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Industry Reports

Deutsche Bank Reports Summaries


080310 Deutsche Bank Report - Dr. Paper's Pulse on Pricing (3/10/08)

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 hike. 

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 positives:

healthy operating rates & weak US$.



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.



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.



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