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.

Containerboard Prices Increase $60/st in August

July 7, 2010

The four basic grades of containerboard are (1) Liner, (2) corrugating medium,(3)test liner and (4) white top. Georgia Pacific and Rock-Tenn have announced $60/st price increases for August. It would be logical to think that IP, SSCC, Temple-Inland, PCA and Norampac will soon announce a similar increases.Containerboard goes primarily into corrugated cartons which are a leading indicator of business activity. Raising prices indicates a strong order backlog at the paper mills.

A possible pulp price decrease? The pro's and con's.

June 28, 2010

Inventories have increased by 2 days and the summer "doldrums" when European paper mills traditionally shut down will soon be upon us. Inventories in Asia are supposedly on the high side. This has caused some to say prices will slide by as much as $100/admt.However, there are some valid arguments to the contrary. US pulp producers are still sold out with no customers canceling or delaying orders.Also, only one greenfield pulp mill in under construction.Demand historically goes up 5%/year.

US Tissue/Toweling Continues Rapid Expansion

June 16, 2010

Unlike Newsprint, Uncoated FreeSheet and Coated Freesheet, the tissue and toweling business continues a broad based, countrywide expansion. Premium facial tissue continues to grow in popularity and usage. New machines have been announced by P&G, Clearwater (formly Potlatch),First Quality, Empire (NY)Tissue, GP and now the new owners of the Gorham N.H. mill. Second generation TAD machines is everyone's first choice.

Will China's Closure of Its Pulp Mills Buoy Pulp Prices?

June 8, 2010

To reverse a distressing backward move in its nation's pollution reduction drive, the Chinese government has announced the closure of 4 million tons of pulp making capacity as announced in last week's NYT.. These are older, smaller (mostly straw pulp) mills known for their polluting of rivers and lakes with their process effluent. Some paper mills in the same category will also be closed.The result will be increased purchases of (especially hardwood) market pulp from traditional suppliers.

A Shocker! GP Buys Alabama River Pulp

June 4, 2010

GP has negotiated the purchase of 100% of Alabama River's mill at Claiborne, AL effective August. This is a major move by GP in purchasing a 3000 mt/day pulp mill that is already rebuilding one pulp dryer line to produce Fluff Pulp in reels.It has been conjectured but not confirmed that GP's next step will be to install one and possibly two new TAD tissue/toweling machines at this location.When completed the new Fluff Pulp dryer should make GP #1 for this grade.

AfH Tissue Capacity Booms In The SouthEast

May 25, 2010

First it was Cellyenne announcement to build a deinking plant to supply their second tissue/toweling machine with recycled fiber. Then, Clearwater announced plans to build a 200" TAD machine somewhere in the SE (Tennessee has been mentioned as a possible site) to produce 70,000 tpy. Shortly prior to that First Quality announced plans to build two TAD machines in Anderson, SC which will produce 140,000 tons/year when the 2nd machine starts up in 2013.

Abitibi Shuts 600,000mt/year Newsprint Capacity - Is It Enough?

May 25, 2010

Gatineau 2 machines will be indefinitely shut idling 310,000mt/year of newspring and 50,000 of uncoated mechanical papers.Earlier Coosa Pines, AL (319,000mt/yr) has switched from newsprint to unbleached packaging papers.Calhoun, TN which has been producing newsprint (205,000mt/year) will now be producing unbleached mechanical grades half the time....effectively removing 100,000+ tons of newsprint from the market.A $25/mt price increase is slated for June. Current price is $595/mt in the east.

Despite Weak Euro Pulp Prices Still Increase

May 18, 2010

North American pulp producers' list for NBSK is now at $1000/admt level. Sodra (3rd largest market pulp producer) announced $20 June increase making it's NBSK list $980/admt c.i.f. BEK will go up another $30/admt since inventories are at record lows. Chile's losses from the earthquake now expected to hit 1 million tons.Prices may peak in July and then slide downward the rest of the year some observers have suggested. Days of supply slid another 2 days in April.

Falling Euro May Hinder Further Pulp Price Increases

May 17, 2010

Market Pulp prices have increased 12 of the last 13 months. Some producers had intimated there might be another ($20-25/admt) increase in June. All market pulp is sold in US dollars. The Euro falling to $1.23 significantly raises the transaction cost for all buyers in those Euro denominated countries. US producers are major suppliers of Fluff Pulp and many specialty grades (dissolving, mercerized, cellulose derivative chemicals).

ERRATA: Neenah Posted 1Q PROFIT Not a Loss

May 14, 2010

Analysis of:Neenah Paper Swings To First Quarter Profit | www.paperage.com

Examining the 1Q results of 10 paper companies, the loss of one of the other 9 was erroneosly attributed to Neenah. This is most unfortunate since Neenah actually swung to a profit of $16 million compared to a loss a year earlier. Management can be proud of this achievement in light of the losses posted by so many others.

