and Michelman. The increases are the result, they say, of rising energy, transportation and raw materials costs.
♦ Caraustar Industries will increase prices by $50 per ton for all coated, recycled paperboard grades, as well as pass through certain freight surcharges to customers, effective with shipments on and after July 28. It will also raise prices on all paperboard-based converted products by 6%, effective with shipments on and after Aug. 11.
♦ Graphic Packaging International announced a $50 per ton price increase for its coated recycled board (CRB) and uncoated recycled board (URB). GPI will also set new freight allowances. These price hikes are effective with shipments on or after July 28.
♦ Rock-Tenn Co. will increases prices by $65
♦ Sun Chemical North America including Canada, will implement energy/material surcharges on inks effective July 14. A 10-cent/lb surcharge will be applied to news inks, directory inks, coldest, heatset, publication gravure, solvent packaging, and energy curing inks. Water packaging inks will be subjected to a 6-cent/lb surcharge.
♦ Flint Group announced price increases and surcharges on all packaging inks sold in North America, effective on all products billed on or after July 21.Surcharges on all solvent, energy-curable and paste products (inks, coatings, extenders/blend vehicles) is 10 cents/lb. Surcharges on water-based inks, coatings, extenders/blend vehicles and additives: 6 cents/lb. Price increases are as follows: Solvent liquid ink colors, extenders/blend vehicles and additives: 5%; solvent liquid blacks and all solvent and water whites: 7%; water-based ink colors and blacks: 4%; conventional sheetfed paste inks: 6%; all energy-curable products: 6%.
♦ Michelman will increase prices 15-25% on coatings and additives across all product categories in the Americas region, effective July 14. The supplier's products are used on flexible packaging, paperboard and corrugated boxes.
♦ Caraustar Industries will increase prices by $50 per ton for all coated, recycled paperboard grades, as well as pass through certain freight surcharges to customers, effective with shipments on and after July 28. It will also raise prices on all paperboard-based converted products by 6%, effective with shipments on and after Aug. 11.
♦ Graphic Packaging International announced a $50 per ton price increase for its coated recycled board (CRB) and uncoated recycled board (URB). GPI will also set new freight allowances. These price hikes are effective with shipments on or after July 28.
♦ Rock-Tenn Co. will increases prices by $65
♦ Sun Chemical North America including Canada, will implement energy/material surcharges on inks effective July 14. A 10-cent/lb surcharge will be applied to news inks, directory inks, coldest, heatset, publication gravure, solvent packaging, and energy curing inks. Water packaging inks will be subjected to a 6-cent/lb surcharge.
♦ Flint Group announced price increases and surcharges on all packaging inks sold in North America, effective on all products billed on or after July 21.Surcharges on all solvent, energy-curable and paste products (inks, coatings, extenders/blend vehicles) is 10 cents/lb. Surcharges on water-based inks, coatings, extenders/blend vehicles and additives: 6 cents/lb. Price increases are as follows: Solvent liquid ink colors, extenders/blend vehicles and additives: 5%; solvent liquid blacks and all solvent and water whites: 7%; water-based ink colors and blacks: 4%; conventional sheetfed paste inks: 6%; all energy-curable products: 6%.
♦ Michelman will increase prices 15-25% on coatings and additives across all product categories in the Americas region, effective July 14. The supplier's products are used on flexible packaging, paperboard and corrugated boxes.
Catalyst pulp mill closing
Catalyst Paper is permanently shutting its pulp mill near Campbell River, putting 440 people out of work.
It is the third major industrial shutdown for the area this year.
Garneau said the No. 1 problem with the future of the Elk Falls pulp operation is a shortage of sawdust.
The recent shutdown of a nearby TimberWest sawmill that supplied sawdust, and the slowdown in the U.S. housing market, have meant less lumber is being milled. Less lumber means less sawdust.
In April, Catalyst announced the shutdown of one paper machine putting 145 people out of work. In February, TimberWest announced the permanent closing of its Elk Falls sawmill putting 257 people out of work.
The Elk Falls mill is the second Vancouver Island pulp mill to shut down within the last two months.
Pope and Talbot's Harmac mill closed in June when that company went into receivership. The mill remains down while the receiver attempts to sell it.
It is the third major industrial shutdown for the area this year.
Garneau said the No. 1 problem with the future of the Elk Falls pulp operation is a shortage of sawdust.
The recent shutdown of a nearby TimberWest sawmill that supplied sawdust, and the slowdown in the U.S. housing market, have meant less lumber is being milled. Less lumber means less sawdust.
In April, Catalyst announced the shutdown of one paper machine putting 145 people out of work. In February, TimberWest announced the permanent closing of its Elk Falls sawmill putting 257 people out of work.
The Elk Falls mill is the second Vancouver Island pulp mill to shut down within the last two months.
