Mr. Dave Hillman

GLG News^SM Analyses by Dave Hillman

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NewPage On Verge Of Bankruptcy

August 16, 2011

NewPage's competitors didn't follow their $60/st July price increase and market demand has fallen while cash costs continue to escalate. SAPPI didn't announce any price change. Can anything else go wrong? Market Pulp has gone down somewhat which has helped a bit but their debt load is suffocating. They've shut 3 mills but competitors haven't followed suit. Imports from China and Indonesia continue at just under 1 million mt/year (20% of US demand).

Is The Party Over For Dissolving Pulp Producers?

July 29, 2011

Pulp prices began to escalate in the 4Q10 when cotton prices approached $2/lb. List price for DP was US$1500/admt on January lst but spot prices went as high as $300/admt by March/April. In July cotton prices plunged to $1.00 and many Chinese and Indian buyers stopped buyer. Spot prices fell to list price (contracted tonnage) and may actually fall below that number. Rayon is still in big demand so the 4Q may bring some of the business back but pricing is questionable.

Another Mill Jumps On The Dissolving Pulp Bandwagon!

June 17, 2011

The Lessbo paper mill of VIDA AB in Sweden will upgrade its sulphite pulp mill to produce 70,000tpy of pulp and paper - 28,000mt/year will be rayon grade dissolving pulp from 100% Spruce chips. The paper mill will still continue to produce 52,000mt/year of premium uncoated papers. The DP pulp will commence in late August. This appears to be a beneficial option for any smaller pulp/paper mill if it wishes to maintain its profitability in light of rapidly rising cash costs.

Another Newly Developed Dissolving Pulp

June 15, 2011

Naturally Advanced Technologies and Hercules Inc. (a subsidiary of Ashland, Inc) have entered into a joint agreement for CRAiLEX, a high grade dissolving pulp that is reported to exhibit higher grade value pulps that any other hardwood or softwood pulp.It was unclear whether CRAiLEX is derived from regular paper grade pulp. Last week NEO (headquartered in Norway) announced they had successfully patented a way to create high alpha dissolving pulps from ordinary papergrade softwood.

IP's Bid For Temple-Inland...The Focus May Be On Their Papermills

June 7, 2011

Temple Inland is the #3 containerboard/box plant producer in the US with 7 mills and 63 box plants. Of the mills the "jewels in the crown" may be the integrated Kraft mills at Orange, TX (760,000st/year), Rome, GA (895,000 st/year), Bogalusa, LA (913,000st/year) and New Johnsonville, TN (379,000 st/year). TIN's 63 box plants may be superficial in light of IP's acquisition of 83 of Weyerhaeuser's box plants. Some say the US already has twice as many box plants as it needs.

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