Industry News Paper Market

Industry News

  • Coated Freesheet Mill West Linn Complete Closure

– October 16th announcement and immediate closure related to loss of pulp supply and exposure to higher market pulp prices

3 PM’s total 270,000 tons/year;7% of North American supply

http://westlinnpaper.com/announcement.html

 

  • UPM Announces Shut of PM5 at Blandin Mill in Q1 2018

Produces 128,000 tpy of coated groundwood, 5% of North American supply

Affected business to be transitioned other PM’s in UPM system

https://www.upmpaper.com/whats-new/

 

  •  Verso Announces Formation of Strategic Alternatives Committee

Committee will identify and evaluate strategic transactions including the possible sale of some Verso mills

http://investor.versoco.com/2017-09-21-Verso-Corporation-Board-of-Directors-Forms-Strategic-Alternatives-Committee

 

  •  NORPAC Trade Case Against Canadian Producers of Uncoated Groundwood Publication Grades Proceeds

US ITC found merit to dumping (ADD) and government support (CVD) claims against Canadian producers (Resolute, Kruger, Catalyst, White Birch) and referred case to Department of Commerce for further review

After request for delay, CVD determination now scheduled for 1/8/18, ADD determination now scheduled for 1/16/18

 

  •  Georgia Pacific Closing Uncoated Freesheet PM in WA

Cut-size and offset PM at Camas, WA to close in Q2 2018

http://www.camaspostrecord.com/news/2017/nov/14/georgia-pacific-restructuring-camas-mill-eliminating-280-to-300-jobs/

 

  •  UPM Signs Deal for Potential New Pulp Mill in Uruguay

Two-billion-euro project could scale up to produce two million tons annually of eucalyptus pulp

http://www.upm.com/About-us/Newsroom/Releases/Pages/UPM-and-the-Government-of-Uruguay-sign-an-investment-agreement-to-establish-a-co-001-Wed-08-Nov-2017-00-18.aspx

 

Publication Paper Pricing – Historical View 2010 – 2017

In light of the recent price increases in publication grades of paper here are the high and low prices for benchmark grades from the RISI Paper Trader since 2010 (post Great Recession) to give context.

 Grade

High

Period

Low

Period

Current

50# Offset

$47.50

Jul 2011

$41.75

Jul-Sep 2017

$42.25

60# #3

$50.50

Jul-Nov 2011

$41.75

Mar-Jun 2017

$43.50

40# #5

$46.25

Aug-Sep 2011

$36.75

Feb-Mar 2010

$38.75

35# SCA

$42.50

Aug-Nov 2011

$35.25

Jan-Sep 2017

$36.00

 

Mill Operating Rates

(shipments to capacity – not seasonally adjusted)

 

Product Segment Commentary

  • Coated Freesheet

Q4 operating rates in high 90’s due to seasonal demand and loss of West Linn, Appleton Coated (14% of N.A. supply)

Lead times as much as 8 – 10 weeks

Near to mid-term forecast is for mills to operate at or close to full capacity

SAPPI conversion project at Skowhegan mill will remove 30 days of production from 1 of 3 paper machines in Q1 2018

Mill inventories are low with little time near term to restock

– Demand decline moderating at less than 5%/year loss

– $2.00/cwt price increases announced for November 1

 

  • Coated Groundwood

Q4 operating rates in high 90’s to over 100 due to seasonal demand and July capacity loss (Resolute’s PM2 at Catawba)

Lead times 4 – 8 weeks

– Demand decline continues close to double digits/year

UPM PM5 closure will keep remaining capacity busier in H1 2018 than historical averages

 

  • Uncoated Freesheet

After one-month blip in August to 99% operating rates fell back to yearly average of 89-90%

Capacity loss in process due to closure or repurposing coated freesheet capacity back to coated grades

PCA converting 1PM in Q2 2018; GP closing 1PM in Q2 2018; IP converting 1PM in 2019

Decreased supply to West Coast coming in 2018 could require longer lead times and/or freight considerations

Suppliers continue to balance supply and demand to help manage prices

 

  • Uncoated Groundwood

High bright ground grades lead times 4 – 8 weeks in part due to loss of capacity in Q3 2017

– SC grades continue to suffer due to loss of retail advertising

Newsprint capacity closures resulting in high operating rates and higher prices for near to mid-term

Cloud of unfair trade case hanging over Canadian producers of newsprint/high brights which could result in price increases or mill closures if duties are imposed

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