Glatfelter Places Equipment in Auction

The Glatfelter Paper Company mill in Neenah, Wisconsin will auction all the equipment from the 120,000 ton/year mill it shut down earlier this year. This mill produced Text and Cover paper grades.
Paper.com marketrs all the Glatfelter grades, including it's recent introduction of Mead's Carbonless grades.

Marcal Paper Mill Declares Bankruptcy

The Marcal Paper Company, a tissue producer, declared bankruptcy protection citing 40% jump in energy costs.

Legion Paper Acquires Moab

Legion Paper recently announced that it has acquired Moab Paper Company. The acquisition will form the Moab by Legion Paper division to distribute archival digital papers, storage and display products.
Paper.com markets all the Legion Art and Exotic papers as well as a complete line of digital papers.

RR Donnelley to Acquire Banta for $1.3 Billion

R.R. Donnelley & Sons Co. has agreed to buy Banta Corp. for about $1.3 billion in cash. The deal, valued at $36.50 a share after a special dividend of $16 a share already declared by Banta, came on the same day Cenveo Inc. pulled its $50 a share offer. R.R. Donnelley’s bid was unanimously approved by the boards of both companies, and is expected to close in the first quarter of 2007. Donnelley reported sales of $8.43 billion in 2005, and Banta has annual revenue of approximately $1.5 billion.

Update on Market Pulp

Market pricing for pulp has remained strong. NBSK (bell weather grade for Pulp) export hikes to Europe appear to have gone through; prices leveled out at $720/mton-$730/mton. Hardwood and Softwood inventories dropped to their
lowest levels since June last month spurring some hardwood producers to announce hikes. New supply may In Chile, Arauco's Nueva Aldea started up last month and CMPC is expected to ramp up its Santa Fee equipment in November. Terrace Bay Pulp started up its 350k/mtpy NBSK line in Ontario and may restart a smaller (125k tpy) line. With
current pulp prices, we suspect that other Canadian mills may be looking at restarts.

Coated Magazine Paper

Coated paper used for magazines and publications remains among the most competitive paper grades.
September prices were adjusted down $10/ton and October prices fell another $10/ton to $825/ton. Demand is down 2.5% YTD and the restart of UPM's Mirimichi mill has boosted supply. Experts are hopeful that capacity closures in Europe - including a just-announced 230K Myllykoski shutdowwn - will begin to help the market. The biggest move to date is the decision by UPM to close 17% of its W. European LWC capacity.

Digital Printing Continues to Increase

First nine months of 2006 illustrated a continued increase of toner based/digital printing growth versus the traditional ink on paper. This trend is forecasted to continue. Toner based/ Digital printing grew 4.5% 1Q06 and 6.1% 2Q06. Of the $170billion USA Printing industry, 70% still constitutes ink on paper and 20% is Toner based / Digital ($34biliion). PIA/GATF estimates 11,680 digital plants are currently in USA - compare to 25,300 sheetfed and 4,200 webfed printing plants.
Printing Impressions, Inc estimates 2006 printing-
Total Shipments $171Billion
Shipment Growth 3%
Ink on Paper growth 2%
Digital Print growth 4%

Top Book Printers

Top North American Book Printers are as follows-
1 -Visant Corp
2- Quebecor
3- Banta
4- Bertelsmann Arvato
5- Courier
6- Transcontinental
7 - Walsworth Publishing
8- Phoenix Color
9- Maple-Vail Book
10- Wbcrafters
11- Edwards Brothers
12- Hess Management
13- Friesens Corp
14- Webcom Ltd
15- Sheridan Group

A Seller’s Market - for printers too

Over the past several years many paper mills have been sold or shut down, also over the last three years the North American label printing industry has witnessed an unprecedented rise in acquisition activity. The ownership of companies across revenue ranges is increasingly changing hands – some acquired by strategic investors (printing and packaging conglomerates) and some by financial investors (private equity firms and financial services companies). The evolutionary foundation upon which our industry was built is shifting as the entrepreneurs who founded companies in the 1960s, ’70s and ’80s are approaching retirement age in a market where private equity capital has never been so plentiful, nor valuations so high.

