InfoTrends’ new forecast on U.S. cut size (copy paper) paper distribution channels indicates that while paper merchants, office superstores, and contract stationer divisions will remain power houses for moving paper, the Internet, computer superstores, and mass merchandisers are expected to gain more presence as a source for paper
General merchandise stores and mass merchandisers will increase the amount of paper that they sell due to the sheer number of stores and the convenience of being able to purchase paper along with other goods.
The Internet and companies such as Paper.com, however, is the only channel expected to show double-digit growth in terms of cut size tons distribution between 2005 and 2010. In 2010, 73% of all cut size tons will be sold through non-retail channels. This is largely because supply chain management is an area of proficiency for non-retail channels, especially when it comes to delivering truckloads and pallets of paper.
Quick printers have also emerged as a source of cut size paper. As a complement to their traditional business, quick printers including FedEx/Kinkos are emphasizing their ability to capture supplies business at retail and on-line due to their number of store locations and access to product. Staples is also opening stand-alone quick printer locations that stock a limited number of office products SKUs including paper.
Cut size paper is a low margin, high volume market that is very competitive and price sensitive. Heavy cartons of paper can be expensive to move efficiently, and this has forced channels such as office machine dealers, forms distributors and manufacturers, and small storefronts to reconsider their roles in selling paper.
Saturday, March 03, 2007
Pulp and Paper Prices not in Sync
Wood pulp producers want to boost prices but paper makers are skeptical. That’s because overall demand for printing and writing papers in North America fell 3.2% in January compared with January 2006, according to Canada's Pulp and Paper Products Council. Total shipment levels were down 3.4% year-over-year at 2.26 million metric tons.
Pope & Talbot this week announced a $30/metric ton price increase for northern bleached softwood (NBSK) grades of market pulp—but pushed the effective date to April. The new North American list price would be $820/metric ton. Earlier, competitor Weyerhaeuser announced plans to hike NBSK by $20 in March to $810.Despite a $790 list price in February, buyers report NBSK sold for $745.
Meanwhile, International Paper, Georgia-Pacific and Weyerhaeuser separately informed U.S. paper-making customers they plan to raise their southern bleached softwood Kraft pulp prices by $20/metric ton in March. The current list price of SBSK is $750 but it sold on average for $720 in February.
Pope & Talbot this week announced a $30/metric ton price increase for northern bleached softwood (NBSK) grades of market pulp—but pushed the effective date to April. The new North American list price would be $820/metric ton. Earlier, competitor Weyerhaeuser announced plans to hike NBSK by $20 in March to $810.Despite a $790 list price in February, buyers report NBSK sold for $745.
Meanwhile, International Paper, Georgia-Pacific and Weyerhaeuser separately informed U.S. paper-making customers they plan to raise their southern bleached softwood Kraft pulp prices by $20/metric ton in March. The current list price of SBSK is $750 but it sold on average for $720 in February.
Abitibi and Bowater Merge
As reported in past, the two newsprint producing giants, Abitibi and Bowater have agreed to combine in an all stock merger of equals. The new company will be called AbitibiBowater and will have revenues of nearly $8billion. This new company will be the largest newsprint and publication paper producer in North America.
PIA/GATF report on Survey of Printing Industry
According to printing companies recently surveyed, the most significant issue currently challenging the company was labor and staffing. This was followed by competitor’s pricing, raising cost of paper, health insurance, and declining demand.
The survey also revealed printers that focused on specialty printing grew the most(+8.6%) in 2006 followed by Business Forms (+5.7%), General Commercial Printers(+4%), Greeting Card Printers(+4%), and Newspaper (+2%).
Last comment survey reported included traditional ‘ink based’ printers hold @75% of the market but is decreasing due to an increase in demand for digital printing.
The survey also revealed printers that focused on specialty printing grew the most(+8.6%) in 2006 followed by Business Forms (+5.7%), General Commercial Printers(+4%), Greeting Card Printers(+4%), and Newspaper (+2%).
Last comment survey reported included traditional ‘ink based’ printers hold @75% of the market but is decreasing due to an increase in demand for digital printing.
News on Tissue Paper
You may recall that Kruger purchased all the tissue assets of Scott Paper in 1997 and this included a 10 year licensing agreement for very popular consumer trademarks such as Scott, Cottenelle, and ScotTowels. Accordingly, Kruger has announced names changes for these best selling tissue brands; Cottonelle will become Cashmere; ScotTowels will become SpongeTowels; Scotties, and Purex, and Viva will all become White Swan.
