From a recent MRI report-
In the Mediamark Research & Intelligence Survey of the American Consumer, findings show that 91% of e-reader owners read magazines, reading on average 13 magazines each month. This is higher than the US adult population in general, of which 84% read magazines reading an average of 11 magazines/month. E-reader owners also appreciate and value the benefits of magazines more, i.e. they are 26% more likely than an avg adult to say magazines relax them, 20% more likely to report that magazines make them think and 11% more likely to feel that magazines give them good ideas. This is a good indication of the potential of these devices to become strong magazine platforms in the future. MRI ‘s Survey of the American Consumer interviews 26,000 US adults, aged 18+, in their homes each year, with results being projectable to the entire US adult population. Data is released twice yearly, in the spring and fall.
Friday, April 16, 2010
Thursday, April 15, 2010
Heard in the market – Uncoated price Increase
We have released several pieces on the recent uncoated paper price increases and many of you have commented. The most recent announcement of $60/ton for May, follows a $40/ton price increase in April. This will bring cut-size office paper list prices to $1,050 to $1,100/ton or an average $1,075.
Buyers polled by Purchasing.com say March delivered prices averaged $1,090. Forms bond dipped under $1,000 last April and for the past year have averaged $978/ton, delivered. PPI Pulp & Paper Week says forms bond list has averaged $985for the past year, as compared with $1,115 a year-ago-March.
Buyers polled by Purchasing.com say March delivered prices averaged $1,090. Forms bond dipped under $1,000 last April and for the past year have averaged $978/ton, delivered. PPI Pulp & Paper Week says forms bond list has averaged $985for the past year, as compared with $1,115 a year-ago-March.
AF&PA Reports on First Quarter
Yesterday, we issued a release from UBS on the industry, today, the American Forest and Paper Association reported preliminary printing and writing paper increased 10.7% (4.435 million tons)in the first quarter of 2010.
Total coated paper shipments through 1Q rose 20% to 1.743 million tons with coated freesheet volume up 17.1% to 881,700 tons and coated mechanical shipments up 23%, to 860,000 tons. Total uncoated paper shipments rose 5.4% to 2.692 million tons in 1Q with uncoated mechanical shipments up 27.3% vs. last year, and uncoated freesheet up 2.2% to 2.275 million tons.
Note, these statistics are still preliminary (and slightly different than UBS). Of particular note - both reports illustrate increased demand.
Total coated paper shipments through 1Q rose 20% to 1.743 million tons with coated freesheet volume up 17.1% to 881,700 tons and coated mechanical shipments up 23%, to 860,000 tons. Total uncoated paper shipments rose 5.4% to 2.692 million tons in 1Q with uncoated mechanical shipments up 27.3% vs. last year, and uncoated freesheet up 2.2% to 2.275 million tons.
Note, these statistics are still preliminary (and slightly different than UBS). Of particular note - both reports illustrate increased demand.
Increased Pulp Prices Could Hurt Global Paper Industry
Although the vast majority of USA paper producers are integrated (produce pulp on site), the smaller mills must purchase fiber at market pricing. In contrast, nearly all of the European and Asian paper producers are non integrated and must buy pulp. This model, over the past several years, with depressed pulp prices, has been advantageous. However, with the current aggressive price increases, the non integrated mills are experiencing dynamic cost increases. Also, the foreign mills must also contend with the stronger US Dollar.
Two large USA mills to watch that buy fiber include Wausau and NewPage. Clearly, without the support of the black liquor credit and, now, fiber increases, their margins will be under pressure.
Two large USA mills to watch that buy fiber include Wausau and NewPage. Clearly, without the support of the black liquor credit and, now, fiber increases, their margins will be under pressure.
Wednesday, April 14, 2010
Preliminary Printing and Writing Paper Figures for March
Based on recent UBS report-
UBS reported that coated freesheet shipments in the USA in March increased 27.1% vs. last year, the 5th consecutive month of growth reaching the highest level since Oct 2008. Coated groundwood shipments rose 33.9% vs. last year, also the 5th consecutive month of growth. Both grades were compared against easy baselines last March. Uncoated groundwood shipments increased 26.5% vs. last year, but uncoated freesheet paper was a bit weak, almost flat with last year. Note, these are preliminary figures.
UBS reported that coated freesheet shipments in the USA in March increased 27.1% vs. last year, the 5th consecutive month of growth reaching the highest level since Oct 2008. Coated groundwood shipments rose 33.9% vs. last year, also the 5th consecutive month of growth. Both grades were compared against easy baselines last March. Uncoated groundwood shipments increased 26.5% vs. last year, but uncoated freesheet paper was a bit weak, almost flat with last year. Note, these are preliminary figures.
Advertising Pages Suffered in First Quarter
The all important index of advertising pages for magazines fell 9.4% in the first quarter of 2010 to 34,800 pages (compare to 1Q2009). This was a disappointment for most publishers, hoping the improved economy would turn the trend around. It was especially frustrating in that 2009 ad pages for the first quarter were down nearly 26% from 2008 to 37,200.
Comparing 1Q2010 to 2009, financial, insurance, and real estate actually saw an increase of 11.3% and cosmetics were up 7.6%; however, apparel and accessories were down 15.7%, pharmaceuticals down 15.6%, transportation and hotels down 13%, and media was down 13%. Fewer advertising pages generally translates into less editorial pages, as well, which means less paper consumed.
Comparing 1Q2010 to 2009, financial, insurance, and real estate actually saw an increase of 11.3% and cosmetics were up 7.6%; however, apparel and accessories were down 15.7%, pharmaceuticals down 15.6%, transportation and hotels down 13%, and media was down 13%. Fewer advertising pages generally translates into less editorial pages, as well, which means less paper consumed.
Tuesday, April 13, 2010
Paper Demand and Prices continue Up
Demand and prices continue their upward trend for both pulp and paper. In almost every paper and pulp grade, tight markets and elevated costs are pushing prices higher. Supply is down and demand (versus a depressed 2009) appear up. Perhaps the most notable advanced pricing initiative is in containerboard, where producers announced $60/ton
increase for April 1, immediately after a $50/ton increase in January. Producers sight improving demand, lean inventories, limited capacity, and higher costs all create a good environment for price increases.
As reported recently in the Coy Paper releases, all uncoated paper producers for literally all free sheet uncoated markets have announced a $60/ton price hike for early May.
increase for April 1, immediately after a $50/ton increase in January. Producers sight improving demand, lean inventories, limited capacity, and higher costs all create a good environment for price increases.
As reported recently in the Coy Paper releases, all uncoated paper producers for literally all free sheet uncoated markets have announced a $60/ton price hike for early May.
USA Printing Shipments Down in February
USA commercial printing shipments dropped 7.2% in February, reaching $6.57 billion. Shipments were down 6.4%, for the first two months of 2010 indicating a yearly forecast of approximately $82-84 million.
Increased paper prices and the recent advancement of EReaders will not help this trend.
Increased paper prices and the recent advancement of EReaders will not help this trend.
International Paper Introduces Environmental website
International Paper launched its new environmental website, Down2earthonline.com. The site reviews issues to assist consumers to better understand some of the myths and misconceptions of recycled paper. By educating those inside our industries, customers and end users can better understand these complex environmental issues and the steps that the forest products and printing industries are taking to become more sustainable and make positive contributions to our world.
As we have written in our past releases, the paper industry continues to be a good environmental stewart, yet, have not done a good job promoting this fact.
As we have written in our past releases, the paper industry continues to be a good environmental stewart, yet, have not done a good job promoting this fact.
Thursday, April 08, 2010
Another Day, another Uncoated Free Sheet Price Increase
International Paper and Domtar announced a $60/ton uncoated free sheet price increase for May shipments. The initiative applies to desk top / copier paper, offset, and converting grades such as envelope. This is the second price increase for 2010.
Current pricing for cutsize business paper is $1050-1100/ton; rolls are $885-900/ton
We assume the remaining producers, such as Boise, Wausau Paper, & Glatfelter will also increase.
Current pricing for cutsize business paper is $1050-1100/ton; rolls are $885-900/ton
We assume the remaining producers, such as Boise, Wausau Paper, & Glatfelter will also increase.
Europe Reports on Strong Shipments
Report from CEPIFINE
CEPIFINE reported that fine paper shipments in Europe increased in Feb, both domestically and exports. Coated woodfree shipments rose 10.9% to 633,000 tonnes, with domestic deliveries up 7% to 501,000 tonnes and exports up 2% to 104,000 tonnes. Uncoated woodfree shipments rose 12.1% to 647,000 tonnes, with domestic up 4.8% to 543,000 tonnes and exports up 120% to 132,000.
CEPIFINE reported that fine paper shipments in Europe increased in Feb, both domestically and exports. Coated woodfree shipments rose 10.9% to 633,000 tonnes, with domestic deliveries up 7% to 501,000 tonnes and exports up 2% to 104,000 tonnes. Uncoated woodfree shipments rose 12.1% to 647,000 tonnes, with domestic up 4.8% to 543,000 tonnes and exports up 120% to 132,000.
Digital Book Publishing may Grow Faster
The digital media already has built in efficiencies – no warehouse costs, no make ready, cost effective small runs, no need to repulp the unsold books, and zero inventory, to name a few. Other advantages include quick turnarounds as well as provide the ability for unknown authors to publish and distribute a book.
The forecast is for growth of digital publications to increase to 15-20% of the print volume over the next 5 years. This would yield a market share of 10% by 2013 and 15% by 2015. Printed books reached their peak with sales of 3.13Million units in 2007.
I would assume if EReaders, like the recently introduced IPAD, continues to grow, it may come at the cost of printed material. That said, it may also bring more people to books and magazines and assist Digital publishing and printed books and magazines, at least short term.
The forecast is for growth of digital publications to increase to 15-20% of the print volume over the next 5 years. This would yield a market share of 10% by 2013 and 15% by 2015. Printed books reached their peak with sales of 3.13Million units in 2007.
