<B>Sorted White Ledger Near Term Future Uncertain</B>

It is clear that old corrugated containers are dropping throughout the country. The same can't be said for deinking grades. Indications from different people in different parts of the country show some significant uncertainty about the short term market. Despite some apprehension, longer term it appears the grade will likely start to see some strengthening possibly as the summer ends and fall rolls around.

Sorted white ledger is gaining more divergent opinions as the summer progresses. Comments from vendors on the West Coast seem to be of the opinion that prices have bounced off a price of around the $190 a ton level to around the $220 a ton level. The opinion of some is that the $220 level may be tough to break through, with prices possibly softening again this month.

Where the market is heading from here, however, is uncertain. Several packing operations on the West Coast feel prices will decline before they go further. They see limited offshore orders as a sign that prices may dip back down between $5-$10. Any slip in these grades will pull office pack down.

According to one West Coast exporter a large Korean consumer came into the market and bought some SWL and then pulled out, looking to push the market downward. This created a short term blip, but is not likely to be sustained this month.

Along with Korea, Indonesia, India and several other Asian countries are major buyers of the grade. If there is more of a move by buyers in these countries to pull more fiber there could be firming of the price.

Not everyone on the West Coast feels markets are heading downward. Recognizing the steep slide that took place the last several months, some vendors see more of a stabilizing effect in the market. Orders are coming in, albeit not to the level seen earlier in the year. Generation is down, with some packers opting not to sort out SWL from loads of office pack. This could result in further decreases in the amount of SWL available.

More optimistically, there are some signs that demand for the grade, as well as office pack, should strengthen later this year. In the Southwest there are a number of facilities that could be requiring more deinking grades of recovered fiber by later this year.

The Southwest is being driven heavily by the Mexican market. A number of people feel that with the recent elections and the strengthening economy of Mexico this country will continue to be a much larger player in the market for a number of paper stock grades, including office grades.

Activity in the eastern U.S. also is uncertain. Prices have been cut fairly significantly over the past several months. Sorted white ledger, along with office pack, coated book stock and a handful of other grades had seen the prices falter to under the $190 level. There is some signs of stabilizing, although there still is some room for the grades to move.