July 7, 2006 - Paper prices in China are 20 percent lower than in the United States, Christian Rynning-Toennesen, chief executive of Norway's Norske Skog, said yesterday in a newspaper interview.

China is one of the world's fastest-growing paper markets and Norske Skog has been steadily growing its newsprint capacity in Asia to offset slower markets in Europe.

Last year Norske Skog bought Abitibi-Consolidated's 50 percent stake of PanAsia Paper for US$600 million, and added further capacity with its new Hebei mill in Zhaoxian, China.

"The problem with China has been the overcapacity," Rynning-Toennesen told the Finansavisen newspaper.

Norske Skog operates five newsprint mills in the PanAsia region: Hebei Mill (China), Shanghai Mill (China), Singburi Mill (Thailand), Jeonju Mill (Korea), and Chongwon Mill (Korea).

Rynning-Toennsen told Finansavisen that a ton of paper in the United States would sell for $600 compared with $470 in China. But he stressed that demand in the rest of Asia was still strong.

SOURCE: Industry News Reports