Brazil's Pulp Market Shows Strength

Brazilian pulp industry is starting to recover from the weak global demand for pulp and paper products, according to Wood Resources International (WRI).
In April, pulp exports equalled 766,000 tons, up 43 percent from the previous month and 140 percent higher than shipments a year earlier, WRI said in its Wood Resource Quarterly report.
The Brazilian pulp companies have benefited from closures of pulp mills resulting in reduced production capacity in the Northern Hemisphere and an increase in demand for pulp in China
Production reached 12.8 million tons, which was up from 11.8 million tons in 2007.

More on Coated Market Pricing

Most of the major producers of both coated free sheet and coated groundwood publication papers state the rate of decline in demand has slowed over the past few months. As reported earlier, Verso and NewPage have taken this opportunity to introduce price increases of $40/ton on Coated Free grades and an attempt to reduce discounts and increase transaction prices of $20/ton is solidly in the market for the publication grades.
The mills have experienced increases in input costs such as pulp and energy, also inventories levels have declined. Our read is the industry has a good chance of increasing transaction prices for coated papers - but may require market related curtailment of capacity to control supply.

All Major Mills Increase Newsprint Price

As a follow up to our earlier report, all of the major North American producers of Newsprint have now joined in announcing a price increase of $70/metric ton. The industry has really been licking its wounds, with a low market price in August of $470/metric ton - now mills such as Kruger, White Birch, Catalyst, Norpac, and Tembec have joined AbitibiBowater with the increase.
These mills make up 9.6 million metric tons of capacity.
All are introducing the price in two increments (September / October in East; October/November in West)

Georgia Pacific and International Paper jointly purchased the old Curtis Mill

Georgia Pacific and International Paper jointly purchased the old Curtis Mill in Milford, NJ and will clean up the site. The mill produced 175TPD of waxed cereal bag liners.

Box Company to Pack Up and Leave

Smurfit-Stone Container Corp., a Missouri-based company, is planning to close its box manufacturing plant in Portland, leaving 93 people unemployed.

Coated Paper Price Hikes Attempted.

Verso announced $40/ton Coated Free Sheet price increase for shipments after September 15. NewPage followed this announcement and added a $20/ton hike on their coated publication grades. Many buyers were surprised. The market is still experiencing overcapacity. Perhaps, the shuttered equipment has created a shortage of supply to yield a tightening availability?

New Magazines to make debut

Although we generally report on the poor health of the magazine industry, a few recent magazine launches include: Afar, 944 Media Atlanta and Detroit, Port City Life as Maine, Bi-monthly UFC, Energy Efficiency & Technology, Healing Lifestyles & Spas , Vitamin Shoppe’s publications Amazing Health and Muscle & Performance. We wish them good luck in this challenging climate.

NewPage will Produce Uncoated Grades

NewPage Corporation, once 100% coated papers, will expand it's uncoated offering with two new products, Octane and High Octane.
Octane is an 80 bright, uncoated mechanical paper produced in Whiting, Wisconsin and is engineered for both heatset and coldset printing applications and has a standard offering in 35 lb., 38 lb., 40 lb. and 45 lb.
High Octane, an 84 bright, uncoated freesheet paper produced in Rumford, Maine is manufactured for heatset presses in a range of basis weights from 35 lb. to 45 lb.

UPM and Xpedx Ink Deal

UPM signed a multi-year agreement with Xpedx on distributing selected coated paper to commercial printers in the US and Canada. The paper will be available through all Xpedx distribution outlets and is ensured with PEFC or FSC standards.

Freedom Communications Becomes Statistic

Freedom Communications, who owns The Orange County Register of California and 30 other dailies, filed for bankruptcy. Under reorganization, 26 secured lenders will take over. Owners: the Hoiles family, Blackstone and Providence Equity will have equity stakes reduced to 2%.

Update on the Kraft Paper Market

The Kraft industry is witnessing increased demand in Kraft Paper and therefore the $40-50/ton price advance announced by major USA producers is gaining traction. Back logs have expanded from a few days to weeks.

