Major Mills add a fuel surcharge….

 

Energy prices, including gasoline, natural gas, diesel, fuel oil and chemicals have been rising for the past year & dramatically over the past 2 months and most mills can no longer absorb these costs and have instituted a $0.55 fuel

surcharge along with raising stop/off charges from $120 to $200 for less than T/L.

 

International Paper has NOT implemented the $0.55 fuel surcharge and has only increased their less than truckload (44M#) stop/off charge to $200.

Please contact your CSR with any questions...

   November — 2005

 

  Happy Thanksgiving

 

 

Happy Birthday

Elly & Vi Brown—14th

 

 

 

Surprising decline of U.S. uncoated freesheet demand has producers scrambling to reduce high cost capacity

U.S. uncoated freesheet demand was abysmal in September, reflecting continued displacement by electronic information as well as the shift in industry standards to 92 brightness paper.   Mills may have held off on shipments to allow customers to work down inventories of lower 84 brightness paper, contacts said.   All major producers are now beginning to ship the “new shade” paper in a major shift in standards kicked off by International Paper and quickly followed by Weyerhaeuser, Georgia-Pacific, Boise Cascade, and then Domtar.  “Every producer is expected to have the 92 brightness paper in the    market by yearend and 84 bright uncoated freesheet is a thing of the past in North America,” one merchant said.  Demand for uncoated freesheet dropped 7.5% in Sept., bringing the year-to-date demand decline to 4.7%, according to preliminary American Forest & Paper Assn. statistics.  But, surprisingly pricing has been relatively stable despite the weak demand and challenging industry shift in quality standards.  Some industry observers earlier had expected large lots of “old shade” paper to be dumped on the market by mills, merchants, and printers trying to unload leftover inventories-although more of this may still happen before yearend, one merchant said.   But two-tiered pricing based on the two brightness standards has not developed as some expected since the uncoated freesheet market has so rapidly swung to the new standard (despite tightness in supplies of optical brighteners).

Margin Squeeze.  Pricing on commodity offset & cut-size paper is down about $50/ton or 6%-7% from last year’s cyclical peak, which was below a number of earlier cyclical peaks during the past decade.   This is hardly satisfactory in the current environment of escalating energy-related costs, which are squeezing manufacturing profit margins paper-thin & causing some mills to lose money, contacts say.

North American producers were unable to implement a $40/ton increase effective September 19th after market leader IP did not raise prices after promising customers that the change in paper quality would not add to their cost.              

                                                                                                                                        Excerpt  PULP&PAPER WEEK/ October 31, 2005

  DMIA—Orlando, FL 2005