 |
| U.S. (000 tons) |
2001e |
2000p |
1999 |
| Shipments |
5229 |
5051 |
5061 |
| % change |
3.5 |
0.2 |
2.6 |
| Capacity |
5764 |
5626 |
5484 |
| % change |
2.5 |
2.6 |
1.7 |
| Operating rate % |
91 |
90 |
92 |
| Imports |
765 |
847 |
708 |
| Exports |
329 |
306 |
317 |
| U.S. consumption |
5665 |
5591 |
5452 |
| Canada |
|
|
|
| Shipments |
423 |
415 |
396 |
| % change |
2 |
4.8 |
3.1 |
| Capacity |
449 |
445 |
432 |
| % change |
0.9 |
3 |
3.8 |
| Operating rate % |
94 |
93 |
94 |
| e=estimated, p=preliminary. Sources: American Forest & Paper Assn., Pulp and Paper Products Council, Pulp & Paper Forecaster. |
| Company |
Annual capacity (000 metric tons) |
Market share (%) |
| 1. Sappi North America |
1,195 |
19.60 |
| 2. Appleton Papers 1 |
855 |
14.00 |
Stora Enso
(Consolidated Papers) |
850 |
13.9 |
| International Paper |
819 |
13.4 |
| Mead 2 |
770 |
12.6 |
| Westvaco |
725 |
11.9 |
| Potlatch |
385 |
6.3 |
| West Linn Paper |
190 |
3.1 |
| Domtar |
180 |
2.9 |
| Pasadena Paper |
160 |
2.6 |
Total N.A. capacity: 6.24 million tons
Capacity share of top five producers: 72%
Capacity share of top 10 producers: 98%
1. Appleton includes carbonless, thermal, and specialty papers. 2. Mead represents estimated coated free sheet capacity of Rumford, Maine. |
|
GRADE STRUCTURE. Coated free-sheet papers contain less than 10% mechanical (groundwood) pulp. They comprise as many as four of the five general categories of coated papers: Nos. 1 and 2, in which there is no groundwood, and No. 3, which may contain some groundwood. Nos. 4 and 5 are commonly groundwood grades but a small portion may be free-sheet (not containing groundwood pulp).
Nos. 1 and 2 generally range in basis weight from 60-100 lbs, and Nos. 3 and 4 grades from 40-90 lbs. Most coated paper (about 75% to 85%) has a glossy surface; the rest is a combination of dull, matte, and embossed. Brightness ranges from 88 for high-gloss No. 1s to 72 for less expensive, lower brightness No.4s with groundwood and chemical pulp and some clay filler. Bleached kraft hardwood pulp is used in making coated free-sheet, although some mills also use recovered paper. Coating solutions consist of pigments such as kaolin (clay), calcium carbonate, or titanium dioxide and binders or adhesives (such as soluble starches).
MARKETS. The North American coated free-sheet market improved in 1999 and into early 2000, driven by higher market pulp prices and a strong European market. Producers in North America pushed up prices in early Jan., but a $40/ton increase in July appeared to succeed but then unraveled under the pressure of high inventories and imports from lower cost producers in Europe and Asia.
Demand in North America weakened in 2000 with North American shipments of coated free-sheet grades down 13% year-over-year in Nov. 2000 to 359,000 mtons, their lowest monthly level in three years. This caused the shipment-to-capacity ratio to decline to 79% from 84% a year earlier, according to the Pulp and Paper Products Council. North American de-mand declined less than shipments as imports increased again. Through 11 months of 2000, imports were up 27% from the year before. At the end of Nov., North American mill stocks represented 46 days supply.
Preliminary year-end data showed another big drop in shipments in Dec. and an overall 6% decline for 2000 as de-mand remained weak and imports rolled in.
Prices for benchmark No. 3 60-lb rolls appeared in fourth quarter to slip below the $940-$960/ton level from before the July 2000 price hike attempt.
The impact of a January 2001 U.S. postal rate increase was not yet evident amidst the overall lethargy of the market. The U.S. dollar in relation to Canada and Europe continued to add to the market softness as it makes American markets more attractive for imports.
The market in 2001 also faced the impacts from a cooling down of advertising, especially a fall-off in dot.com spending in print media.
INDUSTRY CAPACITY. U.S. coated free-sheet capacity is expected to rise at an average annual pace of 1.5%, which compares with a 4.2% rate in the previous ten-year period. Uncoated free-sheet capacity is projected to remain essentially unchanged over the next two years, and then rise by 0.9% in 2003.
Recent consolidation and corporate changes in the market include Inter-national Paper Co.'s acquisition of Champ-ion International Corp., which boosted IP to the fourth largest North American producer. IP announced in Jan. it would sell the former Champion mill in Hamil-ton, Ohio, to Smart Papers LLC. Belgravia Investments became a leading producer through acquisitions of the former Simp-son Paper mills in Texas and Oregon. Among the biggest changes was the acquisition of Wisconsin-based Consol-idated Papers Inc. by Scandinavian giant Stora Enso.
Other producers like Plainwell Inc. and Gallaher Thorold ran into financial difficulties in 2000, with the Gallaher Thorold mill in Ontario and Plainwell's mill in Michigan both shutting down permanently. Georgia-Pacific Corp. announced in late-2000 it would close its 133,000 tpy Kalamazoo, Mich., coated and uncoated free-sheet paper mill.
By James McLaren
News Editor,Pulp & Paper Week
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