NewPage to Further Reduce LWC Production

NewPage Corp. announced plans to curtail lightweight coated (LWC) paper production by 40,000 tons in the fourth quarter as a result of a downturn in demand. The production curtailment is in addition to previously announced market-related downtime.

Paper Market Shipments

Notes from Deutsche Bank - Equity Research
Coated paper volumes fell more than forecasted. Coated Mechanical (LWC- Magazine Papers) fell 21.7% in October vs. October 2007 (-6.9% YTD). Coated Freesheet demand is somewhat better, but still fell 16.3% in October vs. October 2007 (-9.4% YTD). Weak demand for catalogues and magazines hurt the coated markets.

Uncoated shipments were off as well. Shipments of Uncoated Free Sheet fell 10.5% in October vs. October 2007 (6.1% YTD). Even Uncoated mechanical was weak, with shipments falling 3.1% in October vs. October 2007 (+10.6% YTD). This marks the first decline in over a year.

Magazines Announce Lay Offs

Time Inc. sent memos to employees at Fortune, Time, People and Sports Illustrated asking for volunteers to take buyout packages. The offer was part of Time Inc.’s reorganization plan announced a couple weeks ago and was limited to editorial employees at magazines that have contracts with the Newspaper Guild. The company is looking for roughly 100 volunteers from editorial, with about 40 from Sports Illustrated alone.

Meredith Publishing just reported they lay off 12 Senior Vice Presidents last week because of sluggish magazine sales and declining revenue.

Nukote introduces HP Indigo product line

from Labels and Narrow Web magazine

Nukote International has unveiled a new line of HP Indigo receptive substrates. In stock are white BOPP, clear BOPP, glossy paper and semi-gloss paper roll labelstocks. Specialty Indigo products such as synthetic paper in roll form or in cut sheets are also available.

“The release of the HP Indigo line adds to Nukote’s expansive selection of imaging products. We continue to invest in research and development to support customers as they take advantage of new opportunities,” says Steve Baiocchi, president of sales. Nukote’s Indigo product line has been certified for HP Indigo by the Rochester Institute of Technology Printing Applications Laboratory.

Nukote International, based in Rochester, NY, USA, provides a variety of products for more than 30,000 imaging devices, including ink, laser, toner, ribbons, thermal, wide format, industrial and packaging inks, specialized security coating, and extruded film applications.

Emails Grow

Not sure when the paperless office will formally be here, but the internet continues to cannibalize traditional paper demands.
Retailers and wholesalers expected to send 158 billion e-mail marketing messages in 2008 and 258 billion by 2013, according to 
Forrester Research.
Not too long ago, this was letters, direct mail, magazine advertisements and catalogues......

Uncoated Freesheet also witnessing Price Pressure

Reports in the market confirm producers of roll stock for uncoated freesheet are discounting to about $30-40/ton. Some of the production ending up in the market is from large coated manufacturers that have 'turned of the coater' and flooded the market with cheaper uncoated paper. We are beginning to also hear of discounts for large spot orders of cut size. Both Domtar (North America's largest producer) and Boise (#3) will idle equipment in an effort to stabilize supply and pricing.

Publication Papers Remain Weak in Demand

Producers of Groundwood containing papers for publications continue to take market related down time to maintain a balance because of weak demand. Magazines pages have been reduced, fewer catalogues are being mailed, and newspapers have reduced Sunday Inserts - all hurting Groundwood demand. Resulting from poor advertising pages (down 12% this year) and no relief in sight - 2009 is forecasted to be difficult for manufactures.
We have reported in past of paper producers taking down time - NewPage (Kimberly, WI); Kruger (Trois-Rivières -Québec -Canada); Domtar (Columbus, MS); AbitibiBowater (Catawba, SC). Although this will assist, we beleive manufactures will begin to 'officially' reduce pricing.

Pulp prices on the decline

Pulp prices continue to witness pressure due to demand reduction. Producer inventories have increased to 44 days (up from 30 days). Spot pricing of $500/ton for large orders of NBSK are rumored on shipments exported to China. Domtar and Canfor Pulp have reduced NBSK list to approximately $40-50/ton. We forecast today's spot pricing could become market pricing soon.

Two Newspapers Report Stable - nondeclining circulation

We continue to report on the decline of readers, and thus newspapers, in the USA. Newspapers such as the New York Times posted a 3.6% decline through September 30; Boston Globe reported a 10% drop.
However, the Wall Street Journal kept its circulation stable at 2million readers; USA Today and Chicago Sun Times also reported level sales at 2.3million and 313,174, respectively.
Most newspapers claim the internet is Cannibalizing business.

US News Magazine Becomes Monthly

US News and World Report, once one of the 'big 3 newsweeklies' (along with Newsweek and Time Magazine), announced it will now publish only just once per month. Newsmagazines have been struggling and hurt by the free availability of news and analysis on the web.
US News had averaged 1.8 million readers compare to 2.7million for Newsweek and 3.4million for Time.

Select Printers Announce Results

Quebecor World Inc. reported a net loss of US$64.2 million in the third quarter, as revenue declined to $993.6 million from $1.17 billion in the prior-year.

Valassis Communications posted a net loss of $5.2 million for the three-month period ended Sept. 30, compared to a net profit of $16.4 million in the prior-year quarter.