I would assume if EReaders, like the recently introduced IPAD, continues to grow, it may come at the cost of printed material. That said, it may also bring more people to books and magazines and assist Digital publishing and printed books and magazines, at least short term.
Wednesday, April 07, 2010
Sales Down for Label Giant Avery Dennison
Avery Dennison reported sales revenue of $6Billion for 2009, a decline of 11 percent from $6.7 billion in 2008. Net sales in the company’s pressure sensitive materials segment, which comprises 56% of its business, decreased 9% last year after a 4% gain in 2008. The company also reported a loss in net income of $746.7Million.
Avery Dennison's CEO reported “Sales volumes dropped during the first half of the year as customers substantially reduced inventories and recovered only modestly later in the year”.
Avery Dennison's CEO reported “Sales volumes dropped during the first half of the year as customers substantially reduced inventories and recovered only modestly later in the year”.
USA Printers Profitable in 2009
As reported in these releases in past, the USA commercial printers witnessed declines in volume; however, with respective cost reductions, the industry recorded a $700Million profit in 2009.
There are still challenges ahead. Shipments for January and February dropped 6.4% vs. 2009 and it is difficult to remain profitable with declining volume.
There are still challenges ahead. Shipments for January and February dropped 6.4% vs. 2009 and it is difficult to remain profitable with declining volume.
Tuesday, April 06, 2010
IPAD Introduction Could be Game Changer
As I am sure all our readers are more than aware, Apple introduced the IPAD and sold
over 300,000 IPADs. By comparison, they sold 270,000 iPhones when first available in 2007.
Initial reports reveal, many magazine customers are embracing the new format for print but appear upset at the 'excessive' prices for single issues.
Magazines are pinning their hopes on the EReaders and hope that, like the cel phone, MP3, and lap top, that Apple and IPAD will greatly assist the current decline in publication circulation and advertising revenue. But, these companies need to be careful on pricing so they do not alienate readers.
over 300,000 IPADs. By comparison, they sold 270,000 iPhones when first available in 2007.
Initial reports reveal, many magazine customers are embracing the new format for print but appear upset at the 'excessive' prices for single issues.
Magazines are pinning their hopes on the EReaders and hope that, like the cel phone, MP3, and lap top, that Apple and IPAD will greatly assist the current decline in publication circulation and advertising revenue. But, these companies need to be careful on pricing so they do not alienate readers.
Pulp and Paper Producers continue to Go Green
from Wood Resource Quarterly-
The global pulp and paper industry has substantially increased its use of woody biomass for energy the past few years, which has consequently reduced dependence on fossil fuels, reports the Wood Resource Quarterly. Since 2006, energy generated from biomass has gone up over 50%, last year accounting for 18% of the total energy consumption by this industry sector. Pulp and paper manufacturers worldwide consumed 75 million tons of woody biomass for energy in 2009.
The global pulp and paper industry has substantially increased its use of woody biomass for energy the past few years, which has consequently reduced dependence on fossil fuels, reports the Wood Resource Quarterly. Since 2006, energy generated from biomass has gone up over 50%, last year accounting for 18% of the total energy consumption by this industry sector. Pulp and paper manufacturers worldwide consumed 75 million tons of woody biomass for energy in 2009.
Price Increase for Containerboard a 'done deal'
Shipments for both January and February (and early reports for March) on box shipments
appear strong and, therefore, all the major producers have announced a 10% box price increase for April shipments. Note, Coy Paper confirmed a $60/ton April containerboard price increase announcement. This new announcement will be the second increase of 2010. Not only is demand stronger than 2009, but inventories are declining and operating rates are hoovering in the mid 90's.
appear strong and, therefore, all the major producers have announced a 10% box price increase for April shipments. Note, Coy Paper confirmed a $60/ton April containerboard price increase announcement. This new announcement will be the second increase of 2010. Not only is demand stronger than 2009, but inventories are declining and operating rates are hoovering in the mid 90's.
Pulp Market Update
Consistent with the Coy Paper recent releases, the global pulp market remains tight and the major producers have announced $50/MT increase for April. The real story is spot prices in the USA have increased sharply, with spot NBSK up $20/MT to almost $850/MT. Manufacturers in Chile are bringing to restart capacity, this will provide some relief to supply (and pricing) pressure.
World inventories are low, demand appears increased, and spring is generally the time most mills conduct maintenance; accordingly, do not look for much relief, short term.
Pricing recap
$50/MT for April; NBSK to $960/MT for North America
World inventories are low, demand appears increased, and spring is generally the time most mills conduct maintenance; accordingly, do not look for much relief, short term.
Pricing recap
$50/MT for April; NBSK to $960/MT for North America
Friday, April 02, 2010
Economics of Printed versus Digital Books
The IPAD will be introduced this weekend, and we thought it a good time to review the economics of Digital versus print.
The New York Times recently documented an article describing the economics of producing a traditional printed hard cover book and a digital book. They state the typical hardcover retails for $26.00, and the publisher generally is compensated 50% or $13.00 of this price. The publisher than must pay approximately $3.25/book for printing, warehousing, and shipping the book to the store. The publisher also pays a 15% royalty ($$3.90) to the author, $1.00/book for marketing, and about 3% or 0.80/book for design and editing. Accordingly, the publisher is left with about $4.00/book before paying staff and overhead expenses.
The current agreement with Digital distributors is to compensate the publisher 30%, or $9.00/book on a book retailing for $12.99 (or $7.00 for a book retailing for $9.99 – the level most are now looking at). Costs are lower than a printed book, outlined as 0.50 to convert the text to a digital file and .0.78 to market the book. The royalty is still being worked out, but currently most authors are settling in at 25% of the digital price or about $3 for the $12.99 retail or $2.50 for the $9.99 price. Given the math, the author makes slightly less, but hopefully sells more books, meanwhile the publisher makes slightly more.
Currently digital books make up a very small percentage of the market, but the growth potential is large.
Will you be making the switch from hard bound to tablet?
The New York Times recently documented an article describing the economics of producing a traditional printed hard cover book and a digital book. They state the typical hardcover retails for $26.00, and the publisher generally is compensated 50% or $13.00 of this price. The publisher than must pay approximately $3.25/book for printing, warehousing, and shipping the book to the store. The publisher also pays a 15% royalty ($$3.90) to the author, $1.00/book for marketing, and about 3% or 0.80/book for design and editing. Accordingly, the publisher is left with about $4.00/book before paying staff and overhead expenses.
The current agreement with Digital distributors is to compensate the publisher 30%, or $9.00/book on a book retailing for $12.99 (or $7.00 for a book retailing for $9.99 – the level most are now looking at). Costs are lower than a printed book, outlined as 0.50 to convert the text to a digital file and .0.78 to market the book. The royalty is still being worked out, but currently most authors are settling in at 25% of the digital price or about $3 for the $12.99 retail or $2.50 for the $9.99 price. Given the math, the author makes slightly less, but hopefully sells more books, meanwhile the publisher makes slightly more.
Currently digital books make up a very small percentage of the market, but the growth potential is large.
Will you be making the switch from hard bound to tablet?
Coated Paper Capacity Forecasted to Decline
AF&PA recently published a report on capacity, included is executive summary-
The annual survey of the American Forest & Paper Association reported declines in the U.S. capacity for all of the Printing & Writing Paper grades, excepting uncoated mechanical. Coated mechanical capacity fell -10.4% in 2009 and is forecast to decline by -6.8% in 2010 and -1.9% in 2011, remaining flat in 2012. Coated woodfree capacity in the U.S. decreased by -11.8% in 2009 and is projected to fall -4.3% in 2010 and remain unchanged in 2011 and 2012. Uncoated woodfree declined -5.4% for last year, but it has decreased -25% since 2000. Further decreases are forecast for 2010, -6.3% and 2011, -0.7%. There is no change forecast for 2012. Of the four P&W paper grades, the only increase in 2009 was in uncoated mechanical capacity, 6.2%. Projected numbers indicate continued expansion: 4.8% in 2010, 1.6% in 2011 and 0.6% in 2012.
The annual survey of the American Forest & Paper Association reported declines in the U.S. capacity for all of the Printing & Writing Paper grades, excepting uncoated mechanical. Coated mechanical capacity fell -10.4% in 2009 and is forecast to decline by -6.8% in 2010 and -1.9% in 2011, remaining flat in 2012. Coated woodfree capacity in the U.S. decreased by -11.8% in 2009 and is projected to fall -4.3% in 2010 and remain unchanged in 2011 and 2012. Uncoated woodfree declined -5.4% for last year, but it has decreased -25% since 2000. Further decreases are forecast for 2010, -6.3% and 2011, -0.7%. There is no change forecast for 2012. Of the four P&W paper grades, the only increase in 2009 was in uncoated mechanical capacity, 6.2%. Projected numbers indicate continued expansion: 4.8% in 2010, 1.6% in 2011 and 0.6% in 2012.
Smart Papers Announces new Recycled Grade
U.S. papermaker SMART Papers introduced Knightkote® 50 brand, FSC-certified, premium matte coated line which will have the highest amount of post-consumer waste (PCW) and recycled fiber.
Knightkote 50—available in a 92-bright, cool-blue White and Creme—is a comprehensive selection of 70,80 and 100lb. text papers, 65,80,and 100-lb. cover papers, a 7 and 9pt. business reply card and a 130lb. double-thick cover.
Knightkote 50 can be used in all offset, digital printing and converting applications including advertising and marketing materials, direct mail, brochures, books, free standing inserts, premium packaging, greeting cards and more.
Mohawk Papers will distribute this sheet.
Knightkote 50—available in a 92-bright, cool-blue White and Creme—is a comprehensive selection of 70,80 and 100lb. text papers, 65,80,and 100-lb. cover papers, a 7 and 9pt. business reply card and a 130lb. double-thick cover.
