<B>Newsprint Markets Continue to Grow</B>

The newsprint industry is one of the few areas in the forest products industry that is showing strength. The improvement has allowed many handlers of old news to benefit from the steady demand from newsprint producers in the United States, Canada, and regions outside North America. Reflecting the improvement in market conditions, prices for deinked news has been holding up fairly well over the past several months. This is occurring while many other bulk grades have been facing sharp price reductions and softening demand.

While newsprint producers have been able to push through several price increases over the past several quarters, an additional price increase is being sought for early next year.

According to an article by the Associated Press, if the newsprint price increase goes through, it will be the fourth time in just over a year that prices have risen. The last three price increases have increased the price of newsprint from $480 a metric ton last September to about $600 this month, a rise of 25 percent, the paper said.

One of the biggest reasons for the improvement has been the ability of newsprint producers to remove excess capacity from the market earlier this year. Now, demand and supply are in tight balance. The result has been much better operating schedules by North American mills.

The offshore market also is benefiting from better than expected offshore orders for the material. China appears to be stepping back into the market for ONP, as well as old corrugated. One of the large consumers of these bulk grades in Asia is expected to start running, which is creating some optimism for various paper stock exporters.

ONP also is seeing some better orders from some of the second tier Asian buyers. The result has been a tight market for No. 8 news.