Pope and Talbot's Harmac mill closed in June when that company went into receivership. The mill remains down while the receiver attempts to sell it.
Five Mills close
This week saw closures announced for 5 recycled boxboard mills with 450,000 ton of capacity. Closures: Brownsville Specialty, Cascades, Newark Group (2) and Sonoco. Further announcements are probable.
Box makers are pushing 11% box price hike
-- Purchasing Magazine
Producers have announced a price increase of 11% on corrugated boxes, assuming that the announced $55/ton containerboard price increase for July will take effect. At least five major integrated box makers have announced the hikes, with effective dates ranging from July 14 to August 1. The subscription news service RISIinfo.com says independent box makers have been concerned about their ability to pass through the containerboard price increase in the current U.S. economic environment “and are watching closely to see if integrated producers are serious about implementing the box price increase.”
Producers have announced a price increase of 11% on corrugated boxes, assuming that the announced $55/ton containerboard price increase for July will take effect. At least five major integrated box makers have announced the hikes, with effective dates ranging from July 14 to August 1. The subscription news service RISIinfo.com says independent box makers have been concerned about their ability to pass through the containerboard price increase in the current U.S. economic environment “and are watching closely to see if integrated producers are serious about implementing the box price increase.”
Wednesday, July 02, 2008
Office paper prices continue to stiffen
Energy, raw material costs are key factors
By Maria Varmazis – Purchasing Magazine
Office paper prices were forecast to increase by 10% this year after a 7% increase last year, though the market looks poised to easily surpass that forecast. Cut size copier paper prices of $1,120/ton are 9% higher than in January. The latest Purchasingdata.com quarterly forecast shows uncoated bond will average $1,125/ton in the third quarter, up from $1,113/ton in the second quarter, while forms bond will increase to an average $981/ton from $970/ton in the April-June period It’s been a perfect storm of cost increases that have affected paper prices. Most notably, as energy prices continue to skyrocket through the first half, so do the costs for many other aspects of paper manufacturing: Higher costs for pulp, higher manufacturing costs, higher chemicals costs, higher shipping costs—and it’s all being passed down to the buyer. On top of that, the weak dollar has curtailed paper and pulp imports to the U.S., all while paper producers announce mill closures and producer consolidations, adding more pressure to the market. Paper producers are quick to point out their higher manufacturing costs as they announce price increases at previously unforeseen rates. In late May, Boise announced a $60/ton price increase on its uncoated free sheet, citing “significant cost increases in energy, chemicals, transportation and fiber” after previously hiking prices by $60/ton in February. After Boise’s announcement, other producers including Domtar, Glatfelter and Finch announced price increases, also at $60/ton, just days later. Domtar and Boise together produce 40% of all the uncoated free sheet in North America.
By Maria Varmazis – Purchasing Magazine
Office paper prices were forecast to increase by 10% this year after a 7% increase last year, though the market looks poised to easily surpass that forecast. Cut size copier paper prices of $1,120/ton are 9% higher than in January. The latest Purchasingdata.com quarterly forecast shows uncoated bond will average $1,125/ton in the third quarter, up from $1,113/ton in the second quarter, while forms bond will increase to an average $981/ton from $970/ton in the April-June period It’s been a perfect storm of cost increases that have affected paper prices. Most notably, as energy prices continue to skyrocket through the first half, so do the costs for many other aspects of paper manufacturing: Higher costs for pulp, higher manufacturing costs, higher chemicals costs, higher shipping costs—and it’s all being passed down to the buyer. On top of that, the weak dollar has curtailed paper and pulp imports to the U.S., all while paper producers announce mill closures and producer consolidations, adding more pressure to the market. Paper producers are quick to point out their higher manufacturing costs as they announce price increases at previously unforeseen rates. In late May, Boise announced a $60/ton price increase on its uncoated free sheet, citing “significant cost increases in energy, chemicals, transportation and fiber” after previously hiking prices by $60/ton in February. After Boise’s announcement, other producers including Domtar, Glatfelter and Finch announced price increases, also at $60/ton, just days later. Domtar and Boise together produce 40% of all the uncoated free sheet in North America.
School Paper Grades all Experience Price Increase
We would like to make you aware of recent changes in pricing that have taken place. As you are aware, manufacturers and publishers in our industry announce price increases at various times throughout the year. School Products do not normally make a point to communicate each individual price change. However, this year a large number of suppliers have announced mid-year price increases. Most of these became effective Tuesday, July 1st. Undoubtedly, these increases are the result of the well-documented increase in the costs of production and transportation worldwide.
The website Paper.com has negotiated the very best prices available for school papers, most will be effected due to cost pressures.
Tuesday, July 01, 2008
Coated Publication papers ..... in Trouble??
Recent reports on the coated paper consumption as well as inventory figures are troubling.
