Coated Groundwood Marketing Mismanagement- Is it just me, or is the sales management of coated groundwood grades in the current bull market the worst ever? What happened to paper allocations? Lead times are out three months for many coated producers, and over two months for just about everyone. All companies are not equally culpable, of course. I have not heard any complaints about Kruger, or FutureMark for example, but the better managed backlogs are the minority. (By the way, I would be happy to publish any rebuttal to my criticisms – and would do so without identifying the source if that is preferred.) Continue Reading
President and CEO, E. Thomas Curley, had barely learned the most efficient traffic routes to the office, when he was handed a check for $1.265 million, told not to come back, and, by the way, “don’t forget that you ‘resigned’”. Not a bad four month gig – I doubt that Lady Gaga does that well. Continue Reading
NewPage, in removing three top level executives, is big news these days. I find this situation fascinating. Why the shake-up, and why now? The big question is viability. Would Cerberus release its three top people before declaring bankruptcy? Maybe… I hope to offer possible explanations later this month. In the meantime, let’s look back and review NewPage strategies that made the company what it is today. (The photo is a visual description of what Cerberus hopes to be – Google Cerberus) Continue Reading
The NewPage agreement with Domtar apparently commits NewPage to filling orders accepted by Domtar before it shuts down. NewPage does not, however, prefer the heavy basis weights (45# and higher) that were produced at Columbus. Although NewPage purchased the Columbus backlog, it doesn’t appear that it is enthusiastic about taking over these customers – at least that is what I have heard from multiple sources. To be more specific, customers of Domtar (at least many of them) are on hold. No specific direction has been provided as to future pricing or availability. Continue Reading
The passage that follows is from our most recent issue of Reel Time (March 1). We were confident that coated and SC-A prices would soon soon begin a sustained recovery – if not initially due to the supply/demand balance, then due to machine closures that would then impact the supply/demand balance. Continue Reading
It is, of course, illegal for paper companies to collude or discuss anything related to prices, markets, etc., or even to “signal” intentions through third parties. Executives and sales people go out of their way to avoid even the possibility that their actions could be construed as improper. Jail is, after all, much more unpleasant than low prices. Continue Reading
That “always darkest before the dawn” thing is the rule in paper pricing. “Need” has no impact on pricing, neither did the Black Liquor credits, and costs are of no consequence (except as costs relate to closures). So the legitimate question, when AbitibiBowater announced a $60/ton coated groundwood price increase in late February (for April 1), was whether this was an increase based on “need” or an increase based on the supply/demand balance. Most came down on the side of “need” and suggested that the increase would fail. Continue Reading
Just as AbitibiBowater was advising customers that its coated groundwood price increase was being withdrawn, NewPage announced increases on coated free and coated groundwood grades. I have been out of my office and with limited availability during the last week, but I will write about the subject in more detail later this week. On the surface, there appears to be no rationale for the timing of the NewPage announcement. Maybe some of you can suggest explanations.
Coated Groundwood Price Increase- We have been projecting a second quarter price reversal in coated grades since early last fall. It has been our contention that a market turnaround could occur without additional capacity withdrawals – if producers would maintain a disciplined approach. In other words, producers should continue producing uncoated grades on coated equipment well into the future, rather than switching back to more profitable coated grades as soon as possible. Continue Reading
Our NewPage post of last Friday was unclear as to whether the two idled NewPage machines were re-starting or the company’s announcement was simply informing us that “other” market related downtime was no longer needed. Now, we know. I had missed a Forestweb story on February 16 which confirmed that Rumford PM #10 (170,000 tons) is operating again. Forestweb reported today that workers laid off from Whiting PM #63 (90,000 tons) were being recalled by March 1.
This development is important for at least two reasons. First, it confirms that coated backlogs have improved significantly. Second, it delays coated pricing improvement. Continue Reading