Paper prices have flattened

North American merchants have seen September purchases softening and no evidence of price increases for uncoated free-sheet—despite proposals from Weyerhaeuser and Boise Cascade. After producers cut capacity, spot prices have risen by $150/ton so far this year to $850 for uncoated white bond sheets used in copiers. Note: International Paper, the No. 1 supplier, did not announce an autumn price hike. Meanwhile, RISI.com is reporting that soft demand and weak pricing have become the hallmarks of coated paper markets this month. It’s supposed to be the busiest time of year for commercial printers, but production of catalogs is down and the typical late summer/early autumn tightening of supply hasn’t happened. In fact, there’s been aggressive price discounting reported from buyers of coated papers, especially No. 4 coated mechanical.

Newsprint Pricing Stable or possibly Declining

Producers of Newsprint (the paper used in newspapers) continue to witness pricing pressure. The pricing for 30 pound - standard newsprint continues to be flat even with the announced September announcement of $40 (initially announced for August). Buyers’ strong rejection (and depressed spot market pricing) have forced producers not to enjoy ANY increase – in fact, industry rumor outlines Newsprint now is actually transacting at $655/metric ton (from the market list price of $670). Consumption has fallen nearly 8%.

Pulp & Paper Prices Are Holding Steady – For Now

Mark Wilde of Deutsche Bank presented the state of the Paper industry -
A few notes-
Pulp markets appear to be peaking. Current NBSK list prices are $770/mton in North America (up from $620/mton last September). Prices will be up q/q in Q3, but momentum is easing. The story is similar in the paper markets – Q3 prices are up sequentially, but there is growing uncertainty about the future. An uncoated free sheet September
price hike was deferred, inventories are rising and pricing on spot deals has eased. Coated paper prices are under pressure.
Containerboard demand is solid, but supply is more readily available and there is uneasiness about cyclical easing as well as the late November seasonal slowdown.

Pulp Market on the Rise ... for now

The bell weather pulp index - NBSK - is now at a list price level in USA of $770/Metric ton - up from $620/mt in September of 2005. The paper producers are now witnessing a slow down in demand (less consumption) and Pulp producers are now adding capacity and restarting curtailed equipment- for these reasons, the pulp market may have peaked.

M-Real Announces Extensive Restructuring Program

M-Real, a Finnish papermaker, announced it was launching an extensive restructuring program to cut costs and capacity. As part of the plan, the company is considering closing two paper mills and two paper machines, which would result in capacity reduction of about 485,000 tons per year of coated and uncoated woodfree paper combined. The company will take an impairment charge of approximately 200 million euros, and expects the program to be completed by the end of 2007.

Commerical Printers doing Better

RISI reported that commerical printers in North America increased both sales and earnings in the second quarter of this year compare to 2005.
Paper.com is a proud supplier of paper to this growing market; with over 20,000 kinds of paper.

Searching for Paper on the Web

Paper.com continues to grow, marketing over 20,000 unique items of paper. Top search providers based on the number of queries tallied by Nielson/NetRatings is
Google 50.2%
Yahoo 24%
MSN 10%
AOL 5.5%
Ask 2.3%
Others 8.0%

Xerox Introduces New Line of Papers

Xerox announced its new coated line grew with the addition of a new 60 pound coated sheet that is 25% lighter than competitors. This grade is 90 brightness and is designed for high volume digital printing.
Paper.com has the complete line of Xerox Papers in stock and ready for immediate shipment.

Paper Mill Purchased by Employees

The Blue Heron Paper mill employees recently purchased 100% of the stock from KPS Special Situations Funds - an investment firm that has made an equity stake in several paper mills. The mill produces 335,000 tpy of newsprint.
The only mill KPS still owns is the Blue Ridge Mill in North Carolina. This mill produces uncoated envelope and business papers as well as board. Total capacity is 578,000 tpy.

Market Pulp Still Strong

The market for pulp still appears to be strong. Many USA producers raised prises $20/ton in September and world shipments are up over 5%. Some equipment that was closed down is back in production and Latin America has introduced new capacity.

Printing and Writing Shipments Decreased in August

Total shipments of printing and writing papers fell 0.4% to 2.396 million tonnes in August, according to Canada’s Pulp and Paper Products Council. Of the four major sectors, coated mechanical was the only one to show a slight increase of 0.7%. Coated freesheet shipments fell 8.2%, uncoated freesheet dropped 2.8% and uncoated mechanical plunged 7.2% year-over-year.