These reports raise questions about further industry pricing gains and could open the door to discounting. Please note important coated vendors to Paper.com’s website include NewPage, Sappi and Verso and are the largest North American coated paper producers.
The report outlines inventory figures for lighter-weight coated Groundwood (LWC – publication papers) were especially troublesome. Inventories have increased (up 37%) and currently sit at 59 days of consumption. Consumption has fallen 22% from May, 2007
levels and is off 17% on YTD basis.
These reports raise questions about further industry pricing gains and could open the door to discounting. Please note important coated vendors to Paper.com’s website include NewPage, Sappi and Verso and are the largest North American coated paper producers.
The report outlines inventory figures for lighter-weight coated Groundwood (LWC – publication papers) were especially troublesome. Inventories have increased (up 37%) and currently sit at 59 days of consumption. Consumption has fallen 22% from May, 2007
levels and is off 17% on YTD basis.
Neenah, the Specialty Mill
Neenah has successfully sold it’s Pictou Pulp mill to Atlas Holding and Blue Wolfe Capital. With this sale, Neenah no longer produces any pulp.
Neenah Paper will become a pure premium paper and specialty products manufacturing company and no longer owns any pulp mills.
Neenah Paper is a leading global manufacturer of premium, performance- based papers and specialty products used in a variety of applications including filtration, printing and writing, and as backing and component materials for many specialized industrial and consumer applications. Paper.com markets many Neenah products under well-known brands such as CLASSIC®, ENVIRONMENT®, STARWHITE®.
Neenah Paper will become a pure premium paper and specialty products manufacturing company and no longer owns any pulp mills.
Neenah Paper is a leading global manufacturer of premium, performance- based papers and specialty products used in a variety of applications including filtration, printing and writing, and as backing and component materials for many specialized industrial and consumer applications. Paper.com markets many Neenah products under well-known brands such as CLASSIC®, ENVIRONMENT®, STARWHITE®.
Crude Oil Prices Push Up Ink Costs
Rising crude oil prices continue to put pressure on ink makers to find ways to recoup cost increases. Imposing a surcharge of $0.10/lb. on all heatset, coldset and news inks, is the approach being taken by the Flint Group North America Publication and News Inks divisions. Central Ink is implementing a range of price increases, including $0.12/lb. on all non-heatset black inks and 8 percent on colors, as well as a flat 6 percent for all heatset inks. Additionally, Sun Chemical’s Performance Pigments division is raising pigment prices by 10 to 30 percent. All of these increases are effective July 1.
“The majority of ink products are derived from crude oil and news ink, itself, consists of 50 to 70 percent crude oil,” noted Bradley J. Dahleen, Central Ink’s vice president of sales and marketing.
“The majority of ink products are derived from crude oil and news ink, itself, consists of 50 to 70 percent crude oil,” noted Bradley J. Dahleen, Central Ink’s vice president of sales and marketing.
Boston Herald Outsourcing Printing
Layoffs for some 130 to 160 printing plant workers are expected as a result of the Boston Herald deciding to outsource printing of the daily newspaper, according to published reports. The expense required to modernize its presses, some of which are 50 years old, was cited as a reason for the move. Contracts reportedly are still pending, but the Herald is now expected to be produced by a Dow Jones Co. plant in Chicopee, MA, six days a week and the seventh edition printed by Boston Offset in Norwood.
Thursday, June 26, 2008
Increased Costs Continue to Pressure Margins
Rising costs continue to squeeze paper and packaging companies.
As energy, transportation, fiber, resin and chemical costs surge, firms are faced with attempting to pass along these higher costs in the midst of sluggish downstream demand. Stuck in the middle of the supply chain, producers in both sectors find their margins under pressure as they race on a financial treadmill.
As energy, transportation, fiber, resin and chemical costs surge, firms are faced with attempting to pass along these higher costs in the midst of sluggish downstream demand. Stuck in the middle of the supply chain, producers in both sectors find their margins under pressure as they race on a financial treadmill.
Coated mechanical inventories surge as battle lines are drawn for upcoming price hikes
By John Maine, Vice President, World Graphic Papers, RISI
RISI has been predicting a major reversal of the trend in North American coated mechanical paper "apparent" consumption, and the new data that was just released by the PPPC show that the turnaround showed up with a vengeance in May. The year-to-date figures had been up 3.4% though April, which was perplexing given all of the weakness in the major end-use markets such as magazines and catalogs. Despite this weakness, these end-users continued to buy paper, amassing a sizable inventory, while their true consumption of paper plunged.
The statistics released in May were shocking: North American demand declined a whopping 13.5%. End-users had finally run out of room for inventory and started cutting orders sharply to match the performance of their true consumption of paper, which has been very weak all year.
