Paper Department

High on High Grades

Paper stock markets are surging moving into the last quarter of the year. Grades toward the top of the paper stock spectrum, notably pulp substitutes, have been climbing in $20 per ton increments. The strength is being driven by greatly improved market pulp prices.

Hard white shavings, hard white cuttings and unprinted bleach board (SBS) grades all have seen the positive signs of better pulp prices translate into stronger demand from end buyers. Improved market pulp prices also have helped boost prices for deinked pulp, resulting in better prices for the grade, as well as an increase in demand for the raw material to make the product.

The strength at the top has been helping push markets for many deinking grades to higher levels. One of the biggest beneficiaries has been sorted white ledger. The grade had been moving for close to $100 per ton early this year. However, lately prices for the grade are topping the $200 per ton level. A promising sign for the grade has been the depth of the demand.  Offshore buying has been strong, with some sentiment that buying by some Asian mills is in anticipation of possible inventory problems arising due to Y2K concerns.

While offshore buying has been slightly better, domestic demand has also been picking up throughout the country. Several domestic tissue mills have become much more active for SWL and coated book, which has helped push the grades.

Markets also are seeing better demand from Mexican sources. A number of mills in that country are increasing their  price to obtain the required fiber intake. Deinking grades are one of the biggest beneficiaries of this increased market.

Improved SWL markets are also translating into better demand and prices for various grades of office pack. Demand is pushing mill prices for the grade to more than $100 per ton. There are also expectations that prices for the grade will continue to strengthen through the rest of the year.

Along with tissue mills, a number of traditional paper and paperboard mills are purchasing more of the grade, leading to better than expected prices for the grade. The upward movement is creating some concern on the part of paper stock dealers, who are seeing escalating prices create a bidding war for the material.

(Fibre Market News is a bi-weekly publication covering the paper stock markets and paper recycling industry.)