Domtar Shelving Maine Paper Machine for March
Domtar’s Woodland Paper mill will be idling a paper machine during the entire month of March, a move that could impact as many as 90 employees, according to the Bangor Daily News.
Company officials told the paper that the action is being prompted by market-related conditions. The machine is slated to be refired on March 29.
Company officials told the paper that the action is being prompted by market-related conditions. The machine is slated to be refired on March 29.
Pulp Prices Increase …. Again
Domtar became the fourth major NA producer to announce a $20/ton price hike for Pulp for March. The hike would make NBSK $810/ton and SBSK $770/ton. Higher pulp prices may lead printing & writing paper producers to charge higher prices.
Saturday, February 17, 2007
Paper's moment may have finally arrived.
Industry momentum has turned. Over the past 4-6 weeks, to our surprise, momentum in many paper markets has swung around. Industry backlogs and pricing are emerging from the mid-winter doldrums much
stronger than we expected. In many cases, this looks like a global phenomenon.
The biggest wildcard market is uncoated white paper. In late 2006 and beginning of this year - price slippage has raised producer’s Concerns; however, we are fairly bullish on prospects. With market pulp costs still rising and both Domtar & International Paper likely to idle capacity (potentially 5-6% of North American supply) during next few months, it is hard to envision much further pricing downside. Indeed, we think a more likely scenario is for prices to begin rebounding by
late Spring.
We think uncoated white paper markets could begin to show similar strengthening.
stronger than we expected. In many cases, this looks like a global phenomenon.
The biggest wildcard market is uncoated white paper. In late 2006 and beginning of this year - price slippage has raised producer’s Concerns; however, we are fairly bullish on prospects. With market pulp costs still rising and both Domtar & International Paper likely to idle capacity (potentially 5-6% of North American supply) during next few months, it is hard to envision much further pricing downside. Indeed, we think a more likely scenario is for prices to begin rebounding by
late Spring.
We think uncoated white paper markets could begin to show similar strengthening.
Shipping Rates continue to increase
Shippers such as Paper.com continue to shake our heads over recent increases in carrier fees. The big Three – UPS (Paper.com’s
exclusive shipper) Federal Express, and DHL have all announced an increase of 10% for this year. This year the USPS will also increase their rates.
Three major reason for these increases-
1-Cost of Carriers operations – primarily fuel costs
2-Competition – (or lack of) With only three major options – the industry acts like a monopoly - they all appear to increase rates in step.
I note, regional alternatives have poor tracking and diligence reveals excessive damage.
3-Demand – With the success of Internet companies such as Paper.com, this new shipping demand has kept business booming and offers limited motivation for the carriers to discount prices.
We at Paper.com constantly review shipping costs to offer the most competitive rates to our end users.
exclusive shipper) Federal Express, and DHL have all announced an increase of 10% for this year. This year the USPS will also increase their rates.
Three major reason for these increases-
1-Cost of Carriers operations – primarily fuel costs
2-Competition – (or lack of) With only three major options – the industry acts like a monopoly - they all appear to increase rates in step.
I note, regional alternatives have poor tracking and diligence reveals excessive damage.
3-Demand – With the success of Internet companies such as Paper.com, this new shipping demand has kept business booming and offers limited motivation for the carriers to discount prices.
We at Paper.com constantly review shipping costs to offer the most competitive rates to our end users.
Neenah introduces New Transfer Paper
Neenah Paper recently introduced Jet Trans Iron Man Inkjet Transfer Papers for home use. The grade will allow end user to print an image from Inkjet desktop printer onto a light cotton or synthetic and testing confirms at least 15 washes without damage to image.
Paper.com will carry this grade and support orders as little as a 500-sheet ream.
Paper.com will carry this grade and support orders as little as a 500-sheet ream.
Glatfelter expands Carbonless Line
Glatfelter introduced Xcelerator, a new line of carbonless paper for digital environments. The paper is engineered with greater bulk to increase sheet stability for improved performance. The line offers an ultra white CB ply and is 100% guaranteed. Paper.com supports this grade as well as Appleton’s NCR; Xerox; Enterprise and TST continuous; and Nekoosa’ s carbonless line. Paper.com also carries similar company’s thermal papers.
Smart Papers out of Bankruptcy and producing Paper
We have reported of Smart Paper’s status in past, and they continue to progress out of Chapter 11. Paper.com will again support this mill’s offerings. The 120,000 ton per year Hamilton, Ohio mill will manufacture 12 premium cast coasted, matte coated, and uncoated text and cover brands on three paper machines and 22 casting drums. Plainfield Capital purchased Smart and will invest an additional $500,000 on new equipment, improved color systems, and new converting and embossing equipment.
