According to industry sources, June may be the end of the long-term downturn in the US paper industry, as prices from pulp to paper, paperboard, and other varieties are all strong and there are signs of an uptrend. However, coated paper and newsprint are the exceptions.
For many types of paper and board, the demand is not very strong, but when the price is nowhere to go, it can only choose to rise, and the factory's production cuts effectively control the inventory and ensure the balance of the market.
In the United States, the prices of commercial pulp, waste paper, cardboard, copy paper, and household paper are all rising.
Global prices are also rising, and the recent slight depreciation of the US dollar has given everyone a sense of relief. In the case of the euro’s 16-month high and the appreciation of the yen, the devaluation of the United States is beneficial to US exporters, especially the export of linerboard to Asia, which also imposes restrictions on imports, especially Imports of coated paper from Europe.
Matt Berlan, an analyst with Morgan Stanley Dean Witter, said that since the peak of 2000, many paper/cardboard varieties have rebounded from the bottom after a full year of decline. Due to the moderation of production capacity, factory closures, and production cuts, some varieties performed even better than expected.
"This spring, every week from the pulp, paper and packaging manufacturers announced the price increase," Berler said, "In order to ensure the current strength and durability of rising commodity prices, the continued economic recovery in 2002-2004 is a necessary condition. ."
In recent weeks, softwood pulp and hardwood pulp manufacturers all over the world have shown their firm attitude to increase long-term depressed prices. The major manufacturers, including Weyerhaeuser, IP, and Domtar Canada, all increased prices by 30-50 USD/metric ton in May and June. The United States, Georgia-Pacific Corporation (GP) has set a plan to raise the price of southern pulp in July.
Waste Paper As a benchmark, the price of old corrugated cartons (OCCs) rose rapidly. Domestically, East Coast prices rose by 5-10 U.S. dollars per short ton in May to about 25 U.S. dollars per short ton, and the West Bank prices rose by about 20 U.S. dollars per short ton to 50-55 U.S. dollars per short ton.
Due to the decline in the volume of OCC recycling, the significant increase in overseas demand has caused export prices to soar in the past few weeks. Some U.S. factories have already experienced supply shortages, because in the past they were always accustomed to using them.
OCC's export prices have continued to rise, and many export orders have exceeded the price of 110-120 US dollars / short ton.
The rise in OCC prices also led to the US remanufactured cardboard makers - they decided to raise prices by $50/tonne (9%) for folded cartons, cartons, paper tubes, and paper cores in mid-June.
Analysts said that the current price of recycled paperboard is about US$575/short ton. Europe has also already had a price increase plan.
The strength of the OCC market has also affected the mixed waste paper market. Some paperboard factories are buying large amounts of mixed waste paper as a partial replacement, leading to a sharp increase in the price of this product.
The price of the old newspaper (ONP) is relatively weak, which reflects the slump in the newsprint market. The price of No. 6 Ordinary ONP and No. 8 Deinking ONP was only moderately higher.
Boxboard paper In mid-June, about 8% of the price increase in the US market for vermicelli and corrugated paper was preceded by higher prices in the export market. Despite the unsatisfactory carton shipments in April, the increase in inventories, the reduction in production capacity and the temporary suspension of production prevented the prices from collapsing.
The increase in the price of boxboard in the United States is mostly in the lower limit of 30-50 dollars per metric ton. According to an analyst's report, the current price of kraft linerboard is between US$410-415/short ton.
Berler said that if the demand does not improve, then the June price increase plan may not be implemented, but overall, "in the upcoming wave bandboard paper will have a very good return."
There is a good signal that in the export markets in Asia, Europe and Mexico, most spot transactions have already accepted price increases. In these places, as a major manufacturer, the IP price increase ranged from US$25-35/short ton.
This week it was reported that the packaging giant US-based SMCC also plans to raise the price of corrugated boxes by 8% in the US from July.