Industry Reports

Deutsche Bank Reports Summaries

080428 Deutsche Bank Report - Dr. Paper's Pulse on Pricing (4/28/08)

Deutsche Bank - Equity Research

* LUMBER

The Random Lengths composite price rose $7/mbf to $262/mbf.  Recent capacity withdrawals by Canfor & Simpson have helped mkt dynamics. Can the momentum be sustained?  News of restarts and extra shifts are already emerging. This week's price uptick was also driven by accelerating prices in the south where a shortage of logs limited production of certain widths.

* NEWSPRINT

April prices for 30-lb newsprint rose $20/mton to $660/mtons.  The first 4 of 6 consecutive $20/mton price hikes planned for the first half of the year were all implemented.  Implementation of the last 2 installments would take prices to $700/mton by June.  Trade sources are reporting that further price moves may be ahead, but publishers are likely to be increasingly resistant to further hikes. Newsprint decline is getting worse as consumption @ US dailies -15.2% y/y in March (-12.8% YTD).  DB's annual "Montreal Summit" on June 17-18th will include meetings w/ AbitibiBowater, Catalyst and Kruger.

* UNCOATED FREE SHEET

Uncoated free sheet prices continued to rise in April, substantially completing the $60/ton price hike initiatives announced for March.  According to the trades, cut-size prices rose $50/ton in March and another $10/ton in April.  Offset roll prices rose $30/ton in March and another $20 in April.  At the same time, demand appears to be easing.  Shipments declined 9.6% y/y in March.  On supply side, more changes would seem inevitable.