Ten Paper Companies Post 1Q Losses - What's Wrong?

May 12, 2010

Within a short period of time the following announced 1Q losses: Neenah Paper, NewPage, Verso Paper, Kapstone Paper & Packaging, Glatfelter, Clearwater, Boise, Int'l Paper and Catalyst. And...NewarK Group to file for prepackaged bankruptcy. Does this indicate an underlying weakness throughout the entire North American Paper Industry?

Major New Market Pulp Mills Announced In Brazil And Russia

May 10, 2010

Today's global pulp market is extremely tight with prices approaching $1000/admt.Five new kraft pulp mills have been announced in Brazil and Russia with start ups scheduled for 2012, 13 and 14.Before then new world class paper machines will start up further tightening an already oversold market. These new pulp mills cannot come on stream too soon.

Gunns-Tasmania's market pulpmill progresses toward becoming a reality

May 5, 2010

Gunns has been Tasmania's major forest products company for the past 30+ years. They have extensive Eucalyptus plantations producing chips which have been exported to pulp mills in the Pacific Rim.Gunns wishes to build a world class market pulp in the northern deep water port of Bell Bay where the pulp could be shipped to Far East customers. Paper mill owners in these countries have welcomed this news since global demand is expected to increase by 5%/year. 2.2 million tons is needed.

Chile's Market Pulp Tonnage Ramps Up After Earthquake

April 16, 2010

A devastating earthquake whose epicenter was close to all of Chile's market pulp effectively shut down all the mills. Fortunately half the tonnage has since been restored.This eliminated 8.8% of the world's market pulp BEK and Radiata Pine supplies.Arauco and CMPC declared "force majeure" and customers were thrown into a panic.This set off a round of price increases which reached as high as $60/admt.$1000/mt pulp which was unthinkable a year ago is now within sight.

$1000 Pulp Stimulates New Brazilian Pulp Mill

April 15, 2010

With market pulp at its highest prices since 1995 it was only a matter of time before new mill construction projects were announced.A new company, Eldorado Celulose e Papel Ltda will be owners. The word "paper" in its name may indicate this could be an integrated mill.The project is estimated to cost US$1.7 billion and will be located in Mato Grosso do Sul.

Chilean Pulp Mill Closures To Be Felt In Many Sectors

March 23, 2010

Chile produces 8.8% of the world's papergrade market pulp - about 4 million mt/year.All six market pulp mills are now shut down for at least 30 days and maybe longer.Full production may not resume until late summer because of damage to the infrastructure. Railroads, highways, the deep water Ports and energy producers have all suffered damage.The entire inventory of bleached and unbleached pulps awaiting shipment was destroyed.Arauco and CMPC have both declared "force majeure".

SONOCO'S PRICE HIKE ON URB TO EFFECT EVERYONE

March 23, 2010

Sonoco is the major producer of cores and tubes used for everything from bath tissue to paper towels to film, carpets, paper, thread and fabric.These products are made from Unbleached Recycled Board (URB).Prices are to index upward by $60/st effective April 5th.The company will also raise prices 5.5% on all industrial converted products.

Excellent use for wheat straw-Cellulosic ethanol

March 5, 2010

Analysis of:Canada's Ethanol Boom, Minus The Boom | theglobeandmail.com

Canada harvests an enormous amount of wheat each year but must dispose of the straw. Using it to produce a papermaking pulp is not a viable option since the high silica content produces "shiners" in the paper (i.e. "twinkling stars"). Added to this problem is the fact that wheat straw produces very poor quality papermaking pulp and today's newer/high speed machines will not tolerate it.

China's Demand May Outstrip Supply Of OCC, ONP & SOP

February 15, 2010

Analysis of:World Recovered Paper Useage To Surge By 2014 | www.paperage.com

Rising prices for virgin fiber and lack of availability is causing more mills to increase their use of recovered fiber in containerboard grades (OCC), newsprint(ONP) and tissue and towelling (SOP). Demand may reach 50 million mt by 2014.Supply must increase if this greater demand is to be met. This means the recovery rate (especially in China) and all industrialized nations must achieve higher numbers.Newer companies with broad based collection systems will very likely be needed.

CHINA'S PULP PURCHASES REACHE 13.68 MILLION MT IN 2009.

February 12, 2010

Analysis of:PULP IMPORTS TO CHINA UP SLIGHTLY IN DECEMBER | www.paperage.com

China purchased a record breaking one million mt of market pulp in December. An increase of 40,000mt compared to November 2009. This is a disproportionate share of the world's 47 million mt of paper grade market pulps!For 2009 pulp purchases increased 44% vs. 2008.Newly installed paper and board machines are likely to consume even more in 2010.China also imported 310,000 tons of paper and paperboard in December

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