Paper

Reschedule The Rally

Paper stock markets continue to bear bad news. The hoped-for spring rally looks like a dud. Many vendors are now picking the third quarter of the year as the time when markets for many hard-hit paper stock grades will start to turn.

While late summer/early fall is when more paper stock dealers see a turnaround, many of these forecasts are predicated on a strengthening of the overall U.S. economy.

The toughest market appears to be for pulp substitutes and de-inking grades. There continue to be reports of Asian mills selling pulp on the open market for such drastically reduced prices that pulp subs and de-inking grades are being sharply discounted.

Vendors relying on the Asian market to move sorted white ledger (SWL) are reporting a sharp drop in the demand. The result is typical, with prices for some paper stock dealers dropping between $20 to $30 per ton in March.

The outlook for April is also murky, with some sources reporting shipments to Korea re-emerging at that time. However, there are more than a few handlers of the grade who see continued difficulties with many of these grades as long as pulp prices continue to slide.

The domestic market doesn’t appear to be much help for many dealers. Slowing demand and high inventories are creating difficult conditions for many handlers of de-inking grades.