Paper Market Update
The paper markets are tight through November, and with recent capacity shuts some markets are likely to stay that way.Paper mills are willing to shutter capacity and maintain pricing rather than to sell at a loss. The July and October coated price increases have been implemented; while SC, uncoated freesheet (UFS), and newsprint increases are being implemented now and over the coming months. The Appleton and West Linn coated freesheet (CFS) closures in October have removed 15% of market capacity, immediately tightening supply. Watch for the decision in 2018 for U.S. tariffs on Canadian newsprint and machine finish grades, potentially causing high market volatility. Meanwhile, pulp prices have risen to unprecedented levels.
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.