Many Large consumers of Paper go with Lighter Paper
The USA has witnessed a migration to lighter weight papers with most clients that consume large volumes. Lighter weight paper provides many advantages such as more paper (surface area) per pound, savings on postage, and transportation. The producers of commodity paper have learned to manufacture quality paper at lighter weights. The evolution of pigments has been redesigned to overcome opacity concerns and allow for increased brightness and improved run ability on press. Platy kaolins, combined with engineered carbonates have allowed publication and catalogue papers the quality required. The USPS has announced yet another increase for this year – look for further weight reductions – also, less pages and smaller sized publications.
Paper.com has over 20,000 papers – from heavy weight to the lightest manufactured.
Paper.com has over 20,000 papers – from heavy weight to the lightest manufactured.
Cenveo Acquires Printegra
Cenveo has dipped its feet in the acquisition pond again, obtaining Printegra Corp. of Peachtree City, GA, from Huron Capital Partners for an undisclosed amount of cash.
Printegra has two divisions, National Imprint and Synergy Label, with 14 manufacturing facilities across the country. The company, which specializes in short run printing, posts annual sales of roughly $90 million. It produces labels, business forms, envelopes and security documents, among other products.
“This strategic acquisition immediately establishes Cenveo as the leader in the growing market for short run and highly customized printed products,” Bob Burton, Cenveo chairman and CEO, said in a release. “The combination of these market leaders is a powerful opportunity to solidify our position as the leading competitor in the custom envelope print market.
Printegra has two divisions, National Imprint and Synergy Label, with 14 manufacturing facilities across the country. The company, which specializes in short run printing, posts annual sales of roughly $90 million. It produces labels, business forms, envelopes and security documents, among other products.
“This strategic acquisition immediately establishes Cenveo as the leader in the growing market for short run and highly customized printed products,” Bob Burton, Cenveo chairman and CEO, said in a release. “The combination of these market leaders is a powerful opportunity to solidify our position as the leading competitor in the custom envelope print market.
Vietnam is Newest Player in Paper Market
The Ministry of Industry in Vietnam is currently raising capital to build a paper mill. Current Vietnamese paper producers only make simpler kinds of paper, such as newsprint, writing paper, and packaging paper. The Ministry of industry will focus on developing forests and ensuring sufficient supplies of raw materials for producing 600,000 tones of pulp by 2010 and 1.8 million tones by 2020, as well as to reach the target of meeting 70 per cent of domestic demand by 2020.
Wednesday, February 14, 2007
Market Pulp Update
Strong demand coupled with supply disruptions from mill closures assisted North American market pulp producers to advance prices to the highest levels in over a decade.
Many producers shuttered inefficient equipment and costs of manufacture increased such as energy and wood sources during 2006 creating an environment for advancing prices. The unofficial count was 11 pulp mills closed, displacing 2.3 million tons – 7 of which produced Northern Bleached Softwood Kraft (NBSK). US list price for the NBSK rose from $640 to $725 / ton by July 2006. The 4Q06 allowed for pricing to reach $770/ton for NBSK; $685 for NBNK; $708 for BEK-( Bleached Eucalyptus Kraft). Look for further increases throughout 2007.
Many producers shuttered inefficient equipment and costs of manufacture increased such as energy and wood sources during 2006 creating an environment for advancing prices. The unofficial count was 11 pulp mills closed, displacing 2.3 million tons – 7 of which produced Northern Bleached Softwood Kraft (NBSK). US list price for the NBSK rose from $640 to $725 / ton by July 2006. The 4Q06 allowed for pricing to reach $770/ton for NBSK; $685 for NBNK; $708 for BEK-( Bleached Eucalyptus Kraft). Look for further increases throughout 2007.
Observations on the paper Industry
The paper manufacturing printing and writing sector has done a good job balancing supply with demand and we believe this will continue with additional mergers and equipment curtailment as the industry rationalizes assets. The industry was hurt in 2006 with increased prices for raw materials including, fiber, chemical, energy, and transportation cost increases. The year 2007 will continue to be a challenge with the USPS increasing postage and increased competition from Asia imports. Although Europe appears busy and has reduced tonnage shipped in USA – Asia countries such as China, Indonesia, and South Korea have increased coated free sheet shipments and they are now including web grades to compliment the sheet fed grade offerings.
Some of the more meaningful 2006 events include- International Paper sold its coated division to Versa; Weyerhaeuser and Domtar merged; NewPage shut down large two paper machines.
