Upturn Being Seen for High Grades

Paper stock markets seem to be hitting their b ottom level. Most paper stock dealers sense that prices will not likely decline much further in the short term, although there doesn’t seem to be any drivers that could boost the prices

While the low grades may have hit their bottom, a number of paper stock dealers report that high grades, notably pulp substitutes, have been bouncing off their lows and are strengthening. There are some expectations that prices could continue to improve throughout the late summer and into fall.

Hard white envelope cuttings and shavings are seeing $10-$20 a ton improvements. One packer of the grade said that mills have been asking for more of the grade and are willing to pay the higher price.

Although prices have moved up, there still seems to be a relative scarcity of many of these high end grades. With the significant amount of downtime taken over the past several quarters, many paper stock dealers see less of the higher grades now available. Adding to this mindset, if there is any sharp increase in offshore orders, demand for the available tonnage could climb sharply.

There already are indications that some Asian mills are starting to take a keener interest in the grade. Whether or not this trickles down to other grades has yet to be seen.

However, there have been some improvements in demand and price for coated book stock, manifold and sorted white ledger, and various pulp sub grades.

While prices have firmed, and in some cases increased, many paper stock dealers note that prices for some of these grades have fallen so far that it will take a significant amount of time for prices to reach a level that will help bring in more tonnage.

A promising sign for the handlers of these high grades has been the demand from many of the domestic mills. Tissue mills and board mills are putting in larger orders. According to several paper stock dealers inventories at many mills have been reduced by enough that some mills are becoming slightly more aggressive with their orders.