The result of the slump in orders for May was a sharp rise in mill inventory of paper. Up until the last two months, all of the inventory build had been at the printer or end-user level, while mill inventories declined and remained very lean. During April and May, mill inventories jumped 85%, rising from 155,000 tons in March, to 289,000 tons in May. These inventories are still below year-ago levels, so they are not out of line. However, the speed with which these inventories are rising (2 months) is dramatic, and the fact that end-user and mill inventories are now both high while demand is weak is very disturbing to the market.
RISI has been predicting a major reversal of the trend in North American coated mechanical paper "apparent" consumption, and the new data that was just released by the PPPC show that the turnaround showed up with a vengeance in May. The year-to-date figures had been up 3.4% though April, which was perplexing given all of the weakness in the major end-use markets such as magazines and catalogs. Despite this weakness, these end-users continued to buy paper, amassing a sizable inventory, while their true consumption of paper plunged.
The statistics released in May were shocking: North American demand declined a whopping 13.5%. End-users had finally run out of room for inventory and started cutting orders sharply to match the performance of their true consumption of paper, which has been very weak all year.
The result of the slump in orders for May was a sharp rise in mill inventory of paper. Up until the last two months, all of the inventory build had been at the printer or end-user level, while mill inventories declined and remained very lean. During April and May, mill inventories jumped 85%, rising from 155,000 tons in March, to 289,000 tons in May. These inventories are still below year-ago levels, so they are not out of line. However, the speed with which these inventories are rising (2 months) is dramatic, and the fact that end-user and mill inventories are now both high while demand is weak is very disturbing to the market.
Capital Spending of North American Paper Producers to Remain at 2007 Levels
As more companies focus on controlling energy costs and arriving at the most profitable grade mix, RISI predicts that 2008 capital spending will decrease slightly or remain at the same levels as in 2007. Last year, capital spending was markedly lower than it had been a decade ago and, right now, the likelihood is that 2009 will not see appreciable change. Projects that address energy costs or that restructure machines for value added grades or that will change the grade mix are the most probable options as they serve the interest of improving profitability.
NewPage Takes Additional Downtime
NewPage announced it will take approximately 34,000 tons of coated paper downtime next month in addition to the 25,000 tons the company announced on June 5. The two coated freesheet machine at the Kimberly, Wisconsin mill will account for approximately 18,000 tons of the 34,000 tons of downtime. The balance will come from closure of the Niagara mill on June 21, which produces lightweight coated (LWC) groundwood papers.
Business Papers Price Increase
A $60 per ton price hike on cut-size uncoated free sheet (business papers) is
here to stay. Other portions of uncoated market such as offset rolls are not enjoying same demand, so the new price will not hit all market segments equally. Most producers continue to warn about an additional "cost- driven" price increase attempts later this year.
here to stay. Other portions of uncoated market such as offset rolls are not enjoying same demand, so the new price will not hit all market segments equally. Most producers continue to warn about an additional "cost- driven" price increase attempts later this year.
UPM Launches Carbon Footprint Calculator
UPM has launched a new tool to calculate the carbon footprint of its paper products. Customers can now estimate their own carbon footprint based on the ten elements of the Carbon Footprint Framework for Paper and Board Products, which was developed by the Confederation of European Paper Industries (CEPI). The tool is accessible through the Paper Profile on UPM’s Web site.
COATED GROUNDWOOD UPDATE
• Notes from Deutsche Bank
Watch this space - - - the presence of large private owners appears to be changing behavior. Earlier this month in announcing market downtime, NewPage pointed to rising inventories as well as slower demand from advertisers. We have reason to believe that other players may be quietly taking downtime as well. It also makes a current pricing initiative interesting to watch since demand is slowing, but costs are surging. A host of players, domestic and offshore, have announced coated paper increases over the past
several weeks. In the US, Verso announced a series of $50/ton price increases for June 1 on light-weight coated (LWC) and other coated grades. AbitibiBowater and others have also announced hikes.
Watch this space - - - the presence of large private owners appears to be changing behavior. Earlier this month in announcing market downtime, NewPage pointed to rising inventories as well as slower demand from advertisers. We have reason to believe that other players may be quietly taking downtime as well. It also makes a current pricing initiative interesting to watch since demand is slowing, but costs are surging. A host of players, domestic and offshore, have announced coated paper increases over the past
several weeks. In the US, Verso announced a series of $50/ton price increases for June 1 on light-weight coated (LWC) and other coated grades. AbitibiBowater and others have also announced hikes.
NEWSPRINT Update
June prices for 30-lb newsprint rose $20/mton to $700/mton - - - a 12 year high. Furthermore, Leading producers have announced a $60/ton price hike for later this summer. Many publishers are bracing for a $20 increase in late Fall.
Additional hikes will likely be dependant on the willingness of industry leaders to take a hard-line with customers in addition to removing capacity. The industries largest producer, AbitibiBowater suggested that it would look at further supply reductions as we approach year-end. On the demand side, consumption at USA dailies fell
13.7% over last 12 months.