Newsprint continues to struggle with newspaper circulation down, excess capacity, reduced web sizes, lighter basis weights, and increased imports from China. US Dailies consumed 500,000 fewer tons in 2006 versus 2005. Although Newsprint is transacting above its historic low of $445 (Aug2002) to a present level of $675 – it is down from its
High in July 2006.
Some of the more meaningful 2006 events include- International Paper sold its coated division to Versa; Weyerhaeuser and Domtar merged; NewPage shut down large two paper machines.
Newsprint continues to struggle with newspaper circulation down, excess capacity, reduced web sizes, lighter basis weights, and increased imports from China. US Dailies consumed 500,000 fewer tons in 2006 versus 2005. Although Newsprint is transacting above its historic low of $445 (Aug2002) to a present level of $675 – it is down from its
High in July 2006.
Plastics demand outpacing paper 10:1 Plastics demand outpacing paper 10:1 Plastics demand outpacing paper 10:1
From a Freedonia Report
The ubiquitous grocery bagger's question, "Paper or plastic?" is being answered more and more with a resounding "Plastic" when it comes to consumer packaged-goods makers and their choice of converted materials and containers. Plastic is expected to increase its share of the market to 53 percent (in pounds) in 2010, according to a new study by Cleveland-based researcher The Freedonia Group, Inc.
This percentage understates plastic's share because less plastic is generally required than paper in most applications due to its lighter weight. Plastic's share of the market will expand at a slower pace than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. Overall, volume for these two fields will climb from 23.6 billion lbs last year to 25.6 billion in 2010—about 1.7 percent annually. Growth in demand for plastic packaging is forecasted to outpace that of paper packaging by a 10:1 margin through 2010. Demand will rise 2.9 percent a year versus paper's increase of only 0.3 percent. While barely in positive territory, this contrasts with the 1.0 percent annual decline in paper-packaging demand seen in the 2000-05 period. Plastic’s advances will result from its competitive cost and performance advantages over paper, Freedonia says. Robust growth is expected for single-serve plastic milk bottles, driven by conversions from half-pint tabletop cartons in quick-serve restaurants and school lunch programs. Foodservice demand will be sparked by growing use of paperboard boxes, cartons, buckets and pails, wraps and bags. While most dairy applications for paper are mature, watch for frozen novelties to drive folding-carton growth.
The ubiquitous grocery bagger's question, "Paper or plastic?" is being answered more and more with a resounding "Plastic" when it comes to consumer packaged-goods makers and their choice of converted materials and containers. Plastic is expected to increase its share of the market to 53 percent (in pounds) in 2010, according to a new study by Cleveland-based researcher The Freedonia Group, Inc.
This percentage understates plastic's share because less plastic is generally required than paper in most applications due to its lighter weight. Plastic's share of the market will expand at a slower pace than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. Overall, volume for these two fields will climb from 23.6 billion lbs last year to 25.6 billion in 2010—about 1.7 percent annually. Growth in demand for plastic packaging is forecasted to outpace that of paper packaging by a 10:1 margin through 2010. Demand will rise 2.9 percent a year versus paper's increase of only 0.3 percent. While barely in positive territory, this contrasts with the 1.0 percent annual decline in paper-packaging demand seen in the 2000-05 period. Plastic’s advances will result from its competitive cost and performance advantages over paper, Freedonia says. Robust growth is expected for single-serve plastic milk bottles, driven by conversions from half-pint tabletop cartons in quick-serve restaurants and school lunch programs. Foodservice demand will be sparked by growing use of paperboard boxes, cartons, buckets and pails, wraps and bags. While most dairy applications for paper are mature, watch for frozen novelties to drive folding-carton growth.
Monday, February 12, 2007
Neenah Paper Acquirers Fox River Paper Company
Fox River agreed to be acquired by Neenah Paper. The formal announcement was made by Fox River’s CEO, Jeffery Miller, citing rising costs, decreased demand due to electronic communication, and excess capacity for their grades' demand.
Fox River produces premium printing and writing grades – all available through Paper.com. In time, the Fox River name will disappear and brands will be integrated into the Neenah paper product offerings.
Fox River produces premium printing and writing grades – all available through Paper.com. In time, the Fox River name will disappear and brands will be integrated into the Neenah paper product offerings.
more on COATED FREE SHEET
Most producers have announced $50-$60/ton hikes on lower grade coated free sheet for March. It is interesting to note that Asia Pulp & Paper "led" the increase, while major offshore producers like Lecta, Sappi, and Stora quickly followed. Rising pulp costs and capacity reductions are both helping to firm the market. NewPage recently announced the permanent closure of a machine @ Luke, MD and extensive downtime at Rumford, ME.
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