Mr. Dave Hillman

GLG News by Mr. Dave Hillman, Independent Consultant

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Suzano Speeds Up Construction of New BEK Market Pulp Mill

March 3, 2011

Suzano, an integrated pulp and paper producer has entered into finalized agreements with Metso and Siemens for key pieces of equipment for their proposed new mill at Maranhao. This will be a 1.5million mt/year facility due to begin operations in late April, 2013 and to cost US$2.3 million. It will also produce 100 MW surplus energy for sale to the local grid. The most appropriate end use will be for the top layer on Ultra Facial Tissue...which is produced globally.

Mercer Considers Producing Dissolving Pulp at 2 Mills-easier said then done!

February 25, 2011

With cotton prices near $2/lb the demand for rayon is unprecedented. No one anticipated the rapid escalation in prices and those producers with uncommitted tonnage have been getting as much as $2450/mt on the spot market.Mercer wants to shift part of their NBSK tonnage at Celgar (BC) and Stendahl (Germany) to produce rayon grade (Alpha cellulose content of 94-95). This will require much harder cooking and causticizing to wash out the 5 carbon hemi-cellulose polymers (unwanted by customers).

China's Containerboard Industry Continues To Grow and Grow and Grow

February 14, 2011

Nine Dragons Paper (Holdings) began in 1995, is the largest packaging paperboard producer in Asia and one of the largest in the world. The have now started up two new machines in Jiangsu Province, a 3-ply linerboard machine and one for corrugating medium These machines 285" and LIner as heavy as 175 gsm can be produced. The furnish will be predominantly OCC purchased from the US, Japan and Western Europe. Both machines started up at high speed with product on the wire in only 5 hours.

Newsprint's Cash Costs - The Connection With Housing Starts

January 31, 2011

Newsprint mills have traditionally relied on sawmill residuals (chips) from nearby saw mills producing dimension lumber for industrial and residential construction. In 2006/07 housing boomed and saw mills were all operating at 100% capacity with 2 x 4s selling for $375 thousand board feet. Distributors' warehouses filled up as housing starts plummeted. Saw mills began to shut down as prices tumbled to $150/mbf. Now paper mills now must do their own logging (manpower) and chippping (energy).

Rock-Tenn Buying Smurfit-Stone: what a huge chunk to digest!

January 25, 2011

Smurfit-Stone had 14 pulp and paper mills (2 in Canada) at this time last year and 124 box plants. They had, since 2006 closed 26 others. The US market has far too many box plants with some running only at 33% capacity, others at only 50-60%. A couple of the pulp mills are small but for the most part the 14 mills are good sized and versatile. The carton business will grow as the US economy improves but we still have too many box plants. IP had more than 60 and then acquired Weyco's 83.

Nine Dragons, Lee&Man Expansions: A Valuable Leading Indicator?

January 17, 2011

China expects to start up 5.3 million mt/year in 2011, 880,000 mt in the 1Q out of a total 6.6 million buildup for all of Asia....this according to a RISI economist. Nine Dragons will start up 2 new board machines - 700,000mt/year. This expansion will continue to put upward pressure on OCC purchases and prices ( up $15/mt from Nov/Dec) . 64% of all US exports went to China. Obviously future demand (export plus domestic) justifies this. Beijing wants to see domestic demand above 30%.

Rayonier Drops Fluff Pulp In Favor of Specialty Dissolving Pulps

January 17, 2011

This is as strategic move that will substantially effect their P&L. Replacing $950-1040/admt Fluff with $1500-2200/admt high purity (high Alpha) specialty dissolving pulp is painfull for Rayonier's Fluff Pulp customers but a boon to their hard-pressed dissolving pulp customers who have been on strict allocation for two years.Now, will Buckeye follow suit with this same strategy? Time will tell.Most of the other DP mills are producing lower Alpha commodity pulps for rayon.

Thermal Imaging: Koehler's "on/off again" US mill is now back burner

January 6, 2011

Koehler is the world's largest Thermal Imaging paper producer and ships 45-50,000mt annually to the US where they are #2 to Appleton. In 2007 it was rumored they would buy the shut Kimberly, WI mill. Next they considered buying base stock and coating it. Then they considered a greenfield pulp/paper mill in SC. Now that has been postponed. Prices increased 3 times in 2010 and will likely go up again this month. Prices are 9% higher than a year ago. Shipping costs must be absorbed.

Commodity Paper Prices Are Up-And-Down

December 28, 2010

Containerboard is in good balance and an early-2011 price increase is likely. 2010 saw 2 prices increases in January and April but then box makers got a respite.Newsprint prices are up to the break-even/small profit area but future price increases may be hard to come by since there is so much overcapacity.NewPage has had to rescind its announced $20-50/st Jan.price increase on both Uncoated and Coated Freesheet grades.CRB and URB producers had announced 4Q increases but must now wait until Jan.

No Surprise: OCC Prices May Go Higher

December 15, 2010

China, India and Mexico have been the 3 largest export markets. Recent prices are $279/mt delivered to south China ports. Now 5.3 million tons of new containerboard capacity in China will be starting up in 2011. 80-90% will be recycled fiber with 20% expected to come from the US. This equates to a 200,000 increase in demand from US collectors. An additional 1.3 million mt of containerboard will be starting up in India, Viet Nam and Malaysia. US supplies are reduced due to recession.

