Deutsche Bank Reports Summaries
080310 Deutsche Bank Report - Dr. Paper's Pulse on Pricing
Deutsche Bank - Equity Research
Can they do it? Increasing evidence of a slowdown in box
demand will raise the "degree of difficulty" on a containerboard
Several industry sources have pointed to a marked easing in box
vol's over the past 2-3 weeks. The 7 largest producers (75%
of North American market) announced plans for a $50/ton March
containerboard price hike and Smurfit & IP have announced
corresponding box hikes. The big obstacle will be making
prices "stick" in the wake of sluggish box demand. Key
healthy operating rates & weak US$.
* UNCOATED FREE SHEET
Uncoated white paper prices continue to push upward.
Domtar, International Paper, Georgia Pacific and others are out
with a $60/ton March price hike on 50-lb offset rolls, with other
UFS grades set to follow. The increase comes shortly after
many producers announced a $60/ton increase on cut-size paper for
Feb. Our trade sources report that "spot market" prices have
risen $40/ton since 1/1/08. Jan. UFS shipments of uncoated
free sheet declined 1.2% y/y. However, capacity closures are
keeping the market snug.
* UNBLEACHED KRAFT BOARD
MeadWestVaco announced it will increase coated unbleached kraft
(CUK) grades for folding cartons by $40/ton in April.
Operating rates averaged nearly 100% during 4Q07, with domestic
demand up 10.7% y/y in 2007. According to RISI, price
increases for all major folding carton grades have been announced
over the last few weeks.