-----Original Message-----
From: Dillon, C A [EQRE] [mailto:c.a.dillon@ssmb.com]
Sent: Thursday, October 18, 2001 6:49 PM
Subject: Market Pulp -- Weyerhaeuser Announces U.S. Pulp Price Increase


Chip Dillon
Managing Director
Salomon Smith Barney
388 Greenwich Street -- 28th Floor
New York, NY 10013  USA
Phone: 1-212-816-2793
Fax (US): 1-800-380-6401
Fax (International) 1-212-816-1090
Email: c.a.dillon@ssmb.com

*	In September, many major market pulp producers announced px
increases of $20-$30, effective Oct. 1. One major hold-out was Weyerhaeuser.
At the time, we were skeptical of the success of a px increase for Oct.
based on current market conditions -- favoring a gradual, modest increase in
Nov and Dec.
*	This afternoon, WY announced that it was raising pulp pxs by $20 per
tonne in the U.S. to $500 from $480/tonne (effective November 1).  This move
would effectively put WY's pricing in-line with the higher October levels
attempted by other producers (which have not generally held, to our
understanding).
*	Consistent with our view, we do believe that global market pulp pxs
can rise modestly in November & December based on the fact that several
regions' producers are seeing realizations near-or-below cash-cost levels.  
*	We maintain our view that global market pulp pxs will rise gradually
(at a modest pace) throughout 2002, but average below 2001 levels (cont'd
below) 

OPINION
We also see much higher average pulp prices in 2003 and again in 2004 --
which we regard as the cyclical peak year. Our average NBSK price forecast
for Europe remains $540 per tonne in 2001; $510 per tonne in 2002; $595 per
tonne in 2003; and $695 per tonne in 2004. 
We note that Weyerhaeuser's action is for the U.S. market, which has
generally been roughly $30 per tonne higher in price level than Europe due
largely to the impact of the very strong US dollar vs European currencies.

Company mentioned: 

Weyerhaeuser (WY -- 1M -- $49.09)



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