Paper Market Update
Most paper markets are tight through October and November. Paper price increases are being implemented this month for most grades, including coated groundwood, uncoated freesheet and reply card, uncoated groundwood (SC, SNC, machine finished hi-brites) and newsprint. Pulp prices continue to rise, putting cost pressures on those paper mills that must purchase it. The U.S. dollar continues to weaken against the euro and Canadian dollar. The NORPAC petition for tariffs on Canadian newsprint and machine finish hi-brite producers selling into the U.S. has gained traction with the International Trade Commission and is now with the U.S. Department of Commerce to render its decision sometime in 2018.
Much has happened in the paper market since last month, including multiple capacity reductions. Producers in North America have announced price increases for Oct. 1 for coated groundwood (CGW), supercalendered (SC), newsprint, and machine finish (MF) groundwood grades. Norpac and Resolute are shutting more newsprint and uncoated groundwood (UGW) MF capacity. The July 1 coated price increases have been fully implemented, and indications are that the Oct. 1 increases will be as well. See the Industry Focus below for details.
After Resolute removed 200,000 tons of coated capacity at Catawba, the coated groundwood (CGW) market has tightened through November with order lead times extending out to 12 weeks. CGW Roto and lightweight #5 grades are exceptionally tight as the impact of Verso’s last CGW roto machine closure in December 2016 is realized. Coated freesheet is not as tight and paper is readily available. The uncoated freesheet market continues to show weakness, with operating rates lower than expected. The uncoated groundwood market is much weaker than the coated market, with European supercalendered (SC) imports gaining market share. The newsprint market is stable, with recent capacity removals boosting operating rates.
Download the complete Paper Market Update for August 2017