Uncoated Free Sheet Market Remains Tight, URB, CRB Prices on the Rise

April 19, 2011 - In North America, uncoated free sheet producers have been keeping a careful eye on supply, and Domtarís recent announcement of the closure of a 125,000 tons per year paper machine at its Ashdown, Arkansas (USA) mill should tighten the market.

According to Deutsche Bank's (DB) latest market pricing review, Domtar's move suggests a focus on maintaining supply/demand balance in a structurally declining market. Preliminary March shipments were encouraging: +19.3% month/month and +4.0% year/year.

A $40/ton April price hike on offset grades is reportedly gaining traction, DB said. Many within the industry expect cut-size price attempt in May, DB added.

Offset prices in March were flat at $920-940/ton, or +4.2% year/year.

Recycled Board
RockTenn has just announced a $50/ton price hike on uncoated recycled board (URB), effective May 16. Earlier today, Sonoco announced a EUR 40/ton price increase on URB in Europe, effective early-May.

In coated recycled board (CRB), all the major producers have posted a $40/ton price hike, effective in April/early-May. The key driver is escalating input costs on fiber, chemicals, freight and fuel and strong order backlogs, DB noted.

CRB prices in March were flat at $870-890/ton, or +11.4% y/y.

URB March prices rose $5/ton to $655-685/ton, or +14.5% y/y.

Between the two grades, CRB demand appears stronger than URB, DB said.

SOURCE: Deutsche Bank