Trimming, Thinning Paper Webs

The lightweight coated (LWC) market has steadily tightened since last fall, with order times stretching out over four weeks and prices climbing near $25/cwt. Healthy global demand is the primary reason, as capacity increases and imports fall in the domestic market.

Shipments of LWC paper are up nearly 10% year-to-date, even as ad pages fall (3%). The slack is being taken up by catalogs, which are up about 6%, with catalog pages and units at a similar amount. This bodes well for the build-up of advertising materials for the December holiday season, and so prices go up.

Other industry factors pushing prices up are continued increases in pulp, operating rates around 95%, and fairly stable related markets like coated and uncoated freesheet and supercalendered (SC) papers. Economic factors include weakness in the dollar, increases in personal income and expenditures, and a solid retail sector that drives advertising and catalog publishing. A booming Asian economy is keeping many of those new tons at home, while European imports concentrate in Asia and enjoy a stable domestic market for now.

New LWC capacity is coming from Kruger's new machine in Quebec and Bowater's re-tooling of output in South Carolina. Stora Enso announced a project to increase output in Wisconsin, while UPM is pondering a new machine in Minnesota. An incredible amount of capacity is scheduled for Asia (China), though much may be soaked up nearby. European capacity is also rising, though slower due to machine retirements in Sweden, Finland, and Germany.

Some relief may be available from SC grades. Though the top-level quality (SC-A) grade has been moving in price and the bottom level (soft-nip calendered paper, or SNC) is largely sold out, the middle market (SC-B) seems to have market availability. Prices firmed up quickly at the beginning of the year, primarily due to strong demand in world markets, with U.S. shipments rising about 6% in the first half of 2004.

New capacity of SC papers is coming from Abitibi, the market leader, with a machine conversion nearly completed in Quebec. Fraser Paper is taking a stab at the market with a re-start of a machine in Maine. These should add about 300,000 new tons, causing prices to ease just as the big buying season begins. Imports are down about 3% due to dollar weakness and interest in Asia, but several machine projects in Sweden and Finland are likely to lift imports into the buying season.

Basis-weight changes are usually cost-driven. Buyers having trouble finding LWC in the 34-lb. class might consider SC papers in the 28- or 30-lb. range. SC consumers who want more bang for the buck might drop basis weight down from 70 lb. to 60 lb. and stretch out the run.

These changes are now possible with better products seeking to achieve that magical money-saving 3.3-ounce level of printed material.

The biggest pitfall in weight changes is not press breaks due to strength concerns, but rather strike-through and show-through results. Squeezing out an extra point of opacity would be wise. An advantage may be to run a little higher speed to compensate for the loss of stiffness, or at least check and re-check tensions through the press to avoid jams or wrinkles.

Paper companies are employing a few new tactics in an effort to draw wider audiences away from electronic media and back to print.

Sappi Fine Papers courted the stodgy business world with an advertisement in Fortune, set directly inside a rather scathing review of current advertising practices. Sappi followed it up with a promotional piece called "Life with Print," using several products (McCoy, Strobe, and Lustro) and customers to demonstrate the power of the printed page. The piece is as well done as its message is intended.

Kruger's new entry is called Krucote 76, trying for higher brightness in its LWC portfolio. Fraser will introduce Pinnacle, its SC-A+ sheet from Maine, for the fall campaign. Stora Enso is following the lighter-weight trend with its new ConsoPress Advantage, which seeks to deliver high printed reproduction with savings at the post. Earlier this year, the company released NovaPress along the same marketing lines.

MeadWestvaco made a major investment in its effort to boost its web business. Brands including Focus, Vision, Escanaba, and Dependoweb have added "Plus" grades, with increases in brightness and resulting improvements in printed gloss and color reproduction.