Weyerhaeuser Reports loss for Forth Quarter

The paper industry is beginning to report results for the forth quarter. Weyerhaeuser joins International Paper in reporting a loss. Weyerhaeuser had a net loss of $211million. Management sited capacity curtailment and cutting jobs were primary reasons. Certainly, higher energy costs did not help!
Paper.com has all the Weyerhaeuser grades, available and ready for immediate shipment.

Thoughts for 2006

Paper and Packaging Magazine recently published results of a survey distributors commented on for 2006 forecast for paper.
-More optimistic than 2005 - unit growth 4-10%
-Most anticipate increase price for paper
-When asked about Internet sales - majority believed 'here to stay-and will grow' but many admit to 'only dabbled at web sales"
-Largest concerns for 2006
-Maintaining profit margins
-Inability to pass all paper price increases to end-user
-Increased cost of energy, making deliveries more expensive
-Foreign competition

Central Lewmar and Strategic Paper sold

Central Lewmar and Strategic Paper, two large, east coast paper merchants, were recently sold to 5Star and Chrysalis Capital. The new company will have sales of $800million. Leslie Stern will run the company.

FiberMark Out of Bankrupcy

FiberMark Paper emerged from chapter 11 as a private company. Silver Point Capital is the majority owner.

Koch Completes Acquisition of Georgia Pacific

Koch successfully completed the announced acquisition of the paper assets of Georgia Pacific. The name Georgia-Pacific will continue to be used. Koch Industries completed this $21billion deal in late December.

Weyerhaeuser shuts down 2 Paper Machiines

Weyerhaeuser will move forward on their announcement of permanently closing 2 paper machines. Both machines are located in Canada - one in Dryden, Ontario - producing 155,000 tons and the second located in Prince Albert, Saskatchenwan - producing 280,000 tons.

Uncoated Papers Finally Enjoy Strength

The year 2005 was not kind to uncoated printing and business/ copy papers. Demand continued to shrink, losing ground to electronic communication, imports, and high bright groundwood grades. The market attempted several unsuccessful price increases, inspite of the producers managing supply through curtailing equipment. Shipments for 2005 were off 4% versus 2004. The start of 2006 tells a different story. Both rolls and cut sheets will increase in price. International Paper and Weyerhaeuser (#1 and #2) with 45% of the market share are standing firm on this increase and #3-Domtar has also announced a price increase.

International Paper Posts Loss for 4Q2005

International Paper announced its 4th quarter results for 2005 with a $77million loss. Increased costs (primarily energy) were sited as cause for loss. Increased oil expenses effected transportation, chemicals as well as manufacturing expenses.

Domtar continues to make Reductions

Domtar, Canada's largest printing and writing paper producer , announced it would close a mill and shutter 2 paper machines. Management is also considering divesting of a paper mill. Permanent closure includes #10 and #11 paper machine in Cornwall, Ontario paper mill and the Vancouver, BC mill will be offered for sale. Total capacity involved includes 265,000 tons of uncoated and coated printing grades as well as 160,000 tons of market pulp.

U.S. Printing/Writing Paper Shipments end 2005 on Slight Downtrend

FROM paperloop.com - U.S. shipments of most of the major printing/writing paper grades at 24.58 million tons overall in 2005 were 441,000 tons or 1.8% lower than the 25.02 million tons reported in 2004, according the latest American Forest and Paper Association statistics.

Pulp Prices on the Increase

The American Forest and Paper Association reported that market pulp producers increased deliveries over 8% in December (compare to November). Spot prices for pulp are firming and reports outline clients with lowest prices witnessed an increase of $15/ton. Paper.com predicts the pulp market will soon announce a formal price increase of @$20/ton accross the board.

Newspapers still weak

Newspaper circulation, and thus paper consumption, continues to decline. The trends in newspaper readership mirror the increasing migration of advertising dollars to the web. Ironically, the newspapers that support a web have done well on the web segment of their business; however, with less people relying on the 'printed word' for advertisements and classified the paper used for newspapers has declined in demand.

Uncoated Market Firms UP!!

What a difference a new year makes. The producers of uncoated woodfree papers announced a price increase of $45/ton on rolls for this month, and just announced a price increase for the cut size (copy papers) effective for shipments in February. The markets have all suddenly become tight with supply.

More North American Paper Plants Close

Early reports are confirming that over 6.5million tons of paper manufacturing capacity has permanently been shuttered in North America, based on 2005 announcements. Most of these shut downs were producers in Canada. The industry continues to punish inefficient producers.

Newsprint Manufactures Attempt Price Increase

The North American producers of Newsprint (grade of paper used for printing most newspapers) have announced a price increase effective for February shipments. This increase was first announced by Abitibi-Consolidated, and the balance of the industry appears to be supporting this decision.

Energy Prices will Stay High

Crude oil prices soared last year amid strong demand and tight supplies, and could rise even higher in 2006 as the U.S. implements clean fuel rules and world energy needs remain strong. The Paper industry, a large consumer of energy, will certainly feel the cost pressures and continue to attempt price increases.

The 2005 average U.S. price for a barrel of crude oil was just under $57, a new record and an increase of 37% from the 2004 average price of just above $41. Despite expectations of tighter supply and high prices, experts at the U.S. Energy Information Administration say demand growth will remain resilient. Tougher U.S. sulfur requirements for gasoline and diesel could cut supplies as refiners shut plants to revamp units, and foreign suppliers find other markets with less stringent regulations, slashing U.S. imports.

Pulp Prices remain Stable

North America pulp pricing for NBSK (Northern Bleached Softwood Kraft) remained constant for the month of December. List price remained at $640/mt; however, NBHK (hardwood) declined $5/mt to $615. Many of the producers have announced a price increase for January of $20/mt. Many producers continue to be hurt with increased energy costs.

WS Packaging Purchases Narrow web Division of Renaissance Mark

WS Packaging Group purchased the narrow-web division of labelmaker Renaissance Mark on Dec. 1. The deal includes facilities in Fullerton, CA; Monterey, Mexico; Skokie, IL; and Scranton, PA.
"The Fullerton location will add to our growing West Coast presence and complement the recent acquisition of Ampersand Label in Garden Grove, CA," says WS chairman Terry Fulwiler. "Of special interest in this transaction is the Monterey, Mexico facility, which becomes the first international division within WS Packaging Group."
With its latest acquisition, WS Packaging now has 18 manufacturing plants with projected 2006 sales of more than $300 million.

International Paper Settles Lawsuits

International Paper Company, the worlds largest producer of paper, agreed to pay $18.7 million to settle lawsuits by customers that accused them of fixing prices on boxes and related paper.

NewPage Considers sale of Chillicothe, Ohio sites

NewPage Corp. has found a potential buyer for its two Chillicothe facilities. These plants produce uncoated freesheet paper at an integrated mill and coated paper at a converting facility.