May Paper Market Update

Coated freesheet (CFS) paper prices in North America are $60-70/ton higher then the levels from the beginning of 2021 and about 4% higher than a year ago, according to the Fastmarkets RISI’s PPI Pulp & Paper Week pricing survey. This past week, Verso and Sappi, the two largest producers by capacity, separately announced new price increases on CFS sheets and web rolls. Verso set a 6-7% price increase on “all coated sheets and sheeter rolls, as well as coated freesheet web,” effective June 1. And Sappi North America announced a 6% transactional price increase, effective with May 31 shipments, including sheets, sheeter rolls, and webs. Producers said the main drivers for those price increases are higher costs, including for pulp and transportation, as well as reduced paper capacity.

With reduced supply due to recent temporary and permanent capacity closures in North America, the CFS mill operating rate has significantly improved this year, reaching 113% in March, according to the PPPC. The rate was 90% a year ago. Even though CFS demand in the first quarter of 2021 was 22.9%, or about 182,000 tons lower compared with the first quarter of 2020, North American CFS production declined 32.9%, or about 202,000 tons year-over-year. Imports also declined 29.9%, or about 60,000 tons in the period, according to the PPPC data. (Source: RISI P&PW)

Stora Enso to Permanently Shut Kvarnsveden, Sweden and Veitsiluoto, Finland Mills

Stora Enso will start co-determination negotiations with employees at its Kvarnsveden Mill in Sweden and Veitsiluoto Mill in Finland regarding a plan to permanently close down pulp and paper production at both mills. The planned closures would take place during the third quarter of 2021.

The Kvarnsveden Mill in Borlange, Sweden has two paper machines with a combined annual capacity of 565,000 tonnes of supercalendered (SC) magazine papers and improved newsprint. The mill has also an integrated softwood thermomechanical pulp mill with an annual capacity of 900,000 tonnes. The Veitsiluoto Mill in Kemi, Finland has a total annual capacity of 790,000 tonnes on three paper machines. Two machines produce woodfree uncoated paper (WFU) for office use and one machine produces coated paper grades, mainly for magazines but also for packaging applications. (Source: RISI P&PW)

Domtar Confirms Merger / Acquisition Discussions with Paper Excellence

In response to speculation in the press about a potential business combination or acquisition between Domtar and Paper Excellence, Domtar issued a statement acknowledging that discussions between the companies have been held. However, the company said these discussions may or may not result in an agreement.