Most paper prices remain relatively stable despite falling demand, this due to shuts, consolidation and conversions to other grades by paper producers. Further declines in coated paper prices have been staved off by the closure of Verso’s Luke CFS mill. Overall demand for U.S. printing and writing grades of paper are down 4% YTD. Newsprint demand is down 16% YTD in the U.S. Most paper grades are readily available with normal lead times. Look for further mill closures and/or temporary shuts for balance.
Verso Corporation permanently closed its paper mill in Luke, Maryland, in late May. The closure eliminates 675 jobs and will affect nearly 2,000 others employed by other businesses in the local area, according to state estimates and union officials. (Public Domain)
Mexico’s economy would likely see recession if President Trump follows through on a threat to impose tariffs on Mexican exports to US, according to a poll of market analysts. Meanwhile, the peso has dropped 2.5% versus the U.S. dollar since the tariff threat. (Reuters)
The Forest Stewardship Council (FSC®) formally released its new National Forest Stewardship Standard for Canada. Forest Products Association of Canada (FPAC) embraces third party certification and participated in FSC’s consultation process which was used to develop the new requirements. This announcement marks the end of FSC’s multi-year consultation process with a number of key partners. (Press Release)
Paper-based electrical gas sensors can be incorporated into packaging and detect spoilage gases in meat and fish, according to a recent university release from scientists at Imperial College London. Consumers would be able to use smartphones to read data on the sensor.
Verso’s Luke CFS mill closed last month, removing approximately 450,000 tons/year of coated freesheet grade paper from the North American market…firming up the CFS segment for 2019.
Wood pulp prices Wood pulp prices decreased another $35/tonne in May, and have decreased 9% ytd in 2019.
Publishers, both new and established, are investing in print magazine launches, citing that the print format is great for compelling storytelling around something that people are very passionate about.
Paper Grade Review
Coated grades – CFS producers could seek a Q3 price hike post Verso Luke closure, but it’s unlikely as prices have already reached an 11 year high. CGW prices, on the other hand, have fallen slightly and we look for CGW producers to continue to remove excess supply in the coming year. Coated supply is readily available in most grades, with normal mill order lead times.
Uncoated freesheet grades (UFS) – As expected, we see increased imports of UFS grades into the U.S. to compensate for the GP closure. UFS demand is down moderately (3% YTD), and paper is readily available in most cases. According to RISI, competition from imports and lower pulp costs should keep UFS prices at bay for the remainder of 2019. The IP Selma UFS conversion to linerboard in 1H-2020 will boost the UFS market operating rates next year.
Uncoated groundwood grades (UGW including SC) – UGW demand remains weak for most grades, and has dropped by 9% YTD in total. Expect the SC segment to remain relatively stable, while machine finish higher bright grades decline further now that newsprint prices are falling. Look for further capacity removal by producers and stable prices.
Newsprint grades – Demand for newsprint is “cratering” and offshore exports have become “stagnant”, according to Reel Time reports. Newsprint markets are weak, and prices are facing downward pressure. According to RISI, weak operating rates and falling prices “suggests that another capacity closure may be imminent” by newsprint producers in North America.
Ink on Paper
Myth: Electronic communication is more environmentally friendly than paper-based communication
Fact: Electronic communication also has environmental impacts. In 2015, there were 2.6 billion email users worldwide and the number of emails sent and received per day totaled over 205 billion. Worldwide, total CO2 generated by emails is between 22 million and 4 billion metric tons of CO2 per year, equivalent to the amount of CO2 produced annually by 4.68 million to 854 million cars. (Radicati Group, 2015)
For further information, visit Two Sides at www.twosidesna.org