Additional hikes will likely be dependant on the willingness of industry leaders to take a hard-line with customers in addition to removing capacity. The industries largest producer, AbitibiBowater suggested that it would look at further supply reductions as we approach year-end. On the demand side, consumption at USA dailies fell
13.7% over last 12 months.
Tuesday, June 17, 2008
SMART Papers Appoints New Sales VP
SMART Papers has named Don Butts vice president of sales for its Merchant Channel. Mr. Butts will be responsible for sales to all paper distributors in North America. He will be based out of the company’s Hamilton, OH headquarters. Butts spent 11 years at Domtar, six of which he held the position of vice president of sales. Prior to that, he worked for Boise Cascade in a variety of management positions. Before joining Boise, Butts worked as a national account manager for Mead Paper and handled the RR Donnelley account.
Paper.com markets all the Smart Paper products, all items ship within 24 hours after order placed.
Paper Continues to Witness Price Increases
We, at Paper.com, continue to witness price increases – this time on all carbonless, thermal, and coated bonds effective with shipments after June 30th. Producers site cost pressures from energy, transportation, fiber, and chemicals. This coupled with lower capacity and strong demand.
Another interesting development, specific to our thermal papers, the US Department of Commerce recently announced preliminary ruling for ‘dumping charges’ against mills in China and Germany. The tariffs range from 7 to 33%; making imports a very expensive alternative.
These increases are in addition to our previously announced for all copy paper, effective June 16, of approximately $1.50/carton on 20lbs and $1.80 per carton on 24pound.
Another interesting development, specific to our thermal papers, the US Department of Commerce recently announced preliminary ruling for ‘dumping charges’ against mills in China and Germany. The tariffs range from 7 to 33%; making imports a very expensive alternative.
These increases are in addition to our previously announced for all copy paper, effective June 16, of approximately $1.50/carton on 20lbs and $1.80 per carton on 24pound.
Too many Environmentally Friendly Certifications!@#$%&
In the late 1990’s the Forest Stewardship Council (FSC) and the Sustainable Forest Initiative (SFI) were introduced. Both are third party certification parties that review the entire supply chain for a fee. The certificate confirms the chain of custody for standards that address the fiber content and the forest, which was harvested. Certified papers are more expensive. The board conducts an audit of the entire process from the tree to the production through to the distributor or printer. Paper.com has many paper items that are FSC and SFI certified in the new Green Store, along with thousands of other environmentally friendly papers. Including paper with all the popular certifications such as Green Certification, Alternative energy Certification, Tree Free Certification, Chlorine Free Certification, 25-100% recycled Certification, Green Seal Certificate, etc.
Update on Uncoated Free Sheet
Notes from Deutsche Bank Research Paper
Following initial announcements by Boise, Domtar, International Paper and several other producers have come out with $60/ton price hikes on cut-size (copy paper) and offset rolls for June and July. This would be the second price hike in 2008 on uncoated grades - - - the result of
significant cost increases in energy, chemicals, transportation and fiber. However, demand remains lackluster. Shipments declined 9.6% vs March ’07 and preliminary data suggests that April was similarly weak (down -10% in the US).
Following initial announcements by Boise, Domtar, International Paper and several other producers have come out with $60/ton price hikes on cut-size (copy paper) and offset rolls for June and July. This would be the second price hike in 2008 on uncoated grades - - - the result of
significant cost increases in energy, chemicals, transportation and fiber. However, demand remains lackluster. Shipments declined 9.6% vs March ’07 and preliminary data suggests that April was similarly weak (down -10% in the US).
Update on Coated Groundwood
Notes from Deutsche Bank Research Paper
Most producers, both domestic and offshore, have announced coated
paper increases over the past several weeks. In the USA, Verso announced a $50/ton price increases for June 1 on light-weight coated (Publication) and other coated grades. AbitibiBowater and others have also announced hikes. In Japan, Nippon and Oji have both announced $100/ton hikes on export coated publication papers. Of note; US shipments rose an impressive 10.3% so far this year. With rising costs & weak US$, it creates an interesting
dynamic. There is growing evidence that demand is weakening. As we have noted, contacts in the printing distribution community are reporting that high paper prices and a slower economy are triggering reductions in some cataloging budgets. Late last week in announcing
25K of market downtime, NewPage pointed to rising inventories at a number of printers as well as slower demand from advertisers.
Most producers, both domestic and offshore, have announced coated
paper increases over the past several weeks. In the USA, Verso announced a $50/ton price increases for June 1 on light-weight coated (Publication) and other coated grades. AbitibiBowater and others have also announced hikes. In Japan, Nippon and Oji have both announced $100/ton hikes on export coated publication papers. Of note; US shipments rose an impressive 10.3% so far this year. With rising costs & weak US$, it creates an interesting
dynamic. There is growing evidence that demand is weakening. As we have noted, contacts in the printing distribution community are reporting that high paper prices and a slower economy are triggering reductions in some cataloging budgets. Late last week in announcing
25K of market downtime, NewPage pointed to rising inventories at a number of printers as well as slower demand from advertisers.
