Paper

Sliding pulp prices continue to weigh heavily on paper stock markets throughout the country. Over the past several months a host of pulp producers have announced plans to curtail pulp production. This, these producers hope, will reduce the supply and allow pulp producers to push through price increases for their finished product.

What do pulp markets have to do with paper stock grades? Everything, according to sources within the recycling industry.

The movement in price and demand for pulp typically gives direction to the high-end pulp substitute grades. With pulp prices sliding over the latter half of last year and so far this year, most pulp substitute grades have declined in price and demand.

With consumers of pulp seeing sharply reduced prices for their raw material, there is less inclination to use grades such as hard white envelopes, cuttings, shavings and other pre-consumer grades.

Through the end of last year, finding markets for many pulp substitute grades became so difficult that many handlers of the grade noted movement became practically impossible, even with sharply reduced prices.

The difficulties in pulp markets are also mirrored in the de-inking pulp industry. This segment of the paper industry has had a less-than-auspicious start since a wave of stand-alone de-inking plants opened in the mid-1990s.

Built on the expectations of surging demand for recycled-content printing and writing paper, these de-inking facilities were expected to soak up tremendous amounts of the office grades.

However, the roller coaster market for pulp has cast a long shadow over this segment of the business. A number of de-inking plants shuttered, leaving collectors of the grade with an oversupply of pulp on hand.

Eventually, several of these mills re-opened under new ownership and with an improved business plan. While some of these operations have been able to extricate themselves from difficult markets, the downturn over the past year has once again cast an unfavorable light on many of these operations.

(FibreMarketNews.com is an electronic publication covering the paperstock markets and paper recycling industry.)