<B>Slow January In Store for Low Grades</B>

Paper stock markets are unlikely to see much of a boom early in the year, according to many vendors still struggling from the hammering seen late last year.

Low grades continue to try to find their bottom levels, while many of the higher grades have seen rapid declines in prices affect conditions.

The culprits for the sluggish markets are many: significant downtime for many sections of the paper industry, the move by many mills to adjust inventory levels to reduce the amount of material coming in, lower prices for the finished product, translating into lower raw material prices, and soft export activity.

Although the next month looks tough, there are some positive signs further down the horizon. Exports have been dissolute lately, although many exporters feel that later in the winter and early spring should be a return to stronger export markets.

When referring to the export market, activity by Chinese interests appear at the top of the list. Over the past year the Chinese market has been the main driver for paper stock markets, especially grades such as old corrugated and old news.

Despite the present slowness in total shipments, there appears to be some optimism that there will be a pickup in shipments to this region by the spring.

The ONP market also could get a bit of a  boost this spring as a number of newsprint producers look to push through price increases. In the mean time, inventory adjustments appear to be the biggest problem as buyers look to keep production and shipments in balance, reducing total demand.

Expectations are that most grades of old news will soften in January, with some expecting a $10 a ton drop this month.