Update on Containerboard Grades
Notes from Deutsche Bank Research Paper
Flooding forced Weyerhaeuser to shut down is Cedar Rapids, IA, Containerboard mill (970,000/tpy). The impact is unclear -- the market is already tight with International Paper's Vicksburg mill outage. Major producers (70% of NA capacity) have announced a $55/ton price hike for July 1, and Smurfit and International Paper have now followed with a box hike.
In light of market dynamics, this is not a surprise. The big obstacle will be making prices "stick" in the wake of sluggish box demand. The cost story is mixed. While energy costs continue to
surge, rising export freight rates and problems finding shipping space have put pressure on OCC pricing since beginning of year.
Flooding forced Weyerhaeuser to shut down is Cedar Rapids, IA, Containerboard mill (970,000/tpy). The impact is unclear -- the market is already tight with International Paper's Vicksburg mill outage. Major producers (70% of NA capacity) have announced a $55/ton price hike for July 1, and Smurfit and International Paper have now followed with a box hike.
In light of market dynamics, this is not a surprise. The big obstacle will be making prices "stick" in the wake of sluggish box demand. The cost story is mixed. While energy costs continue to
surge, rising export freight rates and problems finding shipping space have put pressure on OCC pricing since beginning of year.
NewPage Taking Mill Down Time
NewPage Corp. will be taking approximately 25,000 tons of coated paper market-related downtime in June and July throughout its mill system. Several machines will be involved, and each will take advantage of specific times to complete planned maintenance and capital work.
Meanwhile, two paper machines at the Niagara, WI, facility that were slated to run until this fall will now be permanently closed on July 12. This reduces production by an additional 50,000 tons. The Niagara machines produce lightweight coated groundwood papers used in magazines and catalogs
Meanwhile, two paper machines at the Niagara, WI, facility that were slated to run until this fall will now be permanently closed on July 12. This reduces production by an additional 50,000 tons. The Niagara machines produce lightweight coated groundwood papers used in magazines and catalogs
Corporate Express Recommends Staples Bid
Corporate Express will recommend a $14.36 per share takeover bid by Staples Inc. to shareholders, according to the Associated Press. The decision reverses an earlier plan to merge with French competitor Lyreco. Including Corporate Express debt, the offer values the company at around $4.8 billion.
Potsdam Specialty Paper acquires MeadWestVaco’s NY mill
-- Converting Magazine,
MeadWestvaco Corp. (www.meadwestvaco.com) will sell the MWV Specialty Papers Cedar mill in Potsdam, NY, to Potsdam Specialty Paper Inc. (PSPI). MWV Specialty Papers will continue to own and operate its Willow mill in South Lee, MA. The sale is expected to close in the third quarter of 2008.
PSPI is part of an investment holding company with offices in NY, Hong Kong, and Toronto, that has the financial resources to continue growing the business, expanding the product portfolio, investing in the people and facilities, and rapidly expanding the global reach of the business to new customers. PSPI will be part of a portfolio of global businesses that focus on niche products and markets in the value-added paper and coatings distribution business.
The mill’s current management team will remain in place following the sale, and all employees will transition to PSPI following the completion of the sale.
MeadWestvaco Corp. (www.meadwestvaco.com) will sell the MWV Specialty Papers Cedar mill in Potsdam, NY, to Potsdam Specialty Paper Inc. (PSPI). MWV Specialty Papers will continue to own and operate its Willow mill in South Lee, MA. The sale is expected to close in the third quarter of 2008.
PSPI is part of an investment holding company with offices in NY, Hong Kong, and Toronto, that has the financial resources to continue growing the business, expanding the product portfolio, investing in the people and facilities, and rapidly expanding the global reach of the business to new customers. PSPI will be part of a portfolio of global businesses that focus on niche products and markets in the value-added paper and coatings distribution business.
The mill’s current management team will remain in place following the sale, and all employees will transition to PSPI following the completion of the sale.
Friday, June 06, 2008
Paper Mill Revived
In 2000, the Newton Falls Paper Mill was one of 600 Paper mills operating in the USA when it closed later that year. The mill's story was not to dissimilar to the shuttered mills in Great Barrington, MA., Augusta, GA., Lufkin, TX., Brewer, ME., and Deferiet, NY. - older equipment that could not produce product as economically as the newer, bigger machines. However, the story was quit different for the Newton Falls, NY facility - they found an investor (funding $20milllion to acquire the mill) and many of the workers continued to believe in the mill's survival - the mill reopened recently and is manufacturing 200 tons a day of coated paper. The plant runs 24 hours a day - 7 days a week supplying paper to such important companies as WalMart, and Jessica Seinfield's cookbook. With all the recent mill closures, it is nice to learn of a mill that survived!