Knightkote 50 can be used in all offset, digital printing and converting applications including advertising and marketing materials, direct mail, brochures, books, free standing inserts, premium packaging, greeting cards and more.
Mohawk Papers will distribute this sheet.
Thursday, April 01, 2010
Magazines stay the Course of Printed Publications
Notes from ABC report-
Print subscriptions remain the core of consumer magazines. As reported by the Audit Bureau of Circulations, 278 million print subscriptions were active in the second half of 2009. As AdAge reported, even if 5 million people buy the iPad and every one of them buys the digital version of their magazine, print is still by far the dominant format. The Internet is increasingly useful to magazines in other ways, though; not only does it provide a centralized database of names and information, but it also is a platform for selling subscriptions on-line. Hearst reported that 45% of its subscriptions were generated on the Internet, up from 5% in 2005. Rodale said web subscriptions for its titles were up 15-25%. Condé Nast said 25% of its total new subscriptions were added on-line. The five publishers in the coalition to create a new digital storefront will be selling on-line editions of their magazine, yes, but the new venue will also be selling print subscriptions.
Comments on print vs. digital for getting and reading your favorite publications?
Print subscriptions remain the core of consumer magazines. As reported by the Audit Bureau of Circulations, 278 million print subscriptions were active in the second half of 2009. As AdAge reported, even if 5 million people buy the iPad and every one of them buys the digital version of their magazine, print is still by far the dominant format. The Internet is increasingly useful to magazines in other ways, though; not only does it provide a centralized database of names and information, but it also is a platform for selling subscriptions on-line. Hearst reported that 45% of its subscriptions were generated on the Internet, up from 5% in 2005. Rodale said web subscriptions for its titles were up 15-25%. Condé Nast said 25% of its total new subscriptions were added on-line. The five publishers in the coalition to create a new digital storefront will be selling on-line editions of their magazine, yes, but the new venue will also be selling print subscriptions.
Comments on print vs. digital for getting and reading your favorite publications?
Burgo also Announces Coated Price Increase
Burgo joins the major European coated paper producers in their announcement of a 6-8% increase in coated mechanical paper prices, effective in May and an increase for coated woodfree in June. The price of uncoated woodfree will also jump in May. This Coy Paper news release reported earlier that Norske Skog, Myllykoski, Arctic Paper and Lecta cited their plans to raise prices to combat raw material cost increases particularly of pulp.
Catalyst Joins newsprint Price Increase
Catalyst will raise its 30 lb. newsprint prices to match the recent AbitibiBowater $25/MT on May 1 and $25/MTon June 1. Looks like all systems GO for this increase.
Wednesday, March 31, 2010
Price Increases are Announced for Europe
Due to increased costs, particularly for pulp, Norske Skog, Myllykoski, Arctic Paper and Lecta have announced coated paper increases. Effective with orders placed on or after April 1; Norske Skog will increase coated mechanical and supercalendered paper prices by Euro 35/MT and Myllykoski will raise the price of its publication papers by Euro 40/MT. Arctic and Lecta have announced increases of 10-12% for woodfree papers.
Surely, these increases will also effect USA purchases.
Surely, these increases will also effect USA purchases.
Newprint Prices to Increase
AbitibiBowater is the first to announce more price increases for Newsprint. The company has scheduled two newsprint price increases, for $25/MT each, for May 1 and June 1. The company had previously hiked prices twice this year, bringing the total scheduled for the first half of 2010 to an increase of $100/MT.
This additional cost is bad for the struggling newspapers, but the paper producers need it for survival!
This additional cost is bad for the struggling newspapers, but the paper producers need it for survival!
Monday, March 29, 2010
RISI Reports on State of Paper Industry
RISI reported the following on the Graphic Paper Outlook
John Maine, RISI’s VP of World Graphic Papers, said that although the USA leading economic indicators are the strongest in 5 years, “in paper, it doesn’t feel that way”. In 2009, world demand for printing/writing paper dropped 10% overall, with the biggest decline seen in coated papers, which fell 13-15%. He predicted that Printing and Writing paper would be flat in 2010, with uncoated freesheet stable and coated paper the strongest to come back, noting that Jan-Feb 2010 saw coated paper shipments up 6%. Both magazine advertising spending and catalog circulation are expected to drop 3% in 2010, a great improvement over the double-digit declines of 2009, but still a reduction. Through 2011, he sees the world market facing overcapacity, especially in coated freesheet, due to the more than 4Million tons of new Coated Free capacity coming online in China.
John Maine, RISI’s VP of World Graphic Papers, said that although the USA leading economic indicators are the strongest in 5 years, “in paper, it doesn’t feel that way”. In 2009, world demand for printing/writing paper dropped 10% overall, with the biggest decline seen in coated papers, which fell 13-15%. He predicted that Printing and Writing paper would be flat in 2010, with uncoated freesheet stable and coated paper the strongest to come back, noting that Jan-Feb 2010 saw coated paper shipments up 6%. Both magazine advertising spending and catalog circulation are expected to drop 3% in 2010, a great improvement over the double-digit declines of 2009, but still a reduction. Through 2011, he sees the world market facing overcapacity, especially in coated freesheet, due to the more than 4Million tons of new Coated Free capacity coming online in China.
Thursday, March 25, 2010
Pulp Prices continue to Rally
Coy Paper's current News on the pulp and paper Industry continues to report on the tightening of the world pulp supply and that global prices have soared. We firmly predict that North American pulp prices are heading toward 15-year highs. Accordingly, paper and packaging materials will also increase.
Our past releases have included supply disruptions in Chile and Finland, two large producing countries supplying almost 12% of the world's annual pulp demands, coincided with a recovery in demand in China. Pulp is the raw material used to manufacture newsprint, fine paper, magazine paper and cardboard.
The two week strike at the Finnish ports resulted in plant shut downs in Finland and much of Chile's 4Million tons of annual market pulp is out of production due to the earthquake and tsunamis.
The March transaction price for Northern bleached softwood kraft of $890/MT is just under list of $910, past the 2008 cyclical high of $880 and heading toward the $925 transaction peak in the fourth quarter of 1995. Northern bleached hardwood kraft, at $785/MT spot this month, compares with $820 list and still has a way to go to reach the $865 peak in late 1995.
Our past releases have included supply disruptions in Chile and Finland, two large producing countries supplying almost 12% of the world's annual pulp demands, coincided with a recovery in demand in China. Pulp is the raw material used to manufacture newsprint, fine paper, magazine paper and cardboard.
The two week strike at the Finnish ports resulted in plant shut downs in Finland and much of Chile's 4Million tons of annual market pulp is out of production due to the earthquake and tsunamis.
The March transaction price for Northern bleached softwood kraft of $890/MT is just under list of $910, past the 2008 cyclical high of $880 and heading toward the $925 transaction peak in the fourth quarter of 1995. Northern bleached hardwood kraft, at $785/MT spot this month, compares with $820 list and still has a way to go to reach the $865 peak in late 1995.
Wednesday, March 24, 2010
News from AF&PA Meetings
The American Forest & Paper Association is currently conducting their annual meeting in NYC and reported that USA paper and paperboard capacity dropped 2.5% in 2009 to 93.9 million tons, with 2010 capacity expected to decline 3.4% followed by stability in 2011 and 2012. In 2009, 14 US mills were permanently closed, shutting down 16 paper and paperboard machines, with an additional 11 machines permanently closed at other mills. Other machines and mills have been indefinitely idled and may be restarted in the future. AF&PA represents 90% of USA industry capacity.
Forecast is Growth in Demand for PaperBoard
According to market research firm Freedonia Group in a study titled “Corrugated & Paperboard Boxes,” demand for corrugated and paperboard boxes is projected to increase 2.4% annually through 2014 to $36.4 billion. Gains will be driven by an expansion in manufacturing output after the real declines registered during the 2004-2009 period. In particular, an acceleration in shipments of nondurable goods, such as food and beverages, will support demand for related boxes.
The study reported that sales of corrugated and solid fiber boxes accounted for more than 70% of demand in 2009, and advances will be aided by their well-entrenched position as the shipping container of choice in nearly all manufacturing sectors. Demand will also benefit from the favorable environmental profile of corrugated boxes, which will become increasingly important as producers continue to seek ways to adopt sustainable packaging practices. Moreover, the study claims, value gains will be bolstered by heightened demand for more costly linerboard grades that can support high-quality printing and graphics.
Further, demand for folding paperboard boxes will rise 1.8% per annum through 2014, slower than the corrugated box pace, as folding cartons face stiff competition from alternative packaging (e.g., pouches, blister packs and clamshells) in many markets. Source reduction efforts will also restrain demand. However, the study indicates, gains will be supported by advances in printing and graphics capabilities and a more favorable environmental profile than plastic packaging. Set-up box demand will be supported by their widespread use in high-end confectionery, silverware, and jewelry applications.
Food and beverages will remain the largest box market, accounting for 45% of demand in 2014, the report reveals. Good prospects for boxes are expected in markets such as frozen foods, dairy products, and meat, poultry and seafood products. Other nondurable goods markets offering favorable opportunities for boxes include cosmetics and toiletries, and rubber and plastic products. In the durable goods sector, box demand will post healthy gains in the machinery and equipment, motor vehicle parts, and instruments markets as both industrial machinery and automotive industries recover from sharp declines in the 2004-2009 period. In nonmanufacturing markets such as retail shipping and carry-out foodservice, box demand will be supported by consumer preferences for online shopping and food prepared or eaten away from home.
The study reported that sales of corrugated and solid fiber boxes accounted for more than 70% of demand in 2009, and advances will be aided by their well-entrenched position as the shipping container of choice in nearly all manufacturing sectors. Demand will also benefit from the favorable environmental profile of corrugated boxes, which will become increasingly important as producers continue to seek ways to adopt sustainable packaging practices. Moreover, the study claims, value gains will be bolstered by heightened demand for more costly linerboard grades that can support high-quality printing and graphics.
