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
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
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
We heard from angry suppliers and puzzled buyers over the last few days. Apparently, a weekly paper publication reported very negative comments on the SC and coated markets; particularly coated groundwood. The report also caused a stir on Wall Street when it began circulating among paper analysts. From what I was told, claims in this story included: (1) the spot market in coated groundwood is very active with prices available as much as $30 and $31 off list, (2) the year-over-year increases in coated shipments for November and December were only a blip. Continue Reading
We don’t have the November AF&PA data for coated grades yet so another short update will be provided next week. Since Reel Time is not published this month, we decided to provide these mini-updates.
Newsprint: Publishers consumption in November was down 20.6% (y/y), and is now off by 24.6% through November. This is the best monthly (y/y) comparison since October 2008. These year-over-year comparisons will continue to improve. The December decline will be under 20%, and there is a good chance that declines will moderate to under 10% by February.
Offshore exports in November (177,000 tonnes) set the high level for 2009 but were still off (y/y) by 12%. Several months ago we forecasted that (based on anecdotal reports) the 9-month slump for offshore exports was over, and that is being confirmed by the data. North American exports in 2010 will be much stronger than has been the case in 2009.
SC Grades: North American demand for SC-A in November (116,800 tons) was up 3% (y/y) but down 12.4% (16,500 tons) from the previous month. This is disappointing data for producers. After a very good October, North American shipments to the domestic market were less than full capacity again in November.
North American SC-A imports were much stronger than earlier this year (33,000 tons) but still off by 14% (y/y).
North American SC-A exports blossomed this spring for the first time ever. Exports were 5,500 tons in November, about the average of the last half-year. This is a big help to the market - occupying roughly 4% of North American SC-A capacity.
We will save our forecasts, and pricing discussions for paying customers.