Tuesday, June 03, 2008
Text and Cover Paper Prices also Increase
The small specialty mills, which produce Text and Cover grades such as Wausau, Neenah, Mohawk, and Smart, are all talking about a price increase. The biggest challenge is the advancement of energy cost. Recent announcements for pulp have also added pressure to producers for a price increase. Crane & Company did officially announce a price increase of 5-7% depending of the grade. In Crane’s case, they added the additional factor of spiraling costs for the cotton fiber. Crane’s announcement is for shipments after June 20th. Stay tuned for more changes. Paper.com is still able to ship at current pricing, until June 20th.
Who’s NOT on the Web?
I quote interesting stats from article in Internet Retailer magazine
>55 million US Adults do not use the Internet at all
>36million adults over 62 (74%) do not shop on line
>12 million US Internet users will not shop online for fear of supplying personal and financial information
>34 million US households that have dial up (59%) will not shop on line (21million that have broadband – will not shop online)
>17 million African Americans (59%) do not shop on line
>19 million Hispanics (58%) do not shop on line
Meanwhile, 2007 yielded a 22% growth in online sales to $165.9billion. Websites such as Paper.com that cater to niche products are forecasted to continue to grow.
>55 million US Adults do not use the Internet at all
>36million adults over 62 (74%) do not shop on line
>12 million US Internet users will not shop online for fear of supplying personal and financial information
>34 million US households that have dial up (59%) will not shop on line (21million that have broadband – will not shop online)
>17 million African Americans (59%) do not shop on line
>19 million Hispanics (58%) do not shop on line
Meanwhile, 2007 yielded a 22% growth in online sales to $165.9billion. Websites such as Paper.com that cater to niche products are forecasted to continue to grow.
Carriers all announce price Increases
Websites such as Paper.com continue to negotiate hard with truckers and carriers such as UPS, DHL, and FEDEX to hold prices – but all have announced increases due to gas prices. Even the United States Postal Service went up in May! Until the price at the pump stabilizes, we fear additional increases.
Paper.com thinks Green
As a leading online paper website, Paper.com recently introduced over 1000 items of environmentally friendly items to the site, and continue to add items daily. The company also has selected UPS as its primary carrier because of its ‘green’ position
Did you know-
>UPS was the first to begin testing for alternative fuels to power its fleet? The company now has 1600 Compressed Natural Gas (CNG), hybrid electric, and electric/propane powered vehicles on the road
>UPS uses cutting edge route optimization systems to determine most efficient routes, using less fuel.
>UPS leads the airline industry in deploying noise and emission reducing technologies.
>UPS uses innovative packaging which range from eco friendly to reusable boxes and envelopes
>UPS encourages all end users to electronically communicate for a paperless experience.
Did you know-
>UPS was the first to begin testing for alternative fuels to power its fleet? The company now has 1600 Compressed Natural Gas (CNG), hybrid electric, and electric/propane powered vehicles on the road
>UPS uses cutting edge route optimization systems to determine most efficient routes, using less fuel.
>UPS leads the airline industry in deploying noise and emission reducing technologies.
>UPS uses innovative packaging which range from eco friendly to reusable boxes and envelopes
>UPS encourages all end users to electronically communicate for a paperless experience.
Recent Printer Survey Results in
PIA/GAT reported on results from a recent survey-
23.8% of printers sited the most significant challenge for 2008 will be competition and pricing; followed by 16.8% stated inconsistent sales volume; and 15.7 claimed soft demand.
Meanwhile, printers that focused on direct mail printing grew in 2007 by 4.25%; Book printers saw growth of 2.27%; general commercial printers grew 2.09%; and quick printers enjoyed 0.73%
23.8% of printers sited the most significant challenge for 2008 will be competition and pricing; followed by 16.8% stated inconsistent sales volume; and 15.7 claimed soft demand.
Meanwhile, printers that focused on direct mail printing grew in 2007 by 4.25%; Book printers saw growth of 2.27%; general commercial printers grew 2.09%; and quick printers enjoyed 0.73%
The Dust is Settling at NewPage Paper Company
As a result of the acquisition of Stora Enso’s North American division to NewPage, much restructuring has occurred. The combined company has announced it has streamlined its coated web lines including the discounted Focus Plus, Nova Press, Advantage, Polaris Press, and CapriPress.
