Prices up, Profits Still Down

Prices on literally all pulp and paper items continue to experience price increases and, sadly, profits continue to lag. Many mills and paper machines have closed down - allowing for tight supply and reduced inventories, this has yielded better productivity and allowed for price increases. However, the cost increases of chemicals, fiber, energy, labor, and transportation have exceeded paper prices for finished product.

Printers Voice Concerns for 2006

A recent report confirmed that the #1 concern USA printers face for 2006 was raising paper costs. The cost of paper now seats at 22% as a percent of total sales and once all material are factored in, this equates to 35% of sales. Paper has increased over 5% so far this year, while prepress consumables, plates and ink have all gone up 4%. Other concerns cited include competition & pricing; labor & staffing; energy costs; and health insurance.
Paper.com has over 15,000 paper items for commercial printers, available for immediate shipment.

SC market remains Firm

Supercalendar Paper (SC) – the type used in Newspaper advertising supplements and several low-end magazines and catalogues, remains snug. The industry was successful in introducing a price increase – increasing the bell weather grade from $700 to $780 per ton. Although demand is off, supply has been curtained – Port Hawkesbury, Nova Scotia – StoraEnso had labor shutdown – resulting in over 380,000 tons and cost pressure coupled with low advertising demand have forced publishers to substitute coated paper for the more economical SC grade.
Total 2006YTD North America demand is 2,200,000 tons.

International Paper Sells another Division

International Paper has signed a definitive agreement to sell its Brazilian coated papers business to Stora Enso for approximately $415 million, subject to certain post-closing adjustments. The business includes a coated paper mill and lumber mill in Arapoti, Parana State, Brazil

More Paper price Increases

Weyerhaeuser and Boise have recently confirmed a price increase for September shipments. Most uncoated paper producers will follow. This increase will affect printing and office papers as well as opaque grades. While demand has been relatively steady, 1.7million tons of North American capacity has been shut down and therefore, supply has become tight. Imports are rising, but are less than 3% of our demands.

Weyerhaeuser Paper to Merge with Domtar Paper

Weyerhaeuser Paper agreed to merge with Domtar in a $3.3billion transaction. Weyerhaeuser shareholders will enjoy a 55% stake in the new company and Weyerhaeuser will also receive $1.35billion cash payment as part of the deal. Weyerhaeuser will transfer all 10 pulp and paper mills. Domtar’s Raymond Royer will act as CEO.
Paper.com has both Weyerhaeuser and Domtar grades readily available. Please visit www.paper.com

SMART Papers finally Obtains Financing

SMART Papers, located in Hamilton, Ohio, was successful in confirming a new round of financing. The mill has been under bankruptcy protection, citing poor cash flow due to
high energy, fiber, and chemical costs. Plainfield Asset Management will take control
of SMART Papers and assume the $40million of debt. The VC will provide an additional $10million for interim financing.
Paper.com has all the SMART Paper grades, including Kromekote, in stock and ready for immediate shipment.

Brighter, Whiter Trend for White Papers

All the leading companies are now marketing their white papers as ‘brighter and whiter’. If fact nearly all office papers are now boosting a brightness level of 92 -- up from 84.
The addition of fluorescent whitener greatly assisted (much like what laundry detergents do to make cloths ‘look’ whiter). Brightness has been measured on a scale of 1-100 – the higher the number the brighter the sheet. However, there are two units of measurement – in USA – The TAPPI system is used while in Europe the ISO system is reported AND these two systems are NOT interchangeable because of different instruments used.
Whiteness (as apposed to Brightness) is now the specification of choice. Both USA and Europe use the CIE whiteness scale. The results are often expressed with 3 results – L; a; and b - and reflect the color or whiteness scale from red to blue to green (which matches what the human perceives).
Although consumers will nearly always pick the brighter, whiter sheet – it comes with a cost – both economically and ecologically. Clearly, it costs more to produce a whiter, brighter sheet and many of these added chemicals degrade both strength of the sheet and cost more.
Paper.com has a complete line of bright-white sheets and ecologically friendly grades. www.paper.com has nearly 20,000 items of paper.

RR Donnelly May be in Buy Out Discussions

RR Donnelly, North America’s largest printer, has been offered buy out proposals from two different suitors. This, according to Bloomberg News.

Will the Paperless Office ever Happen?

Office copy paper has been declining in demand since its high of 1999. While the paper used in a ‘white collar’ office has steadily declined – consumption for the home use / home office steadily increases. Office Paper growth increased approximately 6-7% per year in the 1970s, 1980s and 1990s. Then, suddenly, it stopped growing and remains at 5.5million tons per year. The household consumption of office papers is slightly less than 20% of the total demand. Reports indicate that household consumption remained steady – at 5 pound per household from 1975 through 1995. Since 1995 the average household demand is nearly 18 pounds per year or about 3 reams (500 sheets of 8 1/2x11”). Therefore, with 115million households in USA – we estimate SOHO at 1million tons. By way of comparison, average office worker consumes about 125 pounds/year or 4.5million tons. We forecast that office papers will begin to decline because of computer technology, higher cost, less employment, younger people simply using less paper, and changes in cultural habits.
More offices and households are purchasing office supplies, including paper, from the Internet. Paper.com has nearly 20,000 paper items on site – many for the office environment.