Further, demand for folding paperboard boxes will rise 1.8% per annum through 2014, slower than the corrugated box pace, as folding cartons face stiff competition from alternative packaging (e.g., pouches, blister packs and clamshells) in many markets. Source reduction efforts will also restrain demand. However, the study indicates, gains will be supported by advances in printing and graphics capabilities and a more favorable environmental profile than plastic packaging. Set-up box demand will be supported by their widespread use in high-end confectionery, silverware, and jewelry applications.
Food and beverages will remain the largest box market, accounting for 45% of demand in 2014, the report reveals. Good prospects for boxes are expected in markets such as frozen foods, dairy products, and meat, poultry and seafood products. Other nondurable goods markets offering favorable opportunities for boxes include cosmetics and toiletries, and rubber and plastic products. In the durable goods sector, box demand will post healthy gains in the machinery and equipment, motor vehicle parts, and instruments markets as both industrial machinery and automotive industries recover from sharp declines in the 2004-2009 period. In nonmanufacturing markets such as retail shipping and carry-out foodservice, box demand will be supported by consumer preferences for online shopping and food prepared or eaten away from home.
Tuesday, March 23, 2010
ContainerBoard Supply Continues to Tighten
Consistent with Coy Paper's past reports, the containerboard market is witnessing an increase in shipments (up 6% February 10 vs 09) and lower inventories (down 97,000 tons). Exports remain strong and operating rates are hoovering at 95%. Most USA producers have announced a $60/ton price increase and the European manufacturers are beginning to also report increases.
Neenah Paper Announces Organizational Changes
Neenah Paper reported that John P. O'Donnell will be the Chief Operating Officer, reporting to Sean Erwin, Chairman and Chief Executive Officer, effective June 1. Mr. O'Donnell has been President of Neenah's Fine Paper segment.
Worldcolor to Close Printing Plant
Worldcolor reported it will close another facility, Dyersburg, TN, in early 2011. This location joins four others Coy Paper had announced earlier, Carroll IA, Oberlin OH, Bromont QB, and Richmond ON. The Tennessee plant has rotogravure and web offset capabilities and printed magazines, catalogs and freestanding inserts.
Monday, March 22, 2010
Apple’s IPAD Confirms Publishers for the EReader
Apple just confirmed an agreement with five of the six biggest publishers for books to be included on the IBookstore application. Although Random House is still considering working with Apple, Macmillian, Simon & Schuster, Hachette, HarperCollins, and Penguin have all signed up. Apple will market these publisher’s books on the IPAD and collect a 30% commission on the selling price.
Finnish Strike is Over
Union officials confirmed an agreement and this will end the Finnish stevedore strike. The Transport Workers’ Union and the employers’ representatives accepted a compromise. The strike began on March 4th, and has temporarily shut down 50% of paper production in Finland. Mills will restart gradually over a few days, to ensure paper quality reaches target level.
Caraustar Announces Paperboard Price Increase
Caraustar announced they will increase prices by $60 per ton on all uncoated recycled paperboard grades and $45 per ton on coated recycled paperboard grades produced by its mills. The increases are effective with shipments after April 5, 2010. Coy Paper notes that inventories are becoming tighter and demand up slightly; therefore, this increase should have limited challenges.
Carbonless Price Increase
M-Real has reported that they have experienced a significant increase in raw material costs, particularly pulp and logistic costs. Accordingly,M-real Zanders will increase prices for carbonless papers for deliveries after 19 April 2010 by 10%.
Friday, March 19, 2010
Update on Chilean Pulp & Paper Market
Reports from Chile after the earthquake and tsunami hit the country is that paper companies are making progress on restarting their operations, however, pulp mills are still idle, as their damage is more extensive. Chile’s only two newsprint suppliers, CMPC’s Inforsa mill and Norske Skog’s Bio Bio mill, are still closed. They have combined capacity of 340,000TPA of newsprint. This will artificially assist the USA newsprint producers.
Kruger Extends Downtime at Wayagamack Paper Mill
Kruger will extend the downtime of PM 3 at its Wayagamack Mill in Trois-Rivieres, Quebec, Canada for a period of one month starting March 31.
Kruger said the decision to extend downtime is the result of low demand for directory paper from the ongoing weak market conditions. Recall the Coy Paper news releases outlined this paper machine was shut down on December 31, 2009 with a planned restart set for March 31.
Production is now planned to resume on May 1.
PM 3 has the capacity to produce about 74,000 metric tons per year of directory paper.
Kruger said the decision to extend downtime is the result of low demand for directory paper from the ongoing weak market conditions. Recall the Coy Paper news releases outlined this paper machine was shut down on December 31, 2009 with a planned restart set for March 31.
Production is now planned to resume on May 1.
PM 3 has the capacity to produce about 74,000 metric tons per year of directory paper.
NewPage to Purchase Domtar Coated Product Lines
NewPage announced they reached an agreement with Domtar to purchase Domtar's coated groundwood paper product lines and all the respective accounts and book of business. The purchase will include the coated groundwood paper book of business, Choctaw, Saturn, and Jupiter brands.
Deutsche Bank reports on a Potential Additional Tax Credit
from Deutsche Bank - Equity Research
We have received some reports from our industry contacts that recent legislative moves may allow the industry to claim a Cellulosic Fuel credit (IRC 40(b)(6)) for Black Liquor produced and fired between 1/1/10 and the enactment date of the new bill (likely to be in next several days). This could produce a substantial 1Q10 windfall for kraft-based producers. The size of the cellulosic fuel credit is $1.01/gallon, rather than $0.50/gallon with Black Liquor. The cellulosic credit appears taxable, while the tax status of the black liquor credits is still an open question. It also appears that companies may have the ability to re-file for 2009 (depending on their tax situation) and claim the larger cellulosic credit, rather than the black liquor credit. Our contacts suggest that all the big four accounting firms as well as several law firms are currently working on this issue.
Thus, it is safe to assume most paper companies are digging into the
issue.
We have received some reports from our industry contacts that recent legislative moves may allow the industry to claim a Cellulosic Fuel credit (IRC 40(b)(6)) for Black Liquor produced and fired between 1/1/10 and the enactment date of the new bill (likely to be in next several days). This could produce a substantial 1Q10 windfall for kraft-based producers. The size of the cellulosic fuel credit is $1.01/gallon, rather than $0.50/gallon with Black Liquor. The cellulosic credit appears taxable, while the tax status of the black liquor credits is still an open question. It also appears that companies may have the ability to re-file for 2009 (depending on their tax situation) and claim the larger cellulosic credit, rather than the black liquor credit. Our contacts suggest that all the big four accounting firms as well as several law firms are currently working on this issue.
Thus, it is safe to assume most paper companies are digging into the
issue.
Update on Containerboard Market
Containerboard and box shipments for February were up 6.0% ! Also, inventories fell at mill and at box plants by 96.800 Tons - roughly 4.5%. More good news included the industry ran at 95% of capacity in February and USA containerboard exports totaled
319,000 tons, up 49.1% from 2009. This is all good news for the producers .... converters, look for price increases.
319,000 tons, up 49.1% from 2009. This is all good news for the producers .... converters, look for price increases.
Thursday, March 18, 2010
Many Paper Producers Announce Price Increases
Many of the major paper producers in North America recently announced price increases on coated, uncoated and supercalendered paper of about $30/ton effective with shipments on or after April 1st. Companies to announce so far include NewPage, Kruger, Verso, AbitibiBowater, Catalyst, Evergreen Packaging, Myllykoski, FutureMark, West Linn Paper and Irving Paper. Supply as a result of shuttered equipment is reduced, demand appears up, and the mills are grabbing this opportunity to announce new price levels. Look for the producers to attempt to raise prices throughout the year.
Update on Paper Markets for February
The stronger shipments were reported for most of the paper and pulp grades in February, as well as December and January, this will support our position that the business is now recovering and the paper industry, accordingly, is reviewing pricing increases.
Uncoated Papers
The Uncoated Freesheet shipments were up 5.7% from February 2009. This was the largest increase in over 3 years (Note, February 2009 vs 2008 was down 20.8%).
Mills such as International Paper and Domtar continue to take significant capacity reductions.
Coated Papers
Coated paper shipments also witnessed increased shipments.
Lightweight (publication) coated paper (LWC) shipments increased 21.0% versus February 2009 and coated free sheet increased 9.7%. (Note, last January, those two
categories posted declines of 37.4% and 24.6%, respectively).
Producers of coated free sheet will continue to benefit from duties recently announced for some Chinese and Indonesian imports and I suspect shipments will continue to advance.
Market Pulp
Domtar announced a $50/mton price increase in North America and Europe for both the NBSK and NBHK grades, effective April 1. If successful, the hike would be the 10th price increase in the last 12 months. The market has absolutely tightened as a result of both the Chile earthquake and strike at the Finnish ports. Additional market pulp producers that reported an increase include, Sodra's $40/ton April price hike on NBSK for Europe. Fibria announced a $50/mton global increase on (hardwood) BEK.
Reports suggest that the $30-50/mton price increase for March on softwood and hardwood grades in North America, Europe and Asia have gone through without much push back.
If the April price announcement is successful, NBSK pulp prices would
be up 50% from this time in 2009. NBSK (benchmark grade) pulp list price will be at $960/mton, up 30%.
Uncoated Papers
The Uncoated Freesheet shipments were up 5.7% from February 2009. This was the largest increase in over 3 years (Note, February 2009 vs 2008 was down 20.8%).
Mills such as International Paper and Domtar continue to take significant capacity reductions.
Coated Papers
Coated paper shipments also witnessed increased shipments.
Lightweight (publication) coated paper (LWC) shipments increased 21.0% versus February 2009 and coated free sheet increased 9.7%. (Note, last January, those two
categories posted declines of 37.4% and 24.6%, respectively).
Producers of coated free sheet will continue to benefit from duties recently announced for some Chinese and Indonesian imports and I suspect shipments will continue to advance.
