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Paper Shipments Down, Prices Could Start Falling Next Quarter

However, be prepared for prices to bounce back in second half 2011.



Matt Kinsman By Matt Kinsman
11/30/2010

Total U.S. printing/writing paper shipments fell 3.2 percent from September to October and are down 4 percent compared to October 2009, according to preliminary data from the American Forest & Paper Association.

Uncoated freesheet shipments fell 7.8 percent to 706,600 tons in October, compared to a year earlier. Shipments of coated freesheets (337,800 tons) rose 3.5 percent over October 2009 but fell compared to September 2010.

"This is the weakest-year-to-year comparison of 2010" Deutsche Bank analyst Marke Wilde told RISI. Considering that October 2009 was still a relatively easy comp, this is a disappointing number."

Wilde also told RISI that further volume declines could trigger price erosion, and RISI says it has already detected lower uncoated freesheet prices in North America and Europe.

In the October issue of FOLIO: Magazine, Dan Walsh, vice president of publication papers for Bradner Smith & Company, predicted paper prices falling in the first part of 2011, but rebounding in the second half. "For at least the first half of 2011, look for paper prices to retreat and supply to become more readily available," Walsh said. "But with domestic mills continuing to show the resolve to extinguish more supply, paper prices could again be on the rise by next summer."

Matt Kinsman By Matt Kinsman
11/30/2010







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