<B>ONP Holding Firm</B>

Markets for old news continue to surprise many paper stock dealers. Strong domestic demand has helped keep prices for deinked news firm. Domestic and Canadian mills continue to purchase steady blocks of material, although a slowing export markets could put a damper on overall markets.

Several domestic mills on the West Coast are reportedly become much more aggressive for the grade, indicating a possible tightening market for the grade. On the West Coast several vendors report that mills are aggressively buying more of the grade. This has helped push price and demand for the grade to levels much higher than OCC.

The trend now appears to be one of a holding pattern. Prices may dip a bit, although there are signals that the price of the grade may come back a bit. One of the biggest factors for a possible slip could be the downward pressure seen with OCC.

Although the two are not natural substitutes, and in fact have been moving in opposite directions, there does appear to be some correlation between the two grades. With offshore orders easing back their demand for the grade there could be some downward pressure on ONP as Asian mills begin curtailing their orders for this grade.

The continued improvement in the grade  has helped keep the grade from falling into the extended slump seen with OCC. In fact, despite the strengthening price, there appears to be a growing enthusiasm that prices will maintain their present strength.

The trend toward stronger ONP markets seems to be holding up in most parts of the country. The Midwest, which has seen some of the most difficult markets for OCC, continues to report a fairly stable environment for ONP. The market has benefited from both the demand by some paper mills, as well as from insulators throughout the region.

In the eastern United States demand for ONP also is holding its own. Several vendors have been reporting of some mild pullback in the price due to a slowing export market. However, the demand from North America has been enough to soak up any possible excess inventory.

With the ability of the grade to hold up fairly well over the past several weeks there is some optimism that prices could start to climb during the first part of next year.

Mixed Markets Upbeat. Although the grade hasn’t shown as strong an upside as ONP, mixed paper seems to be moving at a steady clip. While in a traditional market mixed paper moves, to a degree, with OCC, lately mixed paper demand has held up fairly well, despite some serious slippage in OCC prices.

Prices have been creeping up over the past month, with some export orders dipping into the market. At the same time there are signs that more domestic operations are adding mixed paper to their raw material intake.

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November 2000
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