<B>Paper Stock Exports Starting to Return</B>

There appears to be some voices saying that the boom/bust export cycle is starting to turn around. Although prices for many of the low grades have been eroding over the past several months, a number of optimists feel that looking slightly further than the end of this month could be a positive for the industry.

With Chinese New Year toward the end of this month many of the larger consumers of recovered fiber in Asia have scheduled shutdowns, typical of the holiday. Once the mill closings in Asia end there could be a swing in orders for some of the hardest hit grades such as OCC and mixed paper.

The stabilizing of these grades could set the table for better markets moving into the second quarter of the year.

There still isn’t any significant trend toward stronger orders. What appears to be cropping up is the sense that prices are starting to hold their present level.

There has been a modest improvement in a number of the higher grades, with one paper stock dealer reporting a modest $10 increase in white ledger for this month for offshore shipments. The renewed interest in SWL by Asian mills, especially Korea, could help firm prices for the grade over the next several months.

Another factor for the modest improvement in many deinking grades can be attributed to the move by pulp producers to push through price increases. It still isn’t certain that higher pulp prices will hit the market the first half of this year. However, some consumers are hedging their bets by buying some blocks of recovered fiber.

While the export market holds some short term promise for a number of grades, old news seems to be on a bit of a downward cycle. The grade had been moving up through most of last year, even when OCC started to slip. Lately, however, there appears to be limited export activity for the grade, resulting in some slippage in the grade.

Whether or not this is a short term trend or could last for several more quarters is yet to be determine.