January 2021 Paper Market Update

International Paper To Spin-Off Its Printing Papers Segment
IP announced its plan to spin-off the company’s Printing Papers segment into a standalone, publicly-traded company ("SpinCo"). This move will enable International Paper to focus on its Industrial Packaging segment, and capitalize on the growing demand for corrugated packaging. The transaction, which is expected to close in the third quarter of 2021, will result in two streamlined companies — SpinCo and International Paper. SpinCo will have approximately $4 billion in sales and operate 8 mills with 2.9 million metric tons of annual capacity and 0.4 million metric tons of coated paperboard capacity. (Nasdaq)

UPM Completes Permanent Closure Of Its Kaipola Paper Mill In Finland UPM permanently idled PM 4, the last of its Kaipola mill’s three paper machines, on January 2, completing the closure of the whole plant. The machine used to produce 150,000 tonnes/yr of improved newsprint paper. In December 2020, UPM shut PM 7, which produced 270,000 tonnes/yr of standard and improved newsprint, and PM 6, which produced coated mechanical reels and had a 300,000 tonne/yr production capacity. The firm announced its intention to permanently idle the Kaipola mill at the end of August. (RISI)

Graphic Paper Shipments In The U.S. Fall 24% Year-Over-Year According to the American Forest & Paper Association (AF&PA) total U.S. printing-writing paper shipments decreased 24 percent in November 2020 compared to November 2019. U.S. purchases of total printing-writing papers decreased 16 percent in November compared to the same month last year. Total printing-writing paper inventory levels increased one percent when compared to October 2020.

Quad Closes Three More Plants Citing “volume declines” Quad Inc. will close three more commercial printing plants — in Oklahoma City; Nashville, Tennessee; and Fernley, Nevada. The company attributed decreased volumes in part to “an already challenging retail environment” that has been exacerbated by the Covid-19 pandemic. Quad’s (NYSE: QUAD) commercial printing revenue for the nine months ending Sept. 30 was down 29% to $1.59 billion compared with $2.25 billion in the same period of 2019. Earlier this year, Quad closed four plants and eliminated 1,100 jobs. Those plants were in Taunton, Massachusetts; Charlotte, North Carolina; Portland, Oregon; and Riverside, California.

Demand and Operating Rate Forecasts (RISI)

U.S. Economy and Paper End-Use Indicators


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