Rising Input Costs Drive Uncoated Groundwood Hikes
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All major N.A. producers have announced a $40/ton price hike on uncoated mechanical grades, effective June 1/July 1, according to Wilde. Catalyst has set a $70/ton increase on directory effective July 1. Rising input cost is the key driver, Wilde notes. Supply disruptions at St. Mary's Paper should help tighten the SC portion of the market, he adds.
Key issue? Wilde asks. For one, demand is weak, he points out. Preliminary April shipments were 11.7% m/m and -14.7% y/y. These numbers may dent prospects of a successful price increase, he says. In directory papers, recent capacity cuts have tightened markets. However, with ˜80% - 85% of the directory market under annual contracts, the near-term impact will be limited. In April, directory estimated prices were down $10/ton to $710 - $730/ton, +9.1% y/y and 35-lb offset was down $15/ton to $660- $720/ton, +16.9% y/y. SC-A estimated prices rose $5/ton to $810 - $840/ton, +10.4% y/y (announced = $40 - $60/ton).
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