Hardwood Prices Soften As Inventories Soar

December 10, 2010

Fibria dropped BEK list by $20/admt in Europe (to $850) and $50/admt in China ($820/admt) while delivered prices to US buyers remained unchanged. Inventories surged by 5 days-of-supply causing most buyers to increase pressure on suppliers for lower prices. By contrast softwood prices (i.e.NBSK) remained firm as global demand continues to show strength and inventories stable. Many observers believe this is a temporary situation with 2011 gaining strength with prices rising.

Market Pulp Prices To Remain Stable

December 2, 2010

Softwood will be in tight supply...probably through 2011. In March the former Alabama River Mill now owned by GP will begin producing Fluff Pulp on #2 dryer (1500 mt/day) which will further reduce SBSK supplies. IP is already shipping significant tonnage to IP/Sun Paper it's jv in China. Likewise demand for Hardwood is picking up so there should be no reason for those prices to decline. Acetate Dissolving Pulp demand continues to outstrip supply and $1500/admt is forecast for Jan. 1st.

Newsprint: it's demise was grossly exaggerated!

November 29, 2010

Prices have stabilized and there is better parity between East and West Coasts at around US$640/mt in the East and $625/mt in the West for the most popular 30# grade. Order books are full and publishers appear comfortable with these prices. Supply has diminished sharply with a number of mill/papermachine closures since 2008. . The big difference has been the revived export market with one tonne being exported for every two tonnes shipped to North American publishers.

OCC Prices Continue To Climb - What Are The Drivers?

November 17, 2010

OCC (old corrugated cartons) is in great demand in China because of all the new board machines which have been installed by Nine Dragons, Lee & Man and Chenming Shandong (among others). Prices are now as high as $290/mt delivered to a Chinese port and expected to reach $300/mt by year end. India and Mexico are two other major markets for US OCC.US recovery rate is at an impressive 81%.Domestic URB and CRB mills all have 3 week backlogs and have contracts for OCC generated by big box stores.

Surprise! Indonesian Market Pulp Mill Starts Up With No Fanfare

November 17, 2010

Kertas Nusantera restarted its idled mill last week with unbleached hardwood (acacia and/or eucalyptus) which it will make for 3-4 weeks before making fully bleached pulp. The mill's design capacity is 585,000mt/year which may make a slopply Asian hardwood market even sloppier. The mill had been idle for a year and no notice was given of its intended start up. Wood supply (chips) are supposedly not a problem for the mill...although this has generally been a problem for some other mills.

Bellweather UFS Shipments & Prices Decline In October

November 1, 2010

UFS, primarily cut-size copybond and offset printing paper, saw September shipments decline to 782,000, an average of 6% decline from August. Imports from Portugal, Mexico, Indonesia and China amounted to 681,000 an 11% increase from August. Buyers are exhibiting less and less brand loyalty. A decade ago UFS shipments totaled 1 million tons/month.Prices sagged $20/st. Envelope was an exception as buyers reported tight supplies and lean inventories. Thermal Imaging papers also were strong.

GP Decides On Louisiana and Arkansas For Next Generation Premium Tissue Machines

October 27, 2010

GP had four choices: Port Hudson, LA, Crossett, Arkansas, Palatka, FL or the former Alabama River mill in Claiborne, AL. Port Hudson and Crossett were chosen - both are fully integrated mills. The new machines will be GP-developed premium facial tissue machines resembling the TAD concept. These machines will consume less energy, have increased output as well as greater softness and absorbency. The total cost of the project is $550 million

Weak Dollar Motivates Koehler To Move Thermal Imaging Production To US

October 26, 2010

Thermal Imaging papers are growing at the rate of 6-7%/year. Koehler is Europe's biggest with 3 German papermills. They are #2 in N.A. after Appleton. Kanzaki is #3. They considered the shuttered Kimberly,WI mill then decided instead on an integrated mill in SC which could reduce their pulp costs. In 2008 this plan was postponed. Now the combination of transportation costs plus the weak dollar has motivated them to again consider this move - perhaps within the next few weeks.

NBSK Market Pulp Prices Stabilize in October

October 25, 2010

Since July NBSK has fallen $70/admt to a list of $970/admt although spot prices are considerably below that. Inventories rose a total of 9 days of supply from July through Sept. but now have turned around and fallen 2 days to 32 from 34 days. Consequently two major producers said they do not intend any price reductions this month. Shipments of Softwood to Europe, North America and China are remaining quite robust while Hardwood is suffering a decline in China due to new domesticproduction

Pulp Prices Continue To Slide As Orders Sag

October 19, 2010

Traditionally the 3Q is the slowest of the year, the 4Q the best. Inventories have to be rebuilt after the summer shut downs. 2010 was no different except Chinese buyers decided to steeply draw down their inventories so they could stop buying and force pulp suppliers to drastically reduce prices (i.e. $100-200/admt). This plan didn't work. Prices did slide from a high of $1040/admt down to $990 and now, lately, to $970/admt. More pulp mills have had to drop to stay competitive.

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