Uncoated Free Sheet Prices Slip, Coated Producers Pushing Increase

Nov. 23, 2010 - In North America, some key UFS (Uncoated Free Sheet) grades in slipped $10-30/ton in November, according to analysts at Deutsche Bank who cover the paper and forest products sector.

50-lb offset rolls were down $10/ton to $920-940/ton (+8.8% y/y). Cut-size prices were under more pressure, down $25/ton to $1,070-1,120/ton (+5.8% y/y).

“This is not surprising given weak October shipment figures, preliminary numbers were down -7.8% y/y — the weakest comp of the year (September = -6.8% y/y),” said senior analyst Mark Wilde.

“Prices are not down across the market as trade contacts report an uneven market that is tough to read. Reports suggest mid-tier mills, private label suppliers and importers are offering more discounts while premium brand prices are relatively stable,” Wilde noted.

Coated Free Sheet
List prices in November for CFS (Coated Free Sheet) were static. Reports suggest that producers have implemented $40/ton of the $40-60/ton price increase announced for mid-September/early-October, Deutsche Bank said.

Preliminary October shipments were +3.5% y/y (YTD +19.3% y/y). “This increase is the weakest we've seen since December 2009, mostly due to tougher y/y comps,” Wilde said.

In addition, CFS is becoming the center of a global trade war. Following an earlier US move, the European Commission last week imposed provisional anti-dumping duties of 39.1% on imports of coated fine paper from China (excludes APP). Brazilian producers are making similar claims as well.

“All of this suggests the oversupply situation for Chinese producers will get even worse. On a recent tour of China, we saw first-hand evidence of chaotic CFS supplies,” Wilde added.

SOURCE: Deutsche Bank