Monday, April 02, 2007
Market Pulp
Softwood markets remain tight. Softwood inventory days of supply dropped from 27 in January to 25 in February. European producers announced $20/ton hikes in Europe for April, joining their USA counterparts, this increase has a good chance of going through. Expect hardwood markets to feel more impact from new Latin mills .
Finch - Another Paper Mill Sold
Atlas Paper Resources LLC, and other investors, to acquire Finch, Pruyn Paper mill. Atlas Holdings LLC is a holding company that operates Businesses in a number of industrial sectors, including the paper, packaging, wood products and steel industries.
Atlas Paper Resources will purchase all of the company's assets, including its manufacturing facilities in Glens Falls, N.Y., and its Adirondack forestland. Finch, Pruyn has the capacity to produce 250,000 tons per year of of premium uncoated paper for advertising materials, book publishing, and business office papers. The mill employs 850 works and has about 160,000 acres of land in the Adirondacks.
Paper.com carrys all the Finch, Pruyn products, all available and ready fo immediate shipment.
Atlas Paper Resources will purchase all of the company's assets, including its manufacturing facilities in Glens Falls, N.Y., and its Adirondack forestland. Finch, Pruyn has the capacity to produce 250,000 tons per year of of premium uncoated paper for advertising materials, book publishing, and business office papers. The mill employs 850 works and has about 160,000 acres of land in the Adirondacks.
Paper.com carrys all the Finch, Pruyn products, all available and ready fo immediate shipment.
Thunder Bay Paper Mill Sold
The Cascades Paper Mill, once called Provincial Papers and owned by Abitibi was sold to a private investment company called Thunder Bay Fine Papers. The mill has been closed since early 2006 and will take @35million to start back up. The mill made 170,000 tons per year of coated book papers.
Domtar Introduces Antimicrobial Paper
Domtar announced the introduction of antimicrobial paper. The sheet is coated with a silver compound that kills, most bacteria – as well as odors, fungus, mold and mildew. This will be sold as 8 ½ x 11” office paper for both inkjet and laser desktop copiers.
Georgia Pacific to take Down Time
Last week Georgia Pacific announced it will permanently shut down the 110,000 ton/yr uncoated Freesheet PM 4 in Wauna, OR. This mill produced offset rolls.
Come to Paper.com for all your Offset uncoated Freesheet demands.
Come to Paper.com for all your Offset uncoated Freesheet demands.
Postal Rates to increase – will hurt Paper Sales
The US Postal Service recently announced a rate increase for first class stamps by 5.1% effective May 14; and a rate hike for publication mailing such as magazines and catalogues for July 15.
The increase for publications is one more component to add to all the other recent cost increases printers have experienced. Energy, freight, fiber, chemicals, and now distribution costs. Most likely reducing paper consumption to save money.
The increase for publications is one more component to add to all the other recent cost increases printers have experienced. Energy, freight, fiber, chemicals, and now distribution costs. Most likely reducing paper consumption to save money.
Wednesday, March 28, 2007
Slow Down in Advertising for magazines slows Down Paper Sales
The number of advertising pages in all the major publications remains flat, or slightly on the decline. As a result, magazines are producing smaller magazines and thus less paper is consumed. This mainly effects the groundwood containing sheets.
Pulp Prices up yet again
Pulp prices are continuing their steady upward march this year, tightening margins for paper and paperboard producers who have been having trouble getting sales price increases for their products.
Now, a handful of North American pulp makers have told customers they want further price increases on softwood kraft and fluff grades in April. The list price boost of softwood kraft grades is $20/metric ton; the proposed hike on fluff is $30/metric ton.
So, the proposed list prices next month will be $810/metric ton for northern bleached softwood kraft. Buyer surveys show that NBSK averaged $770 in the spot market, as compared with a list of $790. The new list will be $770 for southern bleached softwood kraft; this month, SBSK has averaged $735 versus a list of $750. Meanwhile, in fluff pulp, suppliers want to bring their list price to $820/metric ton from $790. This month’s spot has averaged $780.
