<B>Old News Holding its Own</B>

The old news market is in a bit of a contradiction. While OCC has been falling sharply, the ONP market is showing a less dramatic decline. In fact, while most vendors report OCC backing up throughout the country, the old news market seems to be in fairly good demand, both domestically and overseas.

Prices are expected to dip slightly this month, although the decline is only minimal. Some paper stock dealers report prices possibly dropping by $5 a month, although both No. 8 news and No. 6 news both holding up fairly well during the summer slowdown.

Part of the reason has been the relative strength of the North American newsprint market. With the newsprint industry gearing up for a finished product price increase next month inventory levels have been corrected to a better degree than the board industry. Also helping conditions has been the smaller number of large newsprint producers. In North America, a handful of companies control a major portion of the market. Through mergers and acquisitions companies such as Abitibi-Consolidated and Bowater have been able to do a better job of reducing the available supply.

There have been several reports of some shortages cropping up. One of the reasons is seasonal. During the summer generation of supply decreases as more people take vacations. The drop in generation has allowed handlers of the grade to keep the material

Another benefit to the newsprint market has been the relative strength of the offshore market. Demand for the grade, especially to Korea, has been enough to prevent any oversupply of cropping up in the United States.