Paper

The sharp decline in sorted white ledger (SWL), office pack and coated book was very painful. Many paper stock dealers, however, say the decline is almost welcome news. The reason: prices had shot up so sharply that they were being priced out of the market.

Despite a sharp dip in recent weeks, there are expectations that prices are at or close to their bottom. Meanwhile, there are some possibilities that once a more stable pricing structure is established there could be a stronger pickup in orders.

The decline in prices for the grades comes while many pulp producers continue to push through higher prices for market pulp. The dichotomy between pulp substitutes and de-inking grades is perplexing to many.

While prices have dropped, a number of vendors say that consumers are becoming more choosy about the loads they are taking in. Anecdotal reports of higher rejection levels also are cropping up, leading to a greater supply of material available.

Prices for SWL are moving to the mills at around the $220 per ton level to domestic sources, with prices similar for offshore orders. The Mexican market, which helped drive prices earlier this year, also has eased out of the market. Speculation is that mills in the country decided to opt out of the market when prices climbed too high.

Korea also has been one of the biggest buyers of the grade in the Pacific Rim. Similar to other regions, when prices climbed too high, tissue mills in the country began curtailing their intake of the fiber.