Top Paper Producers

Pulp and Paper International just reported on the top producers for 2008. The list illustrates some changes in that several mills merged or shuttered equipment. International Paper remains at #1, but two Chinese names entered the list, Shandong Chenming and Nine Dragons. Also companies such as Koch (GP), Kruger, White Birch, Asia Pulp and Paper, and APRIL did not make this list. Check Coy Paper's web site on Industry Resources Tab for more details.
Top Producing Areas tons per year (% world)
North America – 70,020,000tons paper (35%) / 13,921,000 mkt pulp (37.4%)
Europe – 70,480,000tons paper (35.4%) / 8,679,000 mkt pulp (23.3%)
Asia – 48,175tons paper (24.2%) / 1,884,000 mkt pulp (5.1%)

Top 10 Producers /2008 sales for paper and pulp
International Paper $24,782,000
Procter and Gamble $13,898,000
Stora Enso $13,450,000
Svenska Cellulosa (SCA) $13,427,000
UPM $13,043,000
Oji $11,084,100
Smurfit $10.335,500
Kimberly-Clark $9,992,000
Nippon $9,983,400
Mondi $9,284,300

Top 5 Tonnage producers (000's)
International Paper 17,128 tons
Stora Enso 11,746
UPM 10,641
AbitibiBowater 7,589,000
Oji 7,381

RISI Casts Shadow on Future of Paper Demands

John Maine of RISI advised that the decrease in shipments of 15 million tons of fine paper between 2007 and 2009 may never return because of all the major changes in electronic substitution and imports to North America and Western Europe. Worldwide there was a 3% drop in 2008 and 11% decline in 2009. A mild recovery is expected over the next year, but not to pre 2007 levels. Coy Paper news releases continue to report on China and India demand maintaining a growth of 3-4% with 4 million tons of new capacity coming on-line in China, mostly coated freesheet.

AbitibiBowater to Sell Texas Paper Mill

AbitibiBowater is reviewing the possible sale of its Lufkin, TX mill to CIT for $20.5 million. The plant has been closed since Dec. 2007 and consists of 895.5 acres of land, suitable for industrial development. The sale would save AbitibiBowater $3 million a year and would protect them from any environmental liability, which would be assumed by CIT.

Update on Uncoated Woodfree Papers

Although the majors (incl Domtar, IP, Glatfelter, GP and Boise ) all announced a $40/ton price increase for uncoated freesheet grades (all except business papers) the reality is the price is just being implemented. A quick check of the market, 50-lb offset roll prices range from $805-835/ton and cutsize grades range from $1010-1060/ton.
The market is in an interesting position, pulp prices are up, demand is OK at best, inventories are low (due to curtailments), BUT, Portical has a monster of a paper machine with tons to sell. See more on the Coy Paper site under the tab for Industry Resources and news.

Coated Market Trying to Improve Price

Several of the the major producers of publication grades, NewPage, Myllykoski and Verso Paper, are working hard with end users to increase the price of their products by reducing discounts. However, Coated Groundwood list prices in September remained flat at $770/ton. Buyers continue to report overall demand remains weak and producers continue to take downtime.

A recent survey of manufacturers of coated Groundwood publication papers revealed shipments were down 8% for 315,000 tons (vs. 2008) for the month of August. Meanwhile, the producers of Coated Freesheet reported shipments were 300,000 tons or down 17% (vs. 2008) during August.

Containerboard Shipments take Slight Drop

The Containerboard producers saw a slight decline in September and prices also fell by $10-20/ton. This is consistent with declines in recent months. We have reported on box shipments falling most of the year; August shipments continued the decline with 9.5% decrease from 2008 (Nearly 10%YTD so far 2009).
Spot prices on 42-lb unbleached kraftliner for Midwestern converters is in $450-470/ton range, and Northeast as well as West Coat is in the $420-440/ton range.
Some buyers report the small recycled mills as low as mid-$300/ton levels.

Paper Market Recap for August Shipments

Deutsche Bank just reported August and year to date paper shipments for printing & writing papers from North American producers.:
Uncoated Free Sheet, -10.8%YTD / -14.1%(August),
Light Weight Coated groundwood publication -8.2%YTD / -28.0% (August)
Coated Free Sheet -14.4%YTD / 25.1%(August)

Another Uncoated Paper Machine Announced for China

Hamadan Baiyun Paper announced they will build a 280,000 TPA uncoated printing/writing Paper machine in China, slated to start up in March 2011. They also plan a new 100,000 TPA pulp line. This mill has current production of 7 small with uncoated machines that produce capacity of 100,000 TPA and a 37,000TPA pulp line.

Pulp Inventory Down, Shipments Up

The pulp market enjoyed shipments of 3.6Million tons for August, which is a 13% gain (vs. August 2008). Inventory levels at the producing pulp mills were down to 27 days supply, versus 41 days in August of 2008. Of particular note was Chinese shipments increased 23% from July to 830,000 tons – up 132% from 2008!

More on the Antidumping Charges for Coated Paper

The USA producers of coated paper, NewPage, Appleton, and SAPPI, continued to charge China and Indonesia on specific printing and writing coated papers. Recall we reported on similar charges against these countries in 2007 and the International Trade Commission ruled against the charges.

