<B>Deinking Grades Improving</B>

What's This? Markets turning for deinking grades? It may be too early to rejoice over any strong upward swing in the demand from buyers of deinking grades. However, preliminary reports are filtering in that there are some apparent signs of greater interest on the part of buyers for many deinking grades.

Asia, Europe and Mexico are all reportedly more aggressive activity for many of these grades. While orders have not been coming in to the level to help swing prices dramatically, there is a sense that some mills outside the United States are starting to become more acutely aware of the need to build up inventories.

The Mexican market could be one of the bigger drivers of this most recent uptick. There have been reports of one Mexican mill, Ponderosa of Mexico, coming back into the market after being closed for several months. This could help spur stronger orders from the Southwest, as well as parts of California.

Other Mexican buyers appear poised to place bigger orders. This could help firm up the overall market in this region. Large orders are being looked for in some areas, which is leading to a relatively upbeat mood for handlers of sorted white ledger, coated book stock and white ledger grades. Several packers note that the larger buyers of deinked grades in Mexico are looking to place larger orders.

The possibility of improved orders into Mexico, as well as continued growth in the Asian and European market, could help soak up some excess material. At the same time, domestic consumers may start to buy more aggressively to ensure they have enough, in turn, could help turn more domestic buyers

The mood change follows a sharp drop in orders into Mexico earlier this year.

It is expected that prices have fallen as far as they are likely to dip in the near future. From this position some vendors feel prices will start to turn around. The expectations are that prices will at the worst hold firm, while more optimistic people feel that a turnaround in prices could start taking place in September.