GLG News by Timber and Forest Industry Consultants

Dave HillmanIndependent ConsultantDave Hillman

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).

Dave HillmanIndependent ConsultantDave Hillman

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.

Dave HillmanIndependent ConsultantDave Hillman

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.

Dave HillmanIndependent ConsultantDave Hillman

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.

Dave HillmanIndependent ConsultantDave Hillman

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.

Dave HillmanIndependent ConsultantDave Hillman

Cosmos Specialty Fibers Begins Producing Dissolving Pulps

May 21, 2011

This older mill, located near Grays Harbor, WN has had several previous short term owners The present owners, Gores Group, is optimistic about becoming a regular supplier to the Far East for high Alpha cellulose dissolving pulps for rayon fiber, cellulose derivatives (chemicals for food and pharmaceutical applications). The mill officially began producing on May 21. Not particularly large by today's standards the mill can produce 140,000mt/year

Dave HillmanIndependent ConsultantDave Hillman

A First: Converting Paper Grade Pulp Into High Purity Dissolving Pulp

May 21, 2011

Dissolving pulp is a high purity, low yield pulp produced by only a limited number of traditional speciality mills. Now Avilon, part of Neo Industrial Viscose fibers, has successfully developed the means of converting 85+ Alpha Cellulose papergrade pulp into 94+ Alpha dissolving pulp. They are patenting this revolutionary process with the intention of licensing it globally. Conceivably this could put an end to the DP shortage and bring prices down from their present $2200/mt spot level

Dave HillmanIndependent ConsultantDave Hillman

Fibria's 1Q11 Reports Shows Impressive Results

May 4, 2011

Most impressive was their cash costs for market pulp of R$446/mt down 1% compared to 2010 average...this in spite of higher wages, chemical and maintenance/supplies costs. Net Income was R$389 million vs. 4Q10's $162 million and 1Q10's R$9 million. Fibria declared a dividend in the amount of R$264 million. Significantly higher earnings can be expected over the next 18 months.Net debt was reduced 19% qtr on qtr and 27% year on year.

Dave HillmanIndependent ConsultantDave Hillman

China Gains On The US But Still #2 Paper Producer

May 3, 2011

China surged in March buying 951,000mt - 65% more than in February and 35.5% over 1Q2010. With this increased demand China was forced to pay more for NBSK (i.e. $80/admt). From 2005-2010 China's paper and board production grew by 30-31 million mt while US production declined by 9.2 million mt. Containerboard was the largest segment at 53.4 million mt with graphic papers and tissue following at 34.37 million mt. Total annual capacity is now 100 million mt.

Dave HillmanIndependent ConsultantDave Hillman

March's Positive Boxboard Report

April 21, 2011

Boxboard is considered a leading indicator of the nation's business climate. Manufactured goods, fruit, vegetables, beverages etc. must be shipped in corrugated containers. Production in March increased by 2.2% over 2010 and increased 11.1% over February (bad weather may have contributed). Unbleached Kraft folding boxboard also increased year over year as did Recycled Folding Boxboard. All these statistics bode well for a continuing increase in business.

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