Cascades Acquires two More Recycling Plants

Cascades announced the purchase of Sonoco Recycling and Yorkshire Paper Corp. Both of these companies provide on-site collection for retailers recyclable materials such as corrugated containers, paper and plastics. Yorkshire collects nearly 24,000 tons from retailers in New York and New England and Sononco collects 190,000 tons across Canada.
Cascades now has 19 recovery facilities supplying the company with half of the 2.2Million tons Cascades processes in their paper making process.

USA Containerboard Shipments Down

Production for the USA containerbroad producers fell nearly 10% in August (vs. August of 2008) and July shipments appeared flat (vs July 2008). The AF&PA reported containerbroad production this year is down over 12% (vs 2008 YTD). Components of this market were also down - Linerbaord down 12% and Medium fell 13% (vs 2008 YTD).

Will Imports Harm USA Paper Producers

As of today, I know of no USA producers in discussions for building a new uncoated paper machine and increasing capacity. Meanwhile, Portucel is ramping up production in Portugal and eyeing the North American market. Also, South America is introducing new capacity and surely the USA will be in their marketing plans. Unless demand in North America increases, this new supply could yield a sloppy uncoated freesheet market for years to come.

Coupons Making a Comeback ?

Paper ‘cents off’ coupons have been around for 100 years, and although redemption peaked in 1992 at 7.9Billion coupons, by 2006 through 2008 the redemption fell to 2.6Billion a year. However, with the current recession, marketers believe coupons are growing again. Initial reports indicate redemption is up 10% during the fourth quarter of 2008 and they increased nearly 25% so far in 2009. In the past, newspapers served as the primary source for coupons, now websites such as coupons.com offer printable versions and several sites allow the end user to customize exactly which stores or items to alert end users as to what is on sale. The next frontier is thought to be mobile coupons, forwarded to the smart phone. The New York Times reported the bulk of coupons are still clipped from weekend newspapers and digital coupons accounted for less than half of one percent. Let’s hope the newspapers can hold on to this... declining coupons from newspapers means decreased newsprint consumption and one more reason for the end user to not buy a newspaper!

No Challenges to Recent Pulp Prices

Snap Report from Paper Association -
Pulp price increases announced throughout the world, effective with October shipments: Arauco of Chile to increase prices in China on 3 grades of pulp, Donghae Pulp of S. Korea to raise BHK in China, Canfor Pulp to raise NBSK in NA and Asia, Domtar to raise NBSK in NA, Sodra and Fibria to raise NBSK in Europe

China Boosts Paper Production

Chinese paper production was over 50 million tons (up 6.2%) for the first half of 2009. Several closed mills re-opened with a reviving economy yielding increased demand, and low cost raw materials. Note, China imports approximately 60% of their pulp (8.25 million tons) up 40% vs. last year.

Coy Paper and Vallely Blog on Twitter

All the news releases P. Scott Vallely reports on in the Current News on the Pulp and Paper Industry can be found with daily updates on Twitter. Click onto https://twitter.com/CoyPaper. Many of the releases are documented before they become public information. The twitter updates are convenience 140 character summers of each release and come right to your computer. The releases can also be found on the Coy Paper Web site at http://coypaper.com and click onto the industry resources tab. Also, an RSS feed is available. Happy reading. Would enjoy hearing some feedback.

Catalyst Paper in Talks to Restart Elk Falls Mill

Catalyst is in the middle of presenting a plan to restart production at the Elk Falls paper mill in British Columbia. The proposal is to start up at least 2 paper machines and begin a profit sharing system based on earnings in return for changes to wages and benefits. Elk Falls was shut in early February.

Will USA Manufacturing Ever Come Back?

Scary thought surrounding the pulp and paper industry is whether the production will return to normal times. Most think that manufacturing will see signs of life before 2012, but the industry will see more automation and more globalization of supply- good for companies – bad for employees. As the economy crawls out of recession and workers return to various factories and offices and homes begin to be brought – the forecast is for more paper (copies, invoices, acknowledgements, etc.) and more containers (more consumer units requiring corrugated container for packaging) demand. But, will China, India, Brazil and Russia fill the demand for paper?

AbitibiBowater Shutters Several Mills

The Coy Paper Company Blog continues to report on poor advertising and declining publication circulation because of the current recession.,
Like many forestry companies, AbitibiBowater has been hit hard by the slump in the North American advertising industry during the recession. Most publishers have cut the size of newspapers and magazines, reduced basis weight, switched to more economical papers, and decrease print runs in an effort to survive - all leading to less paper.

AbitibBowater just announced they will indefinitely close three Canadian mills and several paper machines involving four other mills, including one in the USA.
The company is slowly releasing details, but we understand mills effected include one of two newsprint machines in Clermont, Que.; the company will idle one of the machines at its Coosa Pines, AL paper mill indefinitely. The digital printing paper mill in Beaupre, near Quebec City, will be shut down completely; and, commercial printing operation at Fort Frances, Ont., will be closed. The industry has witnessed a 30 percent drop in demand in newsprint since the beginning of the year.