Market Pulp
Domtar announced a $50/mton price increase in North America and Europe for both the NBSK and NBHK grades, effective April 1. If successful, the hike would be the 10th price increase in the last 12 months. The market has absolutely tightened as a result of both the Chile earthquake and strike at the Finnish ports. Additional market pulp producers that reported an increase include, Sodra's $40/ton April price hike on NBSK for Europe. Fibria announced a $50/mton global increase on (hardwood) BEK.
Reports suggest that the $30-50/mton price increase for March on softwood and hardwood grades in North America, Europe and Asia have gone through without much push back.
If the April price announcement is successful, NBSK pulp prices would
be up 50% from this time in 2009. NBSK (benchmark grade) pulp list price will be at $960/mton, up 30%.
Domtar Closes a Paper Mill
Domtar just announced it will permanently close its coated groundwood publication paper mill in Columbus, Mississippi. The Domtar coated groundwood paper mill has an annual production capacity of 238,000 tons of coated groundwood and 70,000 metric tons of thermo-mechanical pulp.
Friday, March 12, 2010
Chilian Earthquake Disrupts Pulp Supply
Notes from Deutsche Bank - Equity Research paper
Chile produces nearly 5Million MTA of market pulp or 8% of the world's supply. Nearly 80% of the pulp capacity is located within 150 miles of Concepción.
Reports from the region suggest that mills will be down for 30-60 days. Aftershocks could easily push the restarts back even further. If the entire Chilean industry is out for just 2 months, this could result in a loss of 800,000/MT.
Some analysts are predicting modest price gains of only $30-40/MT (3-5% increase). On the other extreme, some contacts in the pulp brokerage community are pointing to April list price increases of as much as $80-100/MT (9-11% increase). Deutsche Bank forecast is for April hikes in the $60/MT range.
Chile produces nearly 5Million MTA of market pulp or 8% of the world's supply. Nearly 80% of the pulp capacity is located within 150 miles of Concepción.
Reports from the region suggest that mills will be down for 30-60 days. Aftershocks could easily push the restarts back even further. If the entire Chilean industry is out for just 2 months, this could result in a loss of 800,000/MT.
Some analysts are predicting modest price gains of only $30-40/MT (3-5% increase). On the other extreme, some contacts in the pulp brokerage community are pointing to April list price increases of as much as $80-100/MT (9-11% increase). Deutsche Bank forecast is for April hikes in the $60/MT range.
OnLine Sales Continues to Grow
Notes from a Forrester Research Report-
Online retail sales, in the US, excluding auto, travel and drugs, grew 11% in 2009 to $155.2 billion or 6% of total. Forrester predicts 11% growth in 2010, reaching $172.9 billion or 7% of sales and similar growth annually through 2014, bringing online sales up to $248.7 billion by 2014.
The overall web-shopping audience is growing, up 4% in 2009 to represent 67% of the US online population. Forrester predicts consumer electronics to continue seeing double digit growth online, with apparel, accessories, footwear seeing a 17% growth online in 2009 and expecting over 10% growth for the next few years.
The trend for online sales is mirroring online/ Digital advertising.
Online retail sales, in the US, excluding auto, travel and drugs, grew 11% in 2009 to $155.2 billion or 6% of total. Forrester predicts 11% growth in 2010, reaching $172.9 billion or 7% of sales and similar growth annually through 2014, bringing online sales up to $248.7 billion by 2014.
The overall web-shopping audience is growing, up 4% in 2009 to represent 67% of the US online population. Forrester predicts consumer electronics to continue seeing double digit growth online, with apparel, accessories, footwear seeing a 17% growth online in 2009 and expecting over 10% growth for the next few years.
The trend for online sales is mirroring online/ Digital advertising.
Thursday, March 11, 2010
St Mary's Paper will Shut Down Paper machine
St. Marys Paper will close PM 5 at its Sault Ste Marie, Ontario mill. The machine has a capacity to produce 130,000MTA of SC-A paper. The mill’s other machines, PM3 and PM4, have been closed since December.
Catalyst May Restart Two Paper Machines
Catalyst has proposed a plan to the union that could restart 2 specialty paper machines at the Elk Falls paper mill. The Elk Falls mill is located in Richmond, BC with annual capacity of 153,000 tons of uncoated mechanical specialty paper and 373,000 tons of newsprint.
Advertising, both Print and Digital, will Grow
The Outsell research firm released an optimistic report on a forecast growth for both digital and printed advertising. The report also outlined digital advertising ($119.6Billion) may exceed print ($111.5Billion) for the first time. Magazine advertising spending is expected to increase 1.9% or $9.4Billion, including a 4.2% increase for consumer titles and 1% for B-to-B titles. One additional trend noted in the report was business to business advertisers see cross-media marketing as most effective.
Wednesday, March 10, 2010
Shipping Ports in Finland Remain on Strike
Following up on the Coy Paper earlier releases, the stevedores that work the ports in Finland remain on strike. The Finnish Transport Workers Union has forced several of the Finnish paper makers to cease operations. The mills are not able to receive raw materials, they are unable to warehouse finished paper, and most importantly, the paper mills can not ship paper.
Of notable mention, the following mills are shut down
-UPM shut down Rauma mill, capacity 720,000MT/YR, of coated mechanical and 540,000 mtpy of supercalendered paper
-Sappi closed its Kirkniemi mill, 740,000MT/YR of coated mechanical.
-UPM closing of Kaukas (Lappeenranta), 570,000MT/YR of coated mechanical and Kaipola, with 700,000MT/YR of coated mechanical, directory and newsprint papers
-UPM at Kymi, 850,000MT/YR of coated and uncoated woodfree capacity.
-Stora Enso will begin closing mills.
Negotiations with the stevedores continue. Finland has 25 major ports, 10 of which handle 75% of their exports.
Of notable mention, the following mills are shut down
-UPM shut down Rauma mill, capacity 720,000MT/YR, of coated mechanical and 540,000 mtpy of supercalendered paper
-Sappi closed its Kirkniemi mill, 740,000MT/YR of coated mechanical.
-UPM closing of Kaukas (Lappeenranta), 570,000MT/YR of coated mechanical and Kaipola, with 700,000MT/YR of coated mechanical, directory and newsprint papers
-UPM at Kymi, 850,000MT/YR of coated and uncoated woodfree capacity.
-Stora Enso will begin closing mills.
Negotiations with the stevedores continue. Finland has 25 major ports, 10 of which handle 75% of their exports.
Commercial Printers Down 7.2%
Consistent with our Coy Paper earlier releases, initial reports outline shipments for commercial printers declined 7.2% in January (versus January 2009) to $6.7Billion. Many believe this might be a trend, with the advent of EReaders and other electronic devices cannibalizing traditional print.
January Paper Shipments Up
The official American Forest and Paper Association (AF&PA) released final figures for January and confirmed Printing and Writing paper shipments were up 8.9% (vs. January 2009).
Highlights of January (versus JAN 2009 report include-
-Coated Papers up 14.6%
-Uncoated Mechanical up 28.3%
-Uncoated Freesheet up 1.9%
-USA Purchases (shipments and imports less exports) up 4%
Inventories of Printing and Writing rose 1%, up 9800 tons from December 2009.
Highlights of January (versus JAN 2009 report include-
-Coated Papers up 14.6%
-Uncoated Mechanical up 28.3%
-Uncoated Freesheet up 1.9%
-USA Purchases (shipments and imports less exports) up 4%
Inventories of Printing and Writing rose 1%, up 9800 tons from December 2009.
Tuesday, March 09, 2010
Fraser Paper to Emerge with New Name
When Fraser Paper completes its sale (sometime in April), the new specialty papers business will consist of the integrated pulp, energy, and paper operation in Edmundston, New Brunswick and Madawaska, Maine, as well as two lumber mills located in Plaster Rock and Juniper, New Brunswick. The company will be called Twin Rivers Paper Company. This new company name is reflective of the location of the pulp and paper operations at the Madawaska and Saint John Rivers.
Paper Industry Continues Growth into Alternative Energy
The worldwide producers of pulp and paper have substantially increased the use of renewal wood for biomass for their massive energy demands. The result is less (nonrenewable) fossil fuels consumed. A recent release from the Wood Resource Quarterly confirmed that since 2006, energy generated from biomass has gone up over 50%, last year accounting for 18% of the total energy consumption by this industry sector.
Apple IPAD Coming...could be Game Changer
Apple delayed the introduction of its new IPAD EReader to retail stores until April 3, although orders will be accepted on the web as early as March 12. The IPAD will come with the iBookstore application and 11 other free download applications. Many are watching this device with interest to determine if Apple will change the way we read, much like this company changed the way we listen to music and use our phones.
Friday, March 05, 2010
Coy Paper Expands into AF 21 Fire Proof Paper Chemicals
The Coy Paper Company has always focused on the specialty paper market and now has included chemicals to its product offerings. The company has technical support and blending facilities and will market and distribute the Hartindo Anti Fire chemicals to include AF 21, AF 11E and AF 31.
Many paper mills and coaters are evaluating Coy's product to include in their product lines. Imagine, a fire proof paper and a flame proof paper!!
The chemical offers permanent protection from fire once applied, Hartindo AF21 will protect your home and family, hotels, night clubs, schools, Hospitals libraries and museums, etc. from the ever present danger of fire, giving you peace of mind 24 hours a day. Contact Coy Paper at info@coypaper.com for more information.
Many paper mills and coaters are evaluating Coy's product to include in their product lines. Imagine, a fire proof paper and a flame proof paper!!
The chemical offers permanent protection from fire once applied, Hartindo AF21 will protect your home and family, hotels, night clubs, schools, Hospitals libraries and museums, etc. from the ever present danger of fire, giving you peace of mind 24 hours a day. Contact Coy Paper at info@coypaper.com for more information.