Now, a handful of North American pulp makers have told customers they want further price increases on softwood kraft and fluff grades in April. The list price boost of softwood kraft grades is $20/metric ton; the proposed hike on fluff is $30/metric ton.
So, the proposed list prices next month will be $810/metric ton for northern bleached softwood kraft. Buyer surveys show that NBSK averaged $770 in the spot market, as compared with a list of $790. The new list will be $770 for southern bleached softwood kraft; this month, SBSK has averaged $735 versus a list of $750. Meanwhile, in fluff pulp, suppliers want to bring their list price to $820/metric ton from $790. This month’s spot has averaged $780.
Appleton Plans Thermal Paper Capacity Increase
North America’s largest thermal paper producer recently announced plans to increase capacity. They will spend $100million on a new coater for making thermal papers. Appleton believes the growth in two-sided thermal paper will continue. This type of paper is used for casino studs, point of purchase receipts, ballot box voting and deli stickers. Appleton Paper also produces carbonless papers.
Paper.com has Appleton's complete grade offerings, including all the entire family of NCR carbonless items.
Paper.com has Appleton's complete grade offerings, including all the entire family of NCR carbonless items.
Uncoated Papers will increase in Price
Demand for uncoated Freesheet continues to strengthen and with supply curtailment, producers will surely begin to increase pricing. Cost pressure also continues with energy prices staying high and increased pricing for pulp and chemicals. The producers of Text and Cover grades have already announced increase in price – lead by Mohawk, Neenah/Fox River, and Wausau.
Paper.com is the world's largest paper website, supplying nearly every mill's uncoated text and cover grade.
Paper.com is the world's largest paper website, supplying nearly every mill's uncoated text and cover grade.
North American Newsprint Producers continue to suffer
Pricing continued its downward spiral for January, February and so far this month (March)– witnessing a price decrease of $30/ton. Pricing now on 27.7lbs newsprint (typical weight) is $665/ton. This market continues to be beaten up by the internet.
Sluggish Box Demand
USA Box shipments showed slower than normal demand so far this year. 42lbs unbleached kraft linerboard remains at $510-520list with the bigger converters paying more like $480-490. Box sales are generally an excellent barometer for the economy.
Pricing indicators – Rolls – March 2006
30lbs Newsprint ………… $625/t – List Price – larger end users pay less
27.7 Newsprint …………... $665/t
#3 60Lbs CFS……………. $890-920/t
#5 $40lbs LWC ………… $755-780/t
50lbs UFS ………………..$800-820/t
27.7 Newsprint …………... $665/t
#3 60Lbs CFS……………. $890-920/t
#5 $40lbs LWC ………… $755-780/t
50lbs UFS ………………..$800-820/t
Profile of Coated Freesheet Grades
Coated Freesheet (CFS), also called Woodfree, are coated grades at the premium end of the publication grade spectrum and are used for high end catalogues, magazines, catalogues, annual reports, and advertising. Papers are rated according to gloss levels (matte, dull, gloss, cast coated), brightness levels (85-96); basis weight ranges from 50 -100lbs. Production capacity in North America is 4,560,000 tons - 420,000tons lower than last year because of machine curtailments. Operating rates in 2005 were only 88% slight improvement was witnessed in 2006 to 93%. We also note Europe producers forecast curtailing 560,000 tons in 2007.
We believe Coated Freesheet demand will continue to be sluggish.
Top North American Coated Freesheet producers
Mill Capacity Mkt Share
SAPPI 1,400,000 28%
StoraEnso 1,340,000 27%
NewPage 730,000 14.5%
Verso 560,000 11%
Tembec 310,000 6%
We believe Coated Freesheet demand will continue to be sluggish.
