<b>High Grades Continue Fall</b>

There continues to be a relentless downward push for most high grades of recovered fiber. The absence of a significant export market has allowed some domestic mills to cut their prices. On the domestic side there continues to be concerns about some the financial ability of some deinking mills.

Payment times are being extended, leaving some packers with fewer outlets for the material. Coastal regions continue to be the hardest hit sectors in the market as offshore mills continuing to curtail new orders.

Sorted white ledger continues on the downside, with only some modest orders filtering in on the offshore market. Orders into Korea  haven’t been too strong as of late, leaving some exporters redirecting orders to other locations.

The Mexican market appears to be in slightly better shape, with some new capacity coming on line. The orders have been enough to help prop up markets, although there continues to be some other difficulties.

Along with the problems with SWL, computer paper continues to be one of the biggest problems for the domestic paper stock market. In the past CPO and laser-free CPO were more valuable grades. Several mills were paying premiums for the grades. However, with the onslaught of laser printing, many paper stock dealers report of fewer and fewer end consumers looking for the grade.

A number of paper stock dealers say that the grade is going the way of tab cards. Premiums for the grade have all but disappeared for most vendors due to the limited amount of the grade on the market.

Several dealers report that most of the CPO, including laser-free, is being blended in with SWL and other grades due to the limited demand. This move is driving down the price for CPO throughout most parts of the country.

Despite some difficult short-term problems with deinking grades, there are some hopeful signs in the market. Pipsa, a Mexican paper company, is installing a deinking system which should help boost demand for grades such as SWL.

Korea, which has been buying reduced levels of SWL, could be coming back a little stronger in the market over the next several months. This could help firm the SWL market.

The pulp substitute market is seeing even greater difficulties. Pulp markets have been dropping on almost a monthly basis over the past several quarters. The steep oversupply of market pulp on the world market has worked to drive down pulp substitute grades.

There aren’t any concrete indicators that pulp prices have stabilized, despite a plethora of pulp mills taking downtime to remove excess capacity from the market. With the overall U.S. economy slowing, demand for the finished products have also waned, creating more difficulties for high grade markets.