Starting in the New Year, AbitibiBowater will increase the price of its high bright groundwood papers by US $60/st,…
Starting in the New Year, AbitibiBowater will increase the price of its high bright groundwood papers by US $60/st, according to RBC Dominion securities Growth & Yield Report.
Analyst Paul Quinn of RBC notes the price hike is in line with the company’s previous pricing activity. “The move is not a surprise to us, as it follows the company’s aggressive hikes for newsprint (up to $60/mt per quarter through 2008),” he noted.
Quinn further highlighted that demand for uncoated mechanical grades is positive 1.5%, and estimates that, “all else being equal, the company’s sensitivity to a US $10/st change in groundwood paper prices at about US $22MM in EBITDA. As with the newsprint increases, we expect other producers will follow suit, and highlight the positive impact the increases will have on Catalyst, with its $12MM sensitivity to a US$10/st change in groundwood prices,” he said.
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