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NBSK, Newsprint indexes

FOEX INDEXES

Paper industry performance in October in North America was even more disappointing than expected. Not only newsprint and coated papers but now also corrugated box shipments showed negative numbers against 2005. Production losses, partly due to problems in fibre availability at sites connected to sawmill chip pulp units, and consumption related downtime help the price structures.

In Europe, things look clearly brighter in volume terms. There was also a clear improvement from the slow growth seen in September. Combining the numbers from CEPIPRINT and CEPIFINE, the total printing and writing paper statistics, including newsprint, showed a 4% increase in the shipments in October against October 2005. Year-to-date data shows a very similar 3.9% gain. Proportionally the biggest improvement has been seen in SC. In the annual numbers, exports have grown more than the regional sales, partly due to the labour strife in Finland in 2005 which affects the comparisons.

In market pulp, supply reductions continue to offset the increases in production from the new line in Chile and from the market pulp volumes released from the Nordic companies which have closed or are soon to close their integrated paper capacity. Wood supply problems impact not only the North American mills which have difficulties in obtaining sawmill chips but also Continental European mills which need to compete for wood against the use of wood directly for energy production. The situation is particularly tight in BSKP. Weakness of the USD reduced the cost of pulp in Euro-terms despite of the gradual creeping through of the earlier announced price increases.

In the North American pulp market, problems in wood raw material supply continue to tighten the market although weaker economic activity and, with it, softening paper markets have a reverse impact on the market balance. All quotes remaining for the average calculation after the removal of the top and bottom 10% were at 770. The US NBSKP index remained thus again flat at 770.00USD/ton.

The previous is an excerpt from FOEX Indexes Ltd. PIX Pulp and Newsprint Indexes. For a complete version, see www.foex.fi