<b>Paper Stock Markets Looking for a Bump</b>

If the paper stock market needed a boost now would be the time. If there is any impetus for a better improvement in the near term market it could come with the already sharp decline in prices which has curtailed collection of some grades.

Prices for most paper stock grades are down significantly from figures of only several months ago. The problems with less than strong prices for many of the commodities are one of the key reasons many waste management/recycling companies are reporting flat revenues for the most recent quarter.

The export market continues to be a source of frustration for many exporters as a combination of limited offshore orders and low prices for finished products is slowing price and demand for the material.

The biggest decliners continue to be the high grade market. Pulp substitutes have been seeing sharp cuts in price due to the sinking pulp prices spreading throughout the world.

While Norscan countries continue to take ample downtime to bring supply and demand back into balance, many Asian and Latin American mills continue to produce significant amounts of market pulp. This swing is putting even further pressure on many of the pulp substitute grades, notably hard whites.

Along with the downward trend for pulp substitutes is the continued slide in sorted white and manifold white ledger. These grades, along with coated book stock, computer paper and even office pack have been coming off through this year. Despite low prices, there appears to be a strong sentiment that prices may decline even further before there is any stabilizing in the grade.

Old corrugated container prices may dip further in May. Significant paperboard downtime is playing havoc with generators. The problems have pushed the mill prices down to a level where concerns about a sharp drop in generation could reduce the overall supply of the material.

Orders continue to be off significantly. Most of the larger paperboard mills are taking downtime at some of their facilities, which is creating greater problems for many vendors.

The only ray of hope in the short term has been the market for double-lined kraft cuttings. According to a number of paper stock dealers the drop in operating schedules at box shops has cut into the generation of DLKs. This may be the impetus for modest strengthening in this grade moving into later spring.

Old news markets are finding some difficulties lately. It looks like the hope for a newsprint price increase is not going to hold. Several of the largest North American newsprint producers had attempted to pass a $50 a metric ton increase this spring. However, Abitibi-Consolidated already announced it was cutting its price increase in half as demand continues to remain weak.

At the same time a number of North American newsprint producers are looking to cut production, which could result in lower demand for the ONP raw material.