<b>Office Grades Continue Slide</b>

There doesn’t seem to be any sign of light for office pack. Demand continues to dwindle from both domestic and offshore mills.

There are reports that downtime continues to play a greater role in the market, with a host of domestic mills reducing their overall intake of the grade. Several larger consumers of various office pack grades are indicating that they won’t be buying any sorted office pack for June.

Already there are concerns that demand is starting to dry up at more mills as a host of mills look to burn off excess inventories.

Markets outside North America don’t show much sign of a relief. Orders have been slowing, and there aren’t any indications that mills will look to jump into the market to take advantage of the cheaper prices.

Mexican mills have been buying some SOP, as well as a number of other office-type grades. However, a number of vendors note that there isn’t much in the way of any rallying for the grade. Some vendors have been complaining that as the U.S. market continues to struggle, more finished paper products are coming into the Mexican market, creating an even more difficult environment for Mexican mills.

The Asian market, especially South Korea, China, the Philippines, and Indonesia don’t appear to be looking to increase orders, leaving more exporters fighting over existing orders.

Many dealers feel that the best-case scenario is an improvement in movement and possibly price by the end of this summer. In the meantime, more vendors are looking to reduce the amount of office pack they are collecting. Several dealers have gone to the next step of ceasing handling the grade. One big problem continues to be the high cost of sourcing material while seeing lower prices for the finished product.