Mohawk Paper reintroduces Strathmore Line

Mohawk Fine Papers, now the largest producer of premium printing and imaging papers in the USA, over hauled the Strathmore paper line. The line enjoys a broad range of attributes - Smooth to wove finish -available with fibers, strips, white or colors - Watermarked or not - cotton fiber or recycled - offset or digital -- Mohawk's Strathmore has it all. The mill has also redesigned the ream wrapper. Paper.com has the complete line of Mohawk Papers - in stock and ready for immediate delivery.

Mohawk Paper reintroduces Strathmore Line

Mohawk Fine Papers, now the largest producer of premium printing and imaging papers in the USA, over hauled the Strathmore paper line. The line enjoys a broad range of attributes - Smooth to wove finish -available with fibers, strips, white or colors - Watermarked or not - cotton fiber or recycled - offset or digital -- Mohawk's Strathmore has it all. The mill has also redesigned the ream wrapper. Paper.com has the complete line of Mohawk Papers - in stock and ready for immediate delivery.

International Paper Completes HQ move

International Paper recently completed its relocation of the corporate Headquarters from Stamford, CT to Memphis, TN. The company will employ approximately 3000 in Memphis.

2006 Top Tag and Label Converters

Top Tag and label Converters were announced as
1- RRDonneeny
2-Avery Dennison (Fasson)
3-CCL Industries
4-WS Packaging Group
5-Multi-Color Corp
6-Fort Dearborn Co
7-Standard Register
8-Alcan Packaging Label Group
9-Nashua Corp
10-Spear Mason
11-MPI Label Systems
12-Hammer Packaging
13-Weber Marking Systems
Paper.com has Tags and Labels and nearly 20,000 other paper items on site.

Loparex acquires Douglas-Hanson

Two large coaters will combine forces, according to a news release.
Loparex Group, a manufacturer of release coated papers and films, has acquired the Douglas-Hanson Company of Hammond, WI, USA. Douglas-Hanson, established in 1973, manufactures silicone-coated release papers and films, and extrudes polycoated papers for the packaging industry. The Douglas-Hanson facility will operate under the name Loparex Inc., whose headquarters is in Willowbrook, IL.

Nashua Buys Tec Print

Nashua Corporation, a manufacturer of labels and thermal and specialty papers based in Nashua, NH, USA, has announced its acquisition of 35 percent of the shares of Tec Print LLC, a minority-owned business enterprise located in Memphis, TN.

Tec Print is a minority owned printer of lottery tickets and labels. The company also has the capability of printing paper rolls, tickets, brochures, business cards, posters, and signs.

Paper.com has tags, tickets, and labels, in stock and ready for immediate delivery.

Pulp Price Still Increasing....again

Producers of market pulp appear to remain aggressive with price increases. All producers implemented a $30/mton price increase for NBSK for July yielding a 'list' price of $750/mton. The cost pressure on nonintegrated paper mills (mills that do not produce their own pulp) continues to mount. Stand by for yet another increase in the Fall.

Coated Free Prices firming up

Prices increased $50.00/ton on #3 - 60lbs rolls of coated paper in July. This grade is used for high-end magazines and catalogues for luxury items. Demand has been steady thus far in 2006, and supply has decreased due to equipment closures.
International Paper completed the sale of their coated division to Apollo Management Group.
Paper.com has coated paper in both rolls and sheets, available and ready for shipment.

Uncoated Offset Prices - Increase .... again

Cut size - Paper used for copiers and desk top printers; witnessed yet another price increase in June and one is in the 'air' for September - of $60.00/ton. Supply reductions and somewhat better demand yielded an increase in shipments of 2.5%. To further a tightening in market - Brazil is not exporting as much to USA - neither is Europe.
Weyerhaeuser just announced price increase for Offset and Opaque grades - effective with August shipment - $60.00/ton.
BTW. Strong rumor that either Boise or Domtar will merge with Weyerhaeuser.
Paper.com has all of Weyerhaeuser's paper grades in both rolls and sheets, available and ready for shipment.

Uncoated Woodfree Market

The North American Wood Free Market, paper used for copy paper, books, and desk top printers, witnessed a decline in demand of 12.8% from a peak of 14.8million tons in 1999. Demand last year was 12.9million tons. The main reason sited was electronic communication and the sudden spike in price for this grade of paper. Many producers shuttered equipment - most notable Weyerhaeuser in 2 mills 280,000 tpy Prince Albert, Sask and 155,000 tpy in Dryden, ON; Also, Domtar, Glatfelter, and SMART all closed down production.
Top 5 North American Producers
International Paper 3,570M tpy 24.6% mkt shr
Weyerhaeuser 2,650M tpy 18.3% mkt shr
Domtar 2,210M tpy 14.6% mkt shr
Boise Cascade 1,550M tpy 10.7% mkt shr
Glatfelter 755M tpy 5.2% mkt shr