NEW YORK , Jan. 10, 2013 (Viewpoint) -
excerpt from Vertical Research Partners
Cautious Datapoint for Domtar and International Paper - We continue to favor International Paper and Domtar based on their overall fundamentals and valuations. That said, this afternoon's post-market close disclosure that uncoated free sheet shipments for North America fell by 7.9% (on a preliminary basis) represents a modest headwind. Based on just 740,000 tons shipped, North American mills experienced only an 80% operating rate, helping to explain recent price erosion (reported by RISI) despite rising pulp prices. (Due to smaller producers being non-integrated back to pulp, higher pulp prices normally help uncoated free sheet prices hold up or rise). Uncoated free sheet is converted into copy paper, envelopes and writing pads, among other uses.
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