Prospective on Publication Paper Pricing
Even with a slightly improved demand at the end of 2009, coated publishing paper prices are almost $150 below their mid-2009 peak. Despite the combined rising costs of raw materials and the loss of black liquor credits, pressure continues on margins for the producers of coated groundwood publication papers. The forecast is for coated paper prices to continue to trend upward and producers to look for more improvement throughout the second half of 2010, assuming the economy does not enter another dip.
While it was true that during 2009, coated paper prices declined, but, in the first half, so did production costs. Unfortunately, the price slide continued despite the return of increased costs toward the end of the year. Pulp costs increased such as softwood pulp, up $200 per ton since their 2009 low, while coated publication prices fell $130 over the same time frame. Producers are also facing further pressure from the rising costs of energy, chemicals, transportation, and other cost components.
The challenge remains for mills due to rising fiber costs and the elimination of the black liquor credits (which will not be renewed). These credits reached as much as $100 per ton of paper. Combined with the other cost concerns noted above, producers will face tremendous margin pressure in 2010 if prices remain at their current levels. Accordingly, look for producers to introduce increased pricing thorough 2010.
While it was true that during 2009, coated paper prices declined, but, in the first half, so did production costs. Unfortunately, the price slide continued despite the return of increased costs toward the end of the year. Pulp costs increased such as softwood pulp, up $200 per ton since their 2009 low, while coated publication prices fell $130 over the same time frame. Producers are also facing further pressure from the rising costs of energy, chemicals, transportation, and other cost components.
The challenge remains for mills due to rising fiber costs and the elimination of the black liquor credits (which will not be renewed). These credits reached as much as $100 per ton of paper. Combined with the other cost concerns noted above, producers will face tremendous margin pressure in 2010 if prices remain at their current levels. Accordingly, look for producers to introduce increased pricing thorough 2010.
Pulp & Paper Companies Report Increased Profits in 4Q
The index known as the Pulp & Paper Week composite (includes 23 USA companies) reported forth quarter 2009 earnings up 60% (vs. 4Q08) with sales down 7.5%. For all of 2009, the group’s earnings were down 34.2% with sales down 11.4% when compared to 2008 results. It was noted that 15 of these companies benefited by the alternative fuel black liquor tax credits which offset losses, improved balance sheets, and substantially boosted earnings.
Worldcolor to Close, yet another, Printing Plant
Worldcolor will close its plant in Carroll, IA which will be the fourth closure in the last 12 months. Other shutdowns previously reported on Current News on the Pulp and Paper Industry were located in Oberlin OH, Bromont QB, and Richmond ON.
Thursday, March 04, 2010
Post Office Documents Plan
So many of our readers mail publications or print direct mail marketing pieces; accordingly, a summary of the newest USPS plan. Mail volume is forecast to drop 15% from 177Billion pieces to less than 150Billion by 2020. If no action is taken, this will result is a deficit of -$240Billion by 2020.
Proposed plan is to
-Restructure retiree health benefits
-Fewer delivery days; more locations, more self service kiosks, more user friendly website
-Establish more flexible workforce
-Review pricing on each program, to include a price increase in 2011
-Introduce more products
Proposed plan is to
-Restructure retiree health benefits
-Fewer delivery days; more locations, more self service kiosks, more user friendly website
-Establish more flexible workforce
-Review pricing on each program, to include a price increase in 2011
-Introduce more products
USA Manufacturing, including Paper, Expanded in February
Notes on report from Business Wire
The Institute for Supply Management (ISM) reported that US economic activity in manufacturing expanded in February for the 7th consecutive month, with the overall economy growing for the 10th consecutive month. New orders and production showed significant month-over-month growth, with the Employment index increasing for the 3rd consecutive month. The paper and printing sector indicators are summarized below.
The Institute for Supply Management (ISM) reported that US economic activity in manufacturing expanded in February for the 7th consecutive month, with the overall economy growing for the 10th consecutive month. New orders and production showed significant month-over-month growth, with the Employment index increasing for the 3rd consecutive month. The paper and printing sector indicators are summarized below.
Finnish Mills Look at Downtime because of Strike
The Finnish Transport Workers’ Union went on strike this week. If the strike effects the Finnish ports, mills such as UPM Kymmene will lack raw materials, paper storage, and a means to export paper. The mills will have no choice but to shut down. Note, almost half of UPM’s paper production capacity is in Finland, but they plan to deliver orders from mills in other countries.
Wednesday, March 03, 2010
Preliminary Ruling on Anti-Dumping of Coated Papers
USA Department of Commerce reported on their preliminary results in its countervailing duty investigation of coated paper from China and Indonesia. They announced a preliminary duty of 12.83% on products from China, and 17.48% on products from Indonesia. Asia Pulp & Paper (APP), a major exporter of coated paper from China and Indonesia to the USA, expressed disappointment with the initial findings.
Department of Commerce’s final ruling is expected to be released in September along with the final ruling on anti-dumping. The last phase of this investigation will occur in October or early November, when the USA International Trade Commission will determine if the domestic paper industry has been harmed.
USA Printers share in the foreign producers disappointment on this ruling. Their coated paper costs will surely increase in a challenging market.
Department of Commerce’s final ruling is expected to be released in September along with the final ruling on anti-dumping. The last phase of this investigation will occur in October or early November, when the USA International Trade Commission will determine if the domestic paper industry has been harmed.
USA Printers share in the foreign producers disappointment on this ruling. Their coated paper costs will surely increase in a challenging market.
International Paper Closes Another Paper Mill
International Paper, the world's largest producer of paper, will permanently shut down the two remaining paper machines at its Franklin Virginia plant.
Tuesday, March 02, 2010
Are E-Books Really Taking Over?
To date, electronic books only make up less than 2% of all books sold. Trade books, both hard and paperback, are 35% and mass market printed books are 21%. As far as distribution is concerned, Book chains sell nearly 30% of all the books sold, followed by e-commerce sites at 20%, and the independent shops account for 5%. I would image the digital distribution will be a new channel and experience robust growth once the EReaders start hitting the market in a bigger way.
The Power of the Printed Word
Condé Nast, Hearst, Meredith, Time Inc. and Wenner Media with the support of Magazine Publishers of America and Bonnier Corp.; National Geographic; ESPN; and New York Media, have reported they will place front-of-book advertisement placements to answer tough questions about their relevancy. In all, close to 100 titles are planning to give up prominent space in their issues for an industry ad campaign that aims to promote magazines as vital.
The community is ferociously determined to correct the misconceptions that have been swirling around the advertising industry. The primary objective is to confirm that printed magazines are still exciting, Mobile, and will still be a strong presence for all to read 'the printed word'. The publications will also educate the public on how, long term, electronic media will devalue its product by offering its content for free online.
The community is ferociously determined to correct the misconceptions that have been swirling around the advertising industry. The primary objective is to confirm that printed magazines are still exciting, Mobile, and will still be a strong presence for all to read 'the printed word'. The publications will also educate the public on how, long term, electronic media will devalue its product by offering its content for free online.
European Paper Output Confirmed Down in 2009
Just reading another report confirming producers of Paper and Board in Europe were down nearly 11% to 90Million tons, from 2008. This is the lowest level of shipments since 2001. Similar to the USA, the European manufacturers experienced weak demand and several capacity closures.
Update on Market Pulp
Domtar and SAPPI recently announced yet another increase for their market hardwood pulp of $50/ton for shipments. It was also reported that most of the producers of BEK will increase pricing $30/ton. This move follows all the North American producers of softwood pulp with the earlier announcement for an increase of $30/ton. Once all prices are into the market, the NBSK price for North America will be $910/MT and Europe will be $890/MT.
Most pulp buyers will not have a choice, but to pay the increase. Pulp supply has been tight due to continued strong demand in China. Also, the earthquake in Chile will impact several producers.
Pulp prices have staged a remarkable rally in the last 10-11 months, with most grades rising more than $200/MT.
Most pulp buyers will not have a choice, but to pay the increase. Pulp supply has been tight due to continued strong demand in China. Also, the earthquake in Chile will impact several producers.
Pulp prices have staged a remarkable rally in the last 10-11 months, with most grades rising more than $200/MT.
Monday, March 01, 2010
2010 and the Paper Industry
The last decade yielded only limited new domestic capacity for the paper industry and an unprecedented number of plant and equipment shut downs. The industry is entering 2010 with a slight breeze to our backs with many markets witnessing small increases in order books from end users that most likely had to restock. Unfortunately, the economy is still not improving to a point that housing starts, bank credit, nor consumer buying has returned with any sustainability. Many of the raw materials consumed in paper making have increased and the black liquor alternative fuel credit is gone. NBSK pulp may raise to almost $880/MT – a 16 month high - and come close to matching the August 2008 peak.
Newsprint continues its challenge into 2010, with both advertisers and readers down, although pricing has improved for the producers. The price has steadily risen from a recent low of $450 to nearly $530/MT. The forecast is for still more shuttering of equipment to balance, the declining demand, with supply.
Uncoated Freesheet producers have announced an increase of $40/ton on business papers and demand appears to be stabilized (although current base is low). The major producers reduced capacity in 2009 and this will balance the market.
The manufactures of Coated Freesheet and Groundwood are still experiencing challenges from the a reduction in both advertising pages and over all circulation. The manufactures have announced price increases, but printers continue to push back citing fear of alienating their customers with advanced pricing.
Virtually all products for Containerboard have increased prices, and converters are paying the new levels. Current order backlogs are OK at best, with export shipments doing well. Real challenge is if the economy does not improve, no one will consume goods that go into boxes.
Our forecast is for a gradual recovery for the paper industry, and trending up from a poor 2009.
Newsprint continues its challenge into 2010, with both advertisers and readers down, although pricing has improved for the producers. The price has steadily risen from a recent low of $450 to nearly $530/MT. The forecast is for still more shuttering of equipment to balance, the declining demand, with supply.
Uncoated Freesheet producers have announced an increase of $40/ton on business papers and demand appears to be stabilized (although current base is low). The major producers reduced capacity in 2009 and this will balance the market.
