<b>ONP Holding its Own . . . For Now</b>

The slump in most paper stock grades seems to have avoided, for the most part, the old news market. Unlike prices for most other paper stock grades ONP has remained somewhat stable, with only modest price dips over the past several months. Whether the grade holds this enviable position into April is still uncertain. However, for most vendors the grade continues to be one of the surprising grades through the first several months of the year.

There are several reasons for the relative strength of the grade through March. Prices have been slightly soft, although movement continues to be steady to strong. While March ONP prices have held up fairly well, there are some storm clouds looming. The Korean market could be cutting its orders sharply.

There are reports that Pan Asia will be taking some downtime at two mills in April and May. The move could curtail ONP demand from the United States over the next two months. According to one source, roughly 10,000 tons will be taken out of the market over the next two months. This move will likely put some increased pressure on many exporters.

India is another country that has helped buoy ONP markets. However, there also are indications that ONP orders into that country will likely disappoint. The twin problems with these two countries should keep any possibility of strengthening offshore markets muted at best.

Declining markets in these two countries, as well as other offshore markets is leaving China as one of the few players in the market. However, there are indications that orders into China are starting to ease back. The strong orders into this country seen last year aren’t returning any time soon. At the same time, shipments from European sources to China are declining at an even sharper rate.