Thursday, May 29, 2008
Paper.com Continues as One of USA’s Largest Paper Websites
Paper executive, P. Scott Vallely and Internet expert, John Engel, the two co founders, recently announced that Paper.com LLC has been awarded top 500 Internet Retail sites in USA for 2007/08. The website, which exclusively markets paper items, has made the IR500 list every year since it was first published three years ago. With nearly 40,000 items on site, ranging from copy papers to photographic papers to scrapbook papers to handmade and exotic papers they are one of the biggest paper internet marketers. The two founders recently introduced an additional store to the site, which markets thousands of environmentally friendly papers. This new store joins the already popular stores that include Stationery, Office, School, Theme, Scrapbook, Seasonal, and Art Papers. The Paper.com site also has many links to educational Blogs, major paper mills, instruction on how to buy paper, and a conversion chart from grams to domestic weights. Paper.com is a primary online source for quality paper products.
Coated Groundwood Publication Prices Increase …. Again
As reported last month, prices rose $60/ton in April on most publication grades, and they rose
$75/ton for No. 5 40-lb offset rolls. The industry witnessed shipments advanced an impressive 10.3%. Recently, Verso has announced a $50/ton price increases on virtually all of its grades of coated free sheet, light-weight coated /publication and super-calendered (SC) papers. The increases are effective on orders shipping after July 1.
The timing of the increases would allow producers to capture the seasonally-strong late summer/autumn magazine & catalog season. The producers are all attempting to increase prices and recover rising costs.
As a side note, last week, Bloomingdales announced that it is eliminating its mail order catalog. Also, Abitibi-Bowater suggested it could add capacity to this market by converting more newsprint mills to coated paper mills.
$75/ton for No. 5 40-lb offset rolls. The industry witnessed shipments advanced an impressive 10.3%. Recently, Verso has announced a $50/ton price increases on virtually all of its grades of coated free sheet, light-weight coated /publication and super-calendered (SC) papers. The increases are effective on orders shipping after July 1.
The timing of the increases would allow producers to capture the seasonally-strong late summer/autumn magazine & catalog season. The producers are all attempting to increase prices and recover rising costs.
As a side note, last week, Bloomingdales announced that it is eliminating its mail order catalog. Also, Abitibi-Bowater suggested it could add capacity to this market by converting more newsprint mills to coated paper mills.
Recycling and the paper industry
Recycling certainly is not a new practice in the pulp and paper industry, driven by the recent need to be more sustainable. It has been going on for hundreds of years, and is generally practiced today in certain grade areas because it is economically feasible and attractive to do so, though some limited recycling is driven (or mandated) by environmental legislation in
various states and countries.
Today, very high percentages of waste paper streams are being recycled, especially in the Western world. In 2007, a record 56% of paper consumed in the U.S. was recovered for recycling, compared with 33.5% in 1990, according to the American Forest and Paper Association Paper recovery now averages approximately 360 pounds per person in the U.S.,
where the goal is 60% recovery by 2012.
In 2007, recovered fiber accounted for about 37% of the raw product used in U.S. paper mills, and 140 mills used recovered fiber exclusively, according to AF&PA figures. The environmental impact is evident in the fact that every ton of paper that is recovered saves 3.3 cubic yards of landfill space. Paper recycling activities in European countries are similar to those in the U.S., with some percentages being even higher. Although recycling has obvious environmental advantages, there are some drawbacks or developing problems that have to be considered. In regard to sustainability, for example, there is some irony in the fact that as higher percentages of waste papers and board are recovered, the more difficult and costly it becomes to establish and maintain operations based on these streams, and certain environmental tradeoffs also arise.
There also have been energy concerns in regard to some deinking/recycling processes versus corresponding virgin pulping processes. But these issues have not been resolved, and it is still unclear whether certain recycling operations might be less or more energy efficient than their virgin counterparts, and have a bigger or smaller carbon footprint.
various states and countries.
Today, very high percentages of waste paper streams are being recycled, especially in the Western world. In 2007, a record 56% of paper consumed in the U.S. was recovered for recycling, compared with 33.5% in 1990, according to the American Forest and Paper Association Paper recovery now averages approximately 360 pounds per person in the U.S.,
where the goal is 60% recovery by 2012.
In 2007, recovered fiber accounted for about 37% of the raw product used in U.S. paper mills, and 140 mills used recovered fiber exclusively, according to AF&PA figures. The environmental impact is evident in the fact that every ton of paper that is recovered saves 3.3 cubic yards of landfill space. Paper recycling activities in European countries are similar to those in the U.S., with some percentages being even higher. Although recycling has obvious environmental advantages, there are some drawbacks or developing problems that have to be considered. In regard to sustainability, for example, there is some irony in the fact that as higher percentages of waste papers and board are recovered, the more difficult and costly it becomes to establish and maintain operations based on these streams, and certain environmental tradeoffs also arise.
There also have been energy concerns in regard to some deinking/recycling processes versus corresponding virgin pulping processes. But these issues have not been resolved, and it is still unclear whether certain recycling operations might be less or more energy efficient than their virgin counterparts, and have a bigger or smaller carbon footprint.
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