Coated Groundwood, Coated Free Sheet Prices Flat in December

Dec. 29, 2010 - In December, No. 5, 40-lb offset roll list prices for coated groundwood were flat at $795-875/ton on a month/month basis, according to analysts at Deutsche Bank (DB) who cover the paper and forest products sector.

The big news last week was UPM's agreement to acquire Myllykoski. The much-anticipated move helps consolidate the European publishing papers market, DB noted.

NewPage's recent announcement to close its 250,000 tpy LWC (light weight coated) mill in Whiting, Wisconsin by late-February failed to save a January $20-50/ton hike attempt, and NewPage was forced to rescind the move, DB said in an industry report.

Preliminary November shipments of coated groundwood were essentially flat year/year, down 0.6% y/y. On a YTD basis, shipments are +12.2% y/y.

Coated Free Sheet
Coated free sheet (CFS) list prices in December were flat on a m/m basis. Preliminary November shipments were +2.9% y/y (+17.7% YTD). DB pointed out that this year-over-year increase was the smallest since December 2009.

CFS Becoming Center of a Global Trade War
Following an earlier U.S. move, the European Commission imposed provisional antidumping duties of 39.1% on imports of coated fine paper from China (excludes APP), DB said.

"Brazilian producers are making similar claims as well," added Mark Wilde, senior analyst at DB. "All of this suggests the oversupply situation for Chinese producers will get even uglier.

SOURCE: Deutsche Bank