Update on Market Pulp

We continue to report on the strength of the pulp markets, and this week is no different. All the major NBSK and hardwood producers announced $40/ton price increase for September. This will be the fourth consecutive price hike in North America and the fifth in Europe, and sixth in
Asia. Reports in the USA for spot transactions reveal NBSK price rose to $585-615/mton. The increases are a result of reduced inventories, continued strong demand in China, and increase in USA demand.
We also note, manufacturers such as Catalyst Paper, Domtar, and Fraser Paper have announced mill
restarts.

Update on Uncoated Woodfree Paper

It appears the recent announcement by the major North American producers for uncoated woodfree papers ( offset and commercial printing grades) for $40/ton is taking hold. This increase, effective with September shipments, excludes cutsize paper and converting grades. The primary factors supporting the higher paper prices include higher pulp prices, increased demand, and lower mill inventories from extensive curtailments and reduced imports.

Newsprint Advertising Down

According to the Newspaper Association of America, print ad sales plunged by more than 30% in the second quarter from a year ago, the worst decline on record. It's also steeper than the 29.7% drop registered in the first quarter -- which had been the worst decline on record.

A recent survey by MORI Research indicated "newspaper advertising remains the leading advertising medium cited by consumers in planning, shopping and making purchasing decisions." The research concludes that when the economy eventually begins its recovery, advertisers will return to spending, and newspapers will find themselves extremely well positioned to harness the strength of their print and digital platforms to build a brighter future. Let's hope this survey is right, for the sake the paper industry and the future of newspapers.

Coupons Arrive to Cell Phone

The newest marketing initiative is mobile coupons. Several new companies have emerged that are forwarding relevant coupons to folks that opt in to programs to electronically (via Smart Phone) receive coupons. This is becoming a growing feature and advertisers such as Kmart, Thyrsus, and Zales confirm the redemption rate is 15-20% (versus 1% for printed/ paper coupons). Another nail in the coffin for Free Standing Inserts and Paper.......

USPS Predicts Mail Volume will return

The United States Postal Service is forecasting that once the recession ends marketers will be back mailing promotions and corporations’ will be mailing invoices. The service has been in trouble, current 2009 estimate is for deficit for USPS of $7Billion and mail has been trending down – 2006 – 213billion pieces, 2008-202billion pieces and 2009 estimate is 175billion pieces. The Postal Service believes the biggest culprits include 70% of households with computers now pay bills on line; electronic mailing of tax returns; and a big campaign for ‘less paper is greener for America’. Also, recently, marketing for direct mail including credit card offers and bulk advertising is way down. Another challenge is the increase of communication through smart phones and not mail.
With knowledge of all these challenges, USPS feels printed advertising is more powerful than electronic communication and marketers will return once the economy improves. Less mail means a lot less paper!

AbitibiBowater Raises Newsprint Prices

AbitibiBowater is beginning to inform end users that they will implement a $70/ton newspaper price increase in two stages. The first is a $35/ton hike on Sept. 1; followed by another on Oct. 1.

The pulp market Continue to Increase thanks to China

2009 has yielded many challenges for the Paper producers; summarized by limited success in holding, much less increasing prices. Newsprint producers have seen their prices drop to cash costs -mainly due to pressure from poor demand. While demand has not been stellar, the uncoated freesheet and packaging producers have maintained significantly better margins and are now looking at price increases for the Fall.
Pulp pricing, the basic raw material for all paper, has recently witnessed price increases and extended backlogs. The Chinese market has really assisted improved pulp demand.

Packaging Companies Downsizing

In a recent survey by PFFC, distributors for unprinted rolls and sheets reduced their workforce as well as converters of Tags, labels, and tapes as well as paperboard packaging and will not rehire until several months on increased orders are actually on the books.

AbitibiBowater Plans to Restart Paper Machine

AbitibiBowater Plans to restart the #6 paper machine in Fort Frances, Ontario for 3 weeks. If more orders are received, they may run it longer.