The manufactures of Coated Freesheet and Groundwood are still experiencing challenges from the a reduction in both advertising pages and over all circulation. The manufactures have announced price increases, but printers continue to push back citing fear of alienating their customers with advanced pricing.
Virtually all products for Containerboard have increased prices, and converters are paying the new levels. Current order backlogs are OK at best, with export shipments doing well. Real challenge is if the economy does not improve, no one will consume goods that go into boxes.
Our forecast is for a gradual recovery for the paper industry, and trending up from a poor 2009.
Containerboard Price Hike Still On
As of today, all the major producers of ContainerBoard including International Paper, Georgia Pacific, and Temple Inland have increased pricing. These three leading producers are digging their heels in on the $60/ton announcement for April 1. More than likely, this second increase of the year will happen, despite persistently weak demand. Key issues include tight supply/demand balance, lean inventories, and surging fiber costs.
WorldColor Closes Another Plant
The printing plant in Oberlin, Ohio owned by WorldColor will shut its doors by May 21. This facility focused on direct mail and magazine inserts.
Thursday, February 25, 2010
White Birch Announces Bankruptcy
As we assumed, White Birch joined AbitibiBowater in announcing they will file for bankruptcy protection. White Birch is the second-largest newsprint manufacturer in North America with newsprint mills in Quebec City, Riviere-du-Loup and Gatineau. The company expects operations to continue producing paper for end users.
Printing and Writing Papers Shipments Up in January
From recent report by American Forest and Paper Association
The AF&PA reported that USA printing and writing paper shipments went up 9% in January vs. 2009. This is the third consecutive monthly increase when compared to the year before. All paper classifications grew, with coated fee and groundwood - publication having double-digit growth. US purchases (shipments + imports - exports) also went up by +4%, and inventory levels increased 1%, by 9,800 tons from December.
The AF&PA reported that USA printing and writing paper shipments went up 9% in January vs. 2009. This is the third consecutive monthly increase when compared to the year before. All paper classifications grew, with coated fee and groundwood - publication having double-digit growth. US purchases (shipments + imports - exports) also went up by +4%, and inventory levels increased 1%, by 9,800 tons from December.
RR Donnelley to buy Bowne
RR Donnelley will acquire Bowne & Co.for $481Million and is expected to close in the second half of 2010. Bowne had revenues of $675Million in 2009 and offers digital print services for healthcare, financial services and others.
Wednesday, February 24, 2010
Another Prospective on the Paper Industry
Most CEOs running pulp and paper companies believe the ‘worst is over’ and now look for a slow recovery over the next 2+ years. Most admit the industry cycle is mature or even declining and much of the lost demand may not return. The paper, pulp, and packaging industries all need to review their models for long term survival. The last two decades illustrated a trend of mergers, acquisitions, consolidation, and plant and equipment closures. This assisted with the over supply challenge, but if demand continues to be decreasing, a transformation must occur.
The paper companies will need to review other segments and models to be viable as a long term entity. Areas of focus perhaps should include, Chemicals, water treatment, energy, logistics, forest management, and recycling. The paper companies all currently have expertise in these areas as a normal course of business. Now, maybe they should evaluate if these areas could generate new streams of revenue and recreate a ‘new’ entity.
The paper companies will need to review other segments and models to be viable as a long term entity. Areas of focus perhaps should include, Chemicals, water treatment, energy, logistics, forest management, and recycling. The paper companies all currently have expertise in these areas as a normal course of business. Now, maybe they should evaluate if these areas could generate new streams of revenue and recreate a ‘new’ entity.
Printers Upset at Anti Dumping Case
The USA printing industry continues to lobby against the coated paper manufactures that have asked the US International Trade Commission to levy a tariff on Chinese and Indonesian producers. Overall demand for printing is down and the continued competition from electronic communication is fierce. Reports confirm over 73,000 workers in the printing industry lost their jobs in the past 2 years. The printers feel that the imported paper maintains a competitive market, and without China and Indonesian paper, the cost of the largest component for printing costs, would increase. Increased raw material costs will further drive clients away from the printed media and potentially close down printers.
The printing community is fighting to keep the imported coated paper coming into the USA without a penalty tariff.
The printing community is fighting to keep the imported coated paper coming into the USA without a penalty tariff.
PaperlinX Profits Down
We often report on the financial conditions for the paper and pulp producers as well as printers, but the entire supply chain has been negatively effected. Poor demand from the printing community negatively effected the latest set of financials from global paper distributor giant PaperlinX. The merchant's sales for the six months to December 2009 fell across the board, with Australian, New Zealand, European and North American operations showing double digit declines; meanwhile, Asia did illustrate some positive results.
We reported earlier in the year, that PaperlinX was successful in the sale of their Tasmanian paper manufacturing operations to Nippon Paper; however, the company is still looking to sell its Burnie paper manufacturing plant, and, if no buyer is found it will close in June 2010.
For the first half of the 2009-10 financial year PaperlinX reported a loss of $175Million, the bulk of this coming from costs associated with its exit from paper manufacturing. The company recorded a 28% drop in group revenues to $2.7Billion, as well as a 24% drop in paper volumes, which the company attributed to its exit from paper manufacturing operations in Australia and the impact of weak markets.
We reported earlier in the year, that PaperlinX was successful in the sale of their Tasmanian paper manufacturing operations to Nippon Paper; however, the company is still looking to sell its Burnie paper manufacturing plant, and, if no buyer is found it will close in June 2010.
For the first half of the 2009-10 financial year PaperlinX reported a loss of $175Million, the bulk of this coming from costs associated with its exit from paper manufacturing. The company recorded a 28% drop in group revenues to $2.7Billion, as well as a 24% drop in paper volumes, which the company attributed to its exit from paper manufacturing operations in Australia and the impact of weak markets.
Tuesday, February 23, 2010
Container Board Pricing and Market Update
International Paper just announced a $60/ton price increase on containerboard for shipments starting in April. We assume fellow producers will follow such as Temple-Inland, Packaging Corp, Rock-Tenn, Greif, and Sonoco. Also, Boise and Kapstone.
Although inventories for containerboard are down from historical highs for the month of January, they DID increase from January 2008. Prices have increased, but demand for boxes appears stagnate, at best. In fact, Deutsche Bank reported shipments were down over 4% and inventory rose 67,000 tons. The past price increase went through, will the April pop also be successful?
Although inventories for containerboard are down from historical highs for the month of January, they DID increase from January 2008. Prices have increased, but demand for boxes appears stagnate, at best. In fact, Deutsche Bank reported shipments were down over 4% and inventory rose 67,000 tons. The past price increase went through, will the April pop also be successful?
Reader’s Digest Out from Chapter 11
The Reader’s Digest Association has officially emerged from Chapter 11 protection. As part of its restructuring, the publisher reduced its debt by 75% (from $2.2 billion to $525 million). Holders of senior secured debt transferred ownership of Reader's Digest to the lender group and will effectively receive equity.
Monday, February 22, 2010
Paper Producers Continue to Look for Price Increases
Most of the major paper sectors have announced price increases, and end users are paying the new price. It appears many of the raw materials including chemicals, pulp, energy, and transportation have all increased, and the infamous black liquor credit is gone. As we outlined in past releases, the forecast will be a slow one for paper producers to recover. Demand continues to be soft and the industry continues to have too much capacity.
Several Magazines Rethinking Audit Bureau of Circulations
The current challenging magazine industry on publication's revenues has resulted in many reviewing their membership to the Audit Bureau of Circulation (ABC). For decades, ABC was considered the bible of auditing over 750 consumer magazines for circulation. However, over the past few years, about 100 of the smaller (or shuttered) have dropped ABC. The most common reason relates to the $10,000 fee ABC charges each year for the audit.
Advertising pages have dropped some 23% from 2008 to 2009, and significant revenue along with it. Many of the smaller publishers are cutting cuts to merely survive.
Advertising pages have dropped some 23% from 2008 to 2009, and significant revenue along with it. Many of the smaller publishers are cutting cuts to merely survive.
Anti Dumping Case Hearing March 1
Appleton, SAPPI, and NewPage continue their efforts with the USA International Trade Commission to review coated paper imports from China and Indonesia. The USA paper producers would like the government to impose a 100% tariff because they feel the Asian governments are unfairly subsidizing the coated paper producers. Most believe the final ruling will not be awarded until the Fall of 2010; however, the USA Dept. of Commerce is to make a ruling by March 1.
Many of the domestic printers are fighting this hearing for fear that if the results support the USA producers, coated paper will cost more. During the past 18 months, although the paper markets have been poor, there were no significant increases in imports. Printers also cite domestic coated manufactures have not witnessed their market share to decrease.
Printers already are experiencing a challenge just with poor demand, the fear of coated paper increases will only produce a more depressed industry.
Comments?
Many of the domestic printers are fighting this hearing for fear that if the results support the USA producers, coated paper will cost more. During the past 18 months, although the paper markets have been poor, there were no significant increases in imports. Printers also cite domestic coated manufactures have not witnessed their market share to decrease.
Printers already are experiencing a challenge just with poor demand, the fear of coated paper increases will only produce a more depressed industry.
Comments?
Wednesday, February 17, 2010
UPM Kymmene Reduces Workforce
The world’s largest paper producer of magazine papers, Kymmene, just announced it will temporarily reduce its work force at both the Kaukas and the Kymi mills in Finland. Management cited poor demand for the companies paper products and an objective to improve costs. UPM Kymmene has 64 plants in 15 countries.
Newpage Paper will Restart Paper Machine
The NewPage mill in Rumford Maine recently started up a paper machine that was shut down in September. This machine manufactures coated paper for magazines. The mill is now operating all equipment at the Rumford location
Some Mills Announce Coated Paper Price Increase
Lately, pulp and transportation cost increases have forced many mills to evaluate paper prices. Sappi will increase prices on coated woodfree paper sheets and rolls by 10% starting with March shipments. Also citing increased costs and unsustainable margins, Lecta, the second largest European coated woodfree paper producer, announced a 9-12% price increase on coated woodfree paper, effective with deliveries as of March 15th.
