2002 U.S. Paperboard Prices Down; Demand Remains Unsteady
by paperloop.com

San Francisco, CA - For the United States pulp and paper industry, production was consistent with 2001's output, capacity continued to be mothballed or indefinitely shut in big numbers, and demand remained inconsistent.

The result: U.S. and Canadian pulp, paper, and board producers struggled to raise prices and tried to do so when they saw any improvement in demand.

Capacity, Pricing Among Top Issues

29 of 38 paper and paperboard grades surveyed by Pulp & Paper Week increased in price during the year, when comparing the December 2002 vs. December 2001 prices.

Of five major grades of paper, board, pulp, and recovered paper, only one, old corrugated containers (OCC), was higher priced in December 2002 than in December 2000. The US average f.o.b. seller's dock average for OCC was $54/ton in December 2002, up 29% over the December 2000 average price, according to Pulp & Paper Week.

Northern bleached softwood kraft market pulp was off 32% at $480/ton in December 2002 compared with $710/ton in December 2000; 30-lb newsprint was down 22% at $480/ton at December 2002 compared with $610/ton in December 2000.

Pricing Pressures

Over the last year, large end-users pushed for no price increases or wanted longer-term guaranteed pricing.

The hardest hit sector was publication papers, where no newsprint, uncoated groundwood, or coated paper grades increased in price in December 2002 vs. December 2001, according to Pulp & Paper Week.

Because of economic inconsistency, pulp and paper producers shut capacity, rather than overproduce.

- Excerpted with permission from paperloop.com