<b>Mixed Paper Sees Big Decline</B>

The mixed paper market is following the downward trajectory being exhibited by old corrugated. Prices have been declining, exacerbated by a large decline in shipments to China. Exports to this region had been one of the biggest avenues for the grade during the first half of this year.

However, the abundant supply of fiber in China, as well as limited domestic outlets, has driven the price of the grade back down. Expectations are that prices could continue to soften throughout this summer as mills in North America look to reduce inventory.

One source on the East Coast notes that as a step to lessen the flow of mixed paper into China prices were cut by $20 a ton or more

In addition to the lack of orders into China, the Mexican market appears to be fairly quiet lately. The symptoms for the decline in Mexico are similar to ones being seen in the United States. Although there are pockets of decent movement, inventory levels are high enough that consumers are taking the opportunity to reduce their supplies.

Deinking grades also have been struggling as of late. Prices, although off significantly from earlier this year, are still showing signs of weakness. High inventories continue to plague the grade. Along with sluggish pricing, offshore movement to Korea is being hampered by container availability, as well as attempts by Korean mills to sit out the market and allow prices to decline even further.

Despite continued softening in the market, there are some who feel prices have fallen as low as they are likely to go, and prices should start stabilizing within the next several weeks.