Penton Media Files for Bankruptcy
The publisher, Penton Media, will reorganization under Chapter 11. Penton Press is the parent company of such trade magazines as American Printer and Paper, Film & Foil Converter magazines. The publisher had more than $1 billion in liabilities and the assets reported were between $500 million and $1 billion, according to court documents.
Wednesday, February 10, 2010
Fraser Paper Reduces pay to Workers
The workers at the Fraser Paper Madawaska paper mill in Maine agreed to have their paychecks cut by 8.5% as part of a new contract mill management says is needed to keep the facility from closing. This initiative will save the company $4Million in annual savings.
Meredith Magazine is on Top
Reader’s Digest had historically controlled the top spot for the biggest selling consumer magazine. The Audit Bureau of Circulation’s latest figures reveal that
this is no longer the case.
Meredith's Better Homes and Gardens now holds that distinction, with a total circulation of 7.6Million, according to the ABC covering the June-December 2009 period. It should be noted, Reader’s Digest, now No. 2 at 7.1 million, deliberately cut its circulation in recent years to improve its profitability.
this is no longer the case.
Meredith's Better Homes and Gardens now holds that distinction, with a total circulation of 7.6Million, according to the ABC covering the June-December 2009 period. It should be noted, Reader’s Digest, now No. 2 at 7.1 million, deliberately cut its circulation in recent years to improve its profitability.
15 Companies to Obtain FSC Certification on Forests
15 companies recently obtained Forest Stewardship Council certification for their management practices covering a total area of over 1.5Million hectares. Applicants, including AbitibiBowater, Domtar, and Kruger among others. The Rainforest Alliance’s Smartwood Program conducted the assessment. Sustainability and environmentally friendly initiatives continue to be important programs for the Pulp and Paper industry.
Tuesday, February 09, 2010
Can Direct Mail compete with Digital Marketing?
The major marketers are learning that traditional (mailed) direct mail becomes a more successful campaign when combined with digital marketing. The final figures for 2009 are not yet in, but, in 3Q 2009, US consumers received 5.2 billion pieces of direct mail, a drop of 27% from 2008. Marketers are finding that with reduced spending budgets they are sending fewer pieces, but more targeted. The companies are complimenting these efforts with emails and witnessing increased responses.
A few Words from Barclay's Paper Analyst
From a Pulp and Paper Week Report
Barclay's Capital analyst, Peter Ruschmeier, estimated US uncoated mechanical paper (groundwood containing paper used in inserts, paperback books, and certain magazines) is to increase 22.6% in 2010; coated freesheet to rise 14.4%; coated mechanical (publication papers) to be up 13.2%; market pulp up 2.0%; and uncoated freesheet up 1.1%; with newsprint down 7.2%. Many industry observers feel that demand will increase in 2010 and rising costs will squeeze margins. Most pulp, paper, and board producers will focus on raising selling prices to offset margin pressure.
Coy Paper might take some exception with the aggressive growth figures on both uncoated and coated groundwood papers as well as coated free sheet. Unless advertising dramatically improves, I would be hard pressed to forecast a growth of even half these figures. We DO agree that mills will attempt to increase pricing (for all grades) throughout the year in an effort to stay ahead of the cost curve.
Barclay's Capital analyst, Peter Ruschmeier, estimated US uncoated mechanical paper (groundwood containing paper used in inserts, paperback books, and certain magazines) is to increase 22.6% in 2010; coated freesheet to rise 14.4%; coated mechanical (publication papers) to be up 13.2%; market pulp up 2.0%; and uncoated freesheet up 1.1%; with newsprint down 7.2%. Many industry observers feel that demand will increase in 2010 and rising costs will squeeze margins. Most pulp, paper, and board producers will focus on raising selling prices to offset margin pressure.
Coy Paper might take some exception with the aggressive growth figures on both uncoated and coated groundwood papers as well as coated free sheet. Unless advertising dramatically improves, I would be hard pressed to forecast a growth of even half these figures. We DO agree that mills will attempt to increase pricing (for all grades) throughout the year in an effort to stay ahead of the cost curve.
Monday, February 08, 2010
Finally, Some Good News for Magazines
After a punishing first half of 2009 for magazine sales at the newsstand, many of the industry’s biggest newsstand sellers witnessed sales declines begin to at least level out in the second half of the year.
Single copy sales declined 12.4% in the first six months of the year. It should be noted that results were partly affected by a disruption in the wholesaler delivery chain which led to delays in getting issues to stores. The challenging economy is also at blamed for a decline in single-copy sales.
In the second half, though, single-copy sales declines narrowed for big newsstand sellers like People, In Style, Glamour, Family Circle and Cosmopolitan.
Not all shared in the improvement. Good Housekeeping’s newsstand sales fell nearly 30% on top of a 17.7% decline in the first half. Vogue was down 15% and Men’s Health, 14%.
Single copy sales declined 12.4% in the first six months of the year. It should be noted that results were partly affected by a disruption in the wholesaler delivery chain which led to delays in getting issues to stores. The challenging economy is also at blamed for a decline in single-copy sales.
In the second half, though, single-copy sales declines narrowed for big newsstand sellers like People, In Style, Glamour, Family Circle and Cosmopolitan.
Not all shared in the improvement. Good Housekeeping’s newsstand sales fell nearly 30% on top of a 17.7% decline in the first half. Vogue was down 15% and Men’s Health, 14%.
Printers Beware of Continued Pressure for 2010
Dr. Joe Webb, director of Economics and Research Center, said “2009 was a tough year for printers, and the trend of displacing print with new media by retailers and others continues. The longer the slow economic times last, the more entrenched these new media budget allocations will be.” Dr. Webb emphasized that print businesses will continue to be under pressure to merge and consolidate because of these shifts. “The most successful print businesses had specialized equipment and processes that were targeted to the exact needs of those markets, such as magazines, catalogs, and newspaper inserts. The higher profits those organizations enjoyed for many years were the rewards they had for concentrating on those niches. It wasn't until those niches started to contract that the printers realized that specialization had risks, which were often underestimated, that quickly eliminated those rewards.”
Total Shipments for printers for 2009 for Year are $88 Billion
Total Shipments for printers for 2009 for Year are $88 Billion
Friday, February 05, 2010
Top Printers for the USA Government
The USA Government Printing Office (GPO) awarded bids to more than 1800 printers in 2009 for $425Million (down from $421Million in 2008). Top five include
NPC (News Printing) $29.3Million
RRDonnelly $27.0Million
Monarch $19.5Million
Gateway Press $17.5Million
SourceLink $16Million
NPC (News Printing) $29.3Million
RRDonnelly $27.0Million
Monarch $19.5Million
Gateway Press $17.5Million
SourceLink $16Million
Time Magazine Down
Time Warner reported that its publishing unit, Time Inc., generated $3.7 million in revenue in 2009, down 19% from 2008. Those losses were fueled largely by a 22% or $541 million decline in advertising revenue. Meanwhile, subscription revenues declined 13% for the year and other revenues fell 24%.
Thursday, February 04, 2010
Standard and Poors Outlines Slow Recovery for Paper Industry
S&P recently generated a report that outlined a slow recovery for companies involved with USA forest products.
The document reviews a slight improvement in outlooks for 60% of forest sector companies. This report is titled “The US Forest Products Sector is Entering a Slow Recovery” and says that the positive trend reflects significant debt reduction that these companies achieved, despite poor economic conditions. They believe that the economy and housing markets have hit bottom and that the sector’s credit profile will improve over the next few quarters.
I, on the other hand, am not as bullish, especially if one is focused on the pulp and paper segment of the forest products industry. There will be some improvement, assuming the economy picks up, but debt reduction will be a challenge.
I, on the other hand, am not as bullish, especially if one is focused on the pulp and paper segment of the forest products industry. There will be some improvement, assuming the economy picks up, but debt reduction will be a challenge.
International Paper Posts Loss - Domtar Reports Profit
The International Paper Company, the world's largest pulp and paper producer, reported a loss for the forth quarter of $101million due to a decline in sales. The Industrial Packaging unit dragged down the balance of the corporation, posting a loss of $391Million.
Meanwhile, Domtar experienced strong pulp sales and benefited from recent pulp price increases. The company announced a profit of $124Million for the forth quarter (compare to a loss of $676Million 4Q2008).
Meanwhile, Domtar experienced strong pulp sales and benefited from recent pulp price increases. The company announced a profit of $124Million for the forth quarter (compare to a loss of $676Million 4Q2008).
Wednesday, February 03, 2010
AF&PA Reports on December Paper Shipments
As announced by AF&PA Report
In December, paper output in the USA was 2.9Million tons, up 3.3%, yet for the year, paper output was down 13%. Coated paper improved 12.8% for the month, but was down 18.7% for the year. Uncoated mechanical grades increased 1.4% in December, but dropped 20.5% for the year. Uncoated freesheet was up 1.9% for the month and down 11.1% for the year. This is the second consecutive month of increased output vs. 2008.
In December, paper output in the USA was 2.9Million tons, up 3.3%, yet for the year, paper output was down 13%. Coated paper improved 12.8% for the month, but was down 18.7% for the year. Uncoated mechanical grades increased 1.4% in December, but dropped 20.5% for the year. Uncoated freesheet was up 1.9% for the month and down 11.1% for the year. This is the second consecutive month of increased output vs. 2008.
R.H. Donnelley is Now Dex One
R.H. Donnelley changed their name to Dex One and also announced it will emerge from Chapter 11. The 124-year-old local business directory publisher and marketing company also provides business search engines and pay-per-click networks. The new name will tie into their search website dexknows.com. The company is attempting to rebrand itself as a search engine company.
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