U.S. Printing-Writing Paper Shipments Down in January

Feb. 22, 2012 - According to the American Forest & Paper Association’s January 2012 Printing-Writing Paper Report, total printing-writing paper shipments decreased 3% in January compared to January 2011. All four major printing-writing grades posted decreases compared to last January.

U.S. purchases (shipments + imports – exports) of printing-writing papers decreased 8% in January. Total printing-writing paper inventory levels increased 1% compared to December 2011.

AF&PA said in its report, "The pace of growth of the U.S. economy accelerated as we progressed through 2011, with each quarter posting ever higher growth rates (0.4%, 1.3%, 1.8%, and 3.3%, respectively) — and GDP is forecast to be 1.7% for the year. While the unemployment rate did not follow this exact pattern, the end result was the same, beginning at 8.9% for Q1, rising to 9.1% for Q2 and Q3, but then decreasing to 8.7% for Q4. The overall effect on total non-farm employment was positive for the four quarters of 2011, increasing 1.3%, 1.4%, 0.9%, and 1.3%, respectively.

"In spite of these positive developments, printing-writing shipments decreased in all four quarters for the year, and except for a slightly less negative quarter to end the year, slowed at a progressively declining rate — down 1.6%, 6.4%, 7.0%, and 4.9%, respectively."

UNCOATED FREE SHEET

Shipments of uncoated free sheet (UFS) decreased year-over-year one percent, but posted a five percent increase month-over-month. UFS shipments decreased 1% when compared to January 2011 to 780,400 tons.

U.S. purchases of UFS were down 2% when compared to January 2011 at 766,300 tons.

UFS inventories increased 1% compared to December, an increase of 11,600 tons.

Exports of UFS increased 22% year-over-year in December, the largest increase in 2011; and exports end the year up 4% over 2010. The past year includes one PM shut at Domtar's Ashdown, Arkansas mill during the summer, followed by the recent closure of Mohawk Paper's Hamilton, Ohio mill. Despite these reductions in U.S. capacity, Europe saw the addition of 500,000 metric tonnes per year capacity for UFS by Portucel. In spite of the new mill reaching full capacity by the end of the year, imports of UFS finished 2011 lower than 2010, down by 3% — though it is worth noting imports of UFS from Portugal increased 10%.

COATED FREE SHEET

Shipments of coated free sheet (CFS) decreased year-over-year two percent, while purchases decreased by eleven percent. CFS shipments decreased 2% compared to January 2011, to 317,200 tons.

As noted above, U.S. purchases of CFS decreased 11% compared to last January. The reason for the disparity between shipments and purchases is attributable to CFS imports in December 2011 dropping by 35% year-over-year. The decrease in imports was consistent across countries, led in tonnage declines by South Korea, which saw a decrease of 13,500 tons year-over-year — a decline of 41%.

CFS inventories increased 2% compared to December, up 9,600 tons.

COATED MECHANICAL

Coated mechanical (CM) shipments decreased five percent, which is the lowest year-over-year decrease since March 2011 when it increased. CM shipments decreased 5% compared to January 2011 to 281,800 tons.

Developments over the past year include the shut of the NewPage mill in Whiting, Wisconsin in February 2011, and the permanent shut of one paper machine at the Verso Paper mill in Bucksport, Maine.

U.S. purchases of CM decreased 5% compared to January 2011.

CM imports officially outperformed CM exports (-9% and -12%, respectively), but the volume of imports is significantly higher, thus resulting in a decline in U.S. purchases. Meanwhile, CM inventories remained essentially flat, increasing less than one percent, up just 600 tons from the prior month.

UNCOATED MECHANICAL

Uncoated mechanical (UM) shipments decreased by double-digit percentages for the eighth consecutive month, yet it is the lowest decrease in the stretch, only hitting ten percent by rounding. UM shipments decreased 10% when compared to January 2011, to 141,300 tons.

U.S. purchases of UM were down 21% when compared to January 2011, the largest year-over-year decline in purchases since July 2009. The cause of this drop is a decrease of UM imports by 9%, led by a 24% decline in imports from Canada in December 2011.

UM inventories were the only ones to decrease, down 2%, or 1,800 tons, from December.

The American Forest & Paper Association (www.afandpa.org) is the national trade association of the forest products industry, representing pulp, paper, packaging and wood products manufacturers, and forest landowners.

The forest products industry accounts for approximately 5 percent of the total U.S. manufacturing GDP. Industry companies produce about $175 billion in products annually and employ nearly 900,000 men and women, exceeding employment levels in the automotive, chemicals and plastics industries. The industry meets a payroll of approximately $50 billion annually and is among the top 10 manufacturing sector employers in 48 states.

SOURCE: AF&PA