Seeking Strength
The good news is that most paper stock grades have stabilized in price, with steady movement for most grades. The bad news is that there is no price strengthening in most grades, and the generation of material is down sharply from last year.
A problem grade lately has been old newspapers (ONP). There are a host of reasons for the slump in ONP markets. One of the biggest problems has been the collateral damage brought on by the Enron collapse. The company, which had been significantly growing its newsprint business through the acquisition of a number of newsprint mills, has idled one mill, and reportedly is selling off a significant amount of excess finished newsprint on the open market.
The move has reduced the overall operating rate at newsprint mills throughout North America. At the same time, markets early in the year are faced with large amounts of ONP generated during the end-of-year holiday season.
While prices and demand have dried up, mills continue to search for a bottom, with operating rates continuing to spiral downward.
Offshore business has picked up a bit, despite a recent hike in freight rates outbound from the U.S.
(Additional news on paper markets, including breaking news and pricing, is available at www.RecyclingToday.com.)