Top North American Coated Freesheet producers
Mill Capacity Mkt Share
SAPPI 1,400,000 28%
StoraEnso 1,340,000 27%
NewPage 730,000 14.5%
Verso 560,000 11%
Tembec 310,000 6%
Sunday, March 11, 2007
AF&PA survey says paper/board capacity declined in 2006
The American Forest & Paper Association (AF&PA) released its 47th Annual Survey of Paper, Paperboard, and Pulp Capacity.
According to the survey, U.S. paper and paperboard capacity continued to edge lower in 2006, declining 1.6% to 97.7 million short tons. U.S. paper and paperboard capacity contracted 4.7% in the period from 2000 through 2006 or at an average annual rate of 0.7%.
Looking forward, the survey indicates that paper and paperboard capacity will decline another 0.7% in 2007 and then re-expand nearly one percent during the subsequent two years—rising 0.7% in 2008 and 0.2% in 2009.
According to the survey, U.S. paper and paperboard capacity continued to edge lower in 2006, declining 1.6% to 97.7 million short tons. U.S. paper and paperboard capacity contracted 4.7% in the period from 2000 through 2006 or at an average annual rate of 0.7%.
Looking forward, the survey indicates that paper and paperboard capacity will decline another 0.7% in 2007 and then re-expand nearly one percent during the subsequent two years—rising 0.7% in 2008 and 0.2% in 2009.
Wednesday, March 07, 2007
Summary of UNCOATED FREE SHEET
As reported, Uncoated free sheet prices were flat in February. The market for UFS is reasonably tight, with pricing on the margin starting to trend upward. The issue over the next few months will be supply reductions - paper manufacturers reducing capacity. It is expected that some fall-out from the Domtar/Weyerhaeuser combination. In addition, during the second quarter of this year, International Paper will idle its 350,000 Pensacola, FL UFS machine in preparation for a conversion to containerboard. In total, 500-600,000/tons of capacity could be idled. European & Japanese producers have both announced pricing initiatives in the past 2 weeks. European UFS prices are reportedly well above US prices.
Update of COATED FREE SHEET
Most producers have announced $50-$60/ton hikes on lower grade coated free sheet for March. APP "led"
the increase, while other offshore producers like Lecta, Sappi, and Stora quickly followed. Rising pulp costs and capacity reductions are both helping to firm the market. However, the biggest issue is the potential for 70-100% duties on Asian imports. Preliminary finding from the Commerce Dept is due out in early April. Domestic shipments rose 3% in January.
the increase, while other offshore producers like Lecta, Sappi, and Stora quickly followed. Rising pulp costs and capacity reductions are both helping to firm the market. However, the biggest issue is the potential for 70-100% duties on Asian imports. Preliminary finding from the Commerce Dept is due out in early April. Domestic shipments rose 3% in January.
Neenah Paper Closes Paper Plant
Neenah Paper, a maker and distributor of specialty paper, said Wednesday it will close a plant it acquired when it bought Fox Valley Corp., parent of paper maker Fox River Paper Co.
The plant is located near Great Barrington, Mass. Last month the Atlanta-area company said it would buy Fox River, which has a total of 750 employees and four manufacturing plants, including 140 at the plant that is closing.
Neenah Paper will take a one-time cash charge of about $3 million for severance and other costs related to the closure.
The company said it expects ongoing annual savings of about $5 million from the deal, but that will not be realized immediately due to product transition costs in 2007.
"Closing the mill allows us to eliminate costs and improve margins while still serving the needs of key customers," said Sean Erwin, company chairman and chief executive. "Selected products made at Housatonic will be produced at our other sites, where we have available capacity and the ability to make these grades at a lower cost."
The plant is located near Great Barrington, Mass. Last month the Atlanta-area company said it would buy Fox River, which has a total of 750 employees and four manufacturing plants, including 140 at the plant that is closing.
Neenah Paper will take a one-time cash charge of about $3 million for severance and other costs related to the closure.
The company said it expects ongoing annual savings of about $5 million from the deal, but that will not be realized immediately due to product transition costs in 2007.
