Paper Market Update

April 2017

Newsprint shipments down, enhanced by publisher inventory reductions. Expect the newsprint decline to stabilize when inventories are depleted and as recent capacity closures are implemented (Kruger and RFP). RISI is predicting mill cost inflation for all grades in H2 2017 and 2018, causing mill closures and stronger markets in 2018. Shipments of supercalendered paper are down 26% YTD. Sappi’s converting a coated freesheet machine to packaging grades in 2018.

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March 2017

No real changes this month…the coated paper markets are weak and paper is readily available. Uncoated freesheet operating rates are stable at low 90% range. The market for supercalendered grades has softened with increased pressures from coated groundwood availability. Newsprint continues its decline; however, newsprint shipments to commercial printers, which represents 30% of total newsprint demand in North America…were up 9.2% yr/yr in January.

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February 2017

Newsprint capacity reductions/conversions are supporting a stable newsprint market. Supercalendered (SC) grade tariff reductions and currency exchange have contributed to weakening in the uncoated groundwood market. The uncoated freesheet offset market is stable as it is less impacted by the increase in sheet-fed imports into the U.S. The coated paper markets have weakened and mill inventories have risen; however, pricing is holding firm as recent capacity adjustments have been implemented.

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January 2017

The coated market is slow this time of year, but producers are building inventory to avoid downtime. Verso’s Androscoggin mill closure and grade conversions will contribute to preventing a loose coated groundwood market in Q1. No real changes in the uncoated freesheet (UFS) markets this month as demand numbers were somewhat weak as expected for this time of year. Demand for UFS fell almost 4% for 2016. Uncoated groundwood demand fell by 6% in 2016, led by a decline of 10% in directory grades. Some mills produced high-bright uncoated grades in place of SC. The newsprint market is firm for Q1.

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December 2016

The coated paper markets are past the busy season crunch; however, the coated groundwood market remains strong as Verso shutters a 220,000 ton/year machine at the end of December. Uncoated freesheet grades are readily available as operating rates remain slightly below year ago levels. The supercalendered paper markets remained strong through November, but increased imports from UPM to compensate for their closure of the Madison mill are competing for market share. Kruger will eliminate 227,000 tonnes/year in February when they convert newsprint to containerboard production at Trois Rivieres.

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November 2016

The SCA and coated groundwood (CGW) markets are both very tight due to busy season and multiple underperforming mills as well as low inventories and capacity reductions for SC grades (Madison). Coated freesheet (CFS) is not as tight, but does not suffer from large excess supply and therefore pricing is more stable. The uncoated freesheet (UFS) market seems to have peaked and is now weakening and seeing a rise in offshore imports. The newsprint market is firm and pricing is stable.

Download the complete Paper Market Update for November 2016