Coated Freesheet Recovery Showing Signs of Age, But Cost Pressures and Capacity Reductions Help Sustain Mill Gains

Feed: 86 - Date: 12/24/2011 - Views: 1,495

Coated freesheet markets regained a lot of lost ground in 2010 as demand, buoyed
by stock rebuilding, rebounded strongly. In turn, operating rates rose strongly and
drove major price gains. Demand cooled in early 2011 demonstrating that while
markets are much improved they continue to face challenges derived from shifts in
underlying demand and a sluggish economy.

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I n step with a surging recovery last year in almost all major pulp, paper and paperboard markets, coated freesheet papers staged a solid rebound from the precipitous downturn that the industry endured for almost two years that ended in 2009. For most of last year coated freesheet volumes rose significantly as did prices, and these
gains resulted in much improved mill economics. However, economic growth continues to be erratic which
makes it difficult to gauge the strength of the recovery in paper demand this year and its sustainability. Modest overall
growth in key areas such as retail spending continues, but it’s offset by extremely slow recoveries in housing and
employment. Cost input pressures — energy, fiber — also
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