"Closing the mill allows us to eliminate costs and improve margins while still serving the needs of key customers," said Sean Erwin, company chairman and chief executive. "Selected products made at Housatonic will be produced at our other sites, where we have available capacity and the ability to make these grades at a lower cost."
Saturday, March 03, 2007
State of the Paper Industry
Notes on conference call held by Mark Wilde - Deutsche Bank - Equity Research
Mr. Wilde firmly believes markets for commodity grades are tightening. Three primary causes 1- supply side reduction in both North America and Europe; 2 – cost pressure such as gradual increases of fiber, chemicals, and transportation as well as recycled pulp; 3 – Demand in both Europe and Asia improving (not the case in North America). Market that is experiencing best recovery is containerboard - the January price increase of $40/ton is firmly in place; producers have adjusted production downward to maintain a tight market; and demand actually trending up.
Uncoated Freesheet grades have witnessed a 5-6% decline in capacity – look for more shuttered equipment for nonintegrated mills (mills that do not produce pulp) – thus tightening supply. Also, two big events – International l Paper transferring 350,000 tons of uncoated paper to now make packaging grades; and merger of Weyerhaeuser and Domtar they WILL rationalize equipment with closures. Also, Canadian dollar continues to be week and inventories in USA are historically low.
Accordingly, Mark Wilde forecasts slight tightening and a price increase in March / April for uncoated Freesheet.
He was not as bullish of coated papers. Although Europe has decreased imports into USA – Asia has increased. The publication-coated grades (LWC – groundwood) will continue to experience poor demand given the softness in end user markets – magazine, inserts, direct mail, and catalogues.
Mr. Wilde firmly believes markets for commodity grades are tightening. Three primary causes 1- supply side reduction in both North America and Europe; 2 – cost pressure such as gradual increases of fiber, chemicals, and transportation as well as recycled pulp; 3 – Demand in both Europe and Asia improving (not the case in North America). Market that is experiencing best recovery is containerboard - the January price increase of $40/ton is firmly in place; producers have adjusted production downward to maintain a tight market; and demand actually trending up.
Uncoated Freesheet grades have witnessed a 5-6% decline in capacity – look for more shuttered equipment for nonintegrated mills (mills that do not produce pulp) – thus tightening supply. Also, two big events – International l Paper transferring 350,000 tons of uncoated paper to now make packaging grades; and merger of Weyerhaeuser and Domtar they WILL rationalize equipment with closures. Also, Canadian dollar continues to be week and inventories in USA are historically low.
Accordingly, Mark Wilde forecasts slight tightening and a price increase in March / April for uncoated Freesheet.
He was not as bullish of coated papers. Although Europe has decreased imports into USA – Asia has increased. The publication-coated grades (LWC – groundwood) will continue to experience poor demand given the softness in end user markets – magazine, inserts, direct mail, and catalogues.
Newsprint market
The official newsprint price fell an additional $10/ton, after falling $35/ton over the last few months. Without more capacity
rationalization, prices could fall even further. The market is sloppy and needs a fix; it may come by a "merger of equals" between Bowater and Abitibi. However, we think an even better catalyst would be consolidation among 2nd & 3rd tier players. One other issue to watch: ONP (Old Newspaper =recycle fiber) costs. While the trades are showing prices up only about
$5/ton in February, our brokerage contacts are pointing to increases as large as $40/ton. This would have big implications for many producers, especially recycled-heavy producers.
rationalization, prices could fall even further. The market is sloppy and needs a fix; it may come by a "merger of equals" between Bowater and Abitibi. However, we think an even better catalyst would be consolidation among 2nd & 3rd tier players. One other issue to watch: ONP (Old Newspaper =recycle fiber) costs. While the trades are showing prices up only about
$5/ton in February, our brokerage contacts are pointing to increases as large as $40/ton. This would have big implications for many producers, especially recycled-heavy producers.
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