Features Equipment & Systems
From Forestweb – Week of September 5, 2006

SAN FRANCISCO — It was another relatively quiet week for pulp and paper prices in both the U.S. and Europe ahead of planned September price hikes and higher demand typical in the fall, according to data from FOEX Indexes Ltd.

FOEX noted that the softwood pulp supply situation continues to be tight in both the U.S. and Europe, supporting prices ahead of new hikes planned for September and October. The U.S. index price for northern bleached softwood kraft (NBSK) pulp started moving upwards again the last week of August, after three straight weeks at $750/tonne, increasing by a modest $1.62/tonne.

In Europe, the NBSK index price continued to slowly increase although planned price hikes in the region will be staggered over October, as they were in September. The dollar index price crept up by $1.32/tonne to $709.69/tonne, but the price in euros fell by ?1.35/tonne to ?553.71/tonne due to a 0.4% drop in the value of the dollar against the euro the last week of August.

The hardwood pulp index price in Europe remained little changed again. Strong ongoing demand in the market is matched by healthy supply, FOEX noted, unlike the situation in the softwood pulp market. As a result, the bleached hardwood kraft pulp (BHKP) index price has only increased by about $70/tonne so far this year compared to a $111/tonne rise in the NBSK index price.

In last week of August the BHKP index price crept up by just 66 cents in dollar terms to $658.87/tonne but the euro-denominated index price slipped by ?1.70/tonne to ?514.06/tonne due to the dollar’s weakness.

Paper prices

There were again very few changes in the index prices for printing paper grades last week ahead of the busier fall printing season. Those changes that did occur were largely due to the slight weakening of the euro against currencies outside the European Monetary Union. The currency-related boost was offset by price weakness for coated paper grades, however. The lightweight coated paper index price slipped by 13 cents the last week of August to ?705.00/tonne, and the coated free-sheet price was unchanged at ?720.27/tonne.

The uncoated free-sheet price was given a currency-related boost, pushing up the index price for A4 B-copy paper by ?1.53/tonne to ?806.95/tonne. Similarly, currency movements pushed up the newsprint price in Europe by 37 cents to ?519.85/tonne.

Despite attempts by producers to further raise newsprint prices in the U.S. this fall, FOEX reported small declines in the index prices.

Packaging prices

Packaging prices continued their slow, upward march, boosted by favourable exchange rates with both non-EMU currencies and the dollar, and by containerboard price increases that were implemented in the U.K., beginning in August.

Ahead of September hikes in Europe, however, the recent increase in kraftliner prices paused the last week of August. The index price for brown kraftliner edged up by just 24 cents to ?489.95/tonne and the white-top kraftliner prices barely changed, rising only four cents to ?670.09/tonne. Higher quotes helped propel prices for recycled grades, however. The testliner 2 index price was ?3.36/tonne higher at ?388.89/tonne, the testliner 3 index price increased ?2.68/tonne to ?359.45/tonne, and the RB fluting price increased by ?2.26/tonne to ?344.65/tonne.