Appleton Reduces Carbonless Capacity

Appleton will idle some carbonless production capacity at the Appleton, Wisconsin Plant. The company also plans to transfer some production of thermal paper grades from the Appleton Plant to the company’s mill in West Carrollton, Ohio. .

According to Appleton, its Appleton Plant has historically been the first of the company’s facilities to be affected by changing demand for carbonless paper. Unprecedented economic conditions worldwide have compounded the effects of the ongoing decline in the use of business forms made from carbonless paper. Despite Appleton’s recent success at increasing its share of the world’s carbonless paper market, a sharp decline in demand for the product has created excess production capacity and staffing levels at the Appleton Plant.
Paper.com has all the Appleton carbonless products ready for immediate shipment.

Verso Paper to Take Coated Paper Downtime

As reported by PaperAge Magazine

October 28, 2008 - Verso Paper today announced that it intends to take approximately 50,000 tons of downtime related to coated groundwood production, primarily during the fourth quarter of 2008.

The specific timing and facilities impacted to achieve this curtailment will be determined as the fourth quarter progresses, Verso said.

This downtime is in addition to the approximately 43,000 tons of coated groundwood downtime that Verso has already taken or announced in the second half of this year, the company added.

“We remain committed to running our manufacturing operations in a manner to achieve a balance between our supply of paper and the demand for paper by our customers,” said Verso president and CEO Mike Jackson. “Based on what we currently see relative to demand and inventory levels, this additional downtime is necessary to help us maintain that balance.”

Verso's coated groundwood paper is used in catalogs and magazines.

Appleton Prevails in Trade Case Against Foreign Competitors

The International Trade Commission (ITC) has supported paper manufacturer Appleton in its complaint that Chinese and German companies are trading unfairly. The commissions ruling clears the way for the U.S. Commerce Department to impose anti-dumping and countervailing duties on lightweight thermal paper imported from those countries. Appleton claimed that the Chinese government subsidized its manufacturers and that both China and Germany sold their products in the U.S. at less than fair market value.
Paper.com markets many of Appleton's paper products.

In-Plant Printers Continue to Grow

In Plant Graphic Magazine recently released their survey of the in-plant market. These are companies that have elected to commission printing equipment on premise. When asked what the in-plant printing department produced the most of, they replied, in order of volume (top 5)
Brochures
Newsletters
Business Forms
Pamphlets
Manuals
More than half reported majority of the pieces printed were variable data printing for such jobs as,
Address labels
Recipients name
Whole paragraph of text
Interestingly, the vast majority state they have an in-plant printing center for more than convenience and service - most are a profit center!
Paper.com, a major website with 40,000 paper items, is a big supplier to these in-plant printers. The company will fulfill as little as one ream of paper and ships within 24 hours.

Watch your International Source!

NewPage Paper Company just released a document outlining Asian imports make up to an estimated 40% of the North American coated sheet paper market, but in many cases, consumers and corporations are not aware of the real source behind the paper they use. Many importers use private label brand names or re-branded names that obscure their identity and true manufacturing origins. It’s just one of a variety of surprises that can be found beneath the surface of paper’s global supply chain.
Unless they choose paper from a known source, with a verifiable supply chain, many North American paper buyers risk unknowingly supporting environmentally destructive practices. Paper processing that is not well regulated can cause air and water pollution, especially in countries where environmental policies are inadequate or not well enforced.
Note; nearly 80% of US mills use recovered paper and are certified by third party associations. Thirty-eight percent of wood fiber used in the United States for paper production comes from recovered paper, or post-consumer recycled fiber.

USA Newspapers Continue to Struggle

Circulation of US newspapers declined 4.6% in the past year as readers now rely on the internet. We also note reduction is due to publishers raising prices and limiting distribution. Weekday print circulation at 500 newspapers fell to slightly over 38million copies (versus 40million a yer ago).

Rachael Ray Goes Green

Rachael Ray's publisher, Reader's Digest, just reported that the magazine 'Every Day with Rachael Ray ' switched to 85% recycled paper, with 10% being post consumer. They claim the new paper is every bit as good in quality and will save 125,000 trees, 7800 pounds of hazardous air pollution, eliminate 380 garbage trucks of solid waste, and over 25 million tons of carbon dioxide. The publisher also chose a paper mill closer to the printer for savings of gas. The trucks deliver rolls of recycle paper to the plant and pick up printed waste to be returned to paper mill for future production.

Paper Industry Continues Sustainability to Environment

The paper producers now all offer grades with recycled post consumer fiber, many reclaim chemicals, all recycle water, and most consume alternative energy. The fact is, the industry has always been a good steward to the environment – they have always recycled broke, water, and chemicals. In fact, manufacturers plant 1.7million trees per day, more are planted than harvested. We now enjoy 12million more acres of forestland today than were in existence 20 years ago.
Of note, the USA publishers currently print 18,000 magazines and less than 1% print on recycled paper consistently. This might be because paper made from post consumer fiber typically costs a little more.

Longview Fiber closes paper machine

Longview Fiber Paper and Packaging is closing one of its paper machines Tuesday and laying off about 90 hourly workers by next week.
Fiber President Frank McCone says the slowing economy reduced demand for products produced at the No. 9 machine, including lightweight containerboard used in corrugated boxes and Kraft paper used in cement bags.
McShane says the move is a business decision and the company will re-evaluate whether to restart the machine next year.
The pulp and paper mill was sold to Brookfield Asset Management for $2.15 billion last year, ending 80 years of local family management.