paperloop.com
BRUSSELS, Aug. 21, 2001 (paperloop.com) - The European uncoated woodfree market remains quiet as the vacation period continues. But output curtailments have hit the headlines, as uncoated and coated woodfree producers kept taking downtime in the region during the second quarter.
Demand has not been anything to write home about this year, but the slack trend has been made worse by the mid-year vacation period when many offices are empty and order books thin. On top of the pressure to lower prices due to the lack of demand, suppliers have been faced with speculative buyers who are betting on uncoated woodfree paper prices falling further. As a result, buyers have been confining their purchases to minimum levels, replenishing stocks only when they need to.
Imports have perked up as those papermakers who have not been idling their machines have tried to find alternative markets for their products. One producer said large volumes of uncoated woodfree paper has been imported to Europe, especially from southeast Asia. Another supplier indicated that some Australian paper has found its way to the UK. 
Southern European papermakers have also reportedly been actively exporting to the Italian market. According to sources in Spain, the Spanish uncoated woodfree market is saturated due to overcapacity in the Iberian peninsula. 
Prices under pressure
The slack demand has pushed prices down in Europe over the vacation period, despite the heavy downtime taken. In the French market, prices for offset reels and sheets dropped by FF 100/tonne in June and by a further FF 100-300/tonne in July. One supplier said that business almost ground to a halt in July and that hefty discounts were available even on small orders. 
Germany has not escaped the price plunge either, with levels for offset sheets dropping DM 50/tonne at the top end of the range in June and DM 50/tonne at the bottom of the price band in July. Prices for offset reels dipped DM 100/tonne at the lower end in July. 
Italian levels for offset sheets and reels remained steady in June, but eroded by ITL 50/kg in July, while in the UK, both offset sheets and reels slid by Pounds 10/tonne in June and a further Pounds 10-20/tonne in July.
Cut-size crumbles
Copy paper managed to escape the price pressure on other uncoated woodfree grades for much of this year. But since June there have been signs that A4 is fallible, with levels starting to erode in almost all the major markets. 
Several players complained that Italy and Spain have been difficult markets, as some domestic producers have been running their machines flat out and selling as much as they can at low prices, benefiting from cheap spot pulp levels. Some suppliers to the Italian market said that the country's merchants have been aggressively trying to negotiate lower prices. 
Copy paper prices have slid by ITL 150/kg since April, and there have been reports of spot prices selling at ITL 200/kg below the market level. But one supplier was hopeful that the bottom has been reached and intends to try and raise prices by ITL 50/kg in September.
Cut-size levels remained steady in Germany. But in France, A4 prices have started to erode. Levels fell by FF 100/tonne at the bottom of the range in June and by another FF 100/tonne in July. 
In the UK, several industry insiders noted that the copy paper market has become more aggressive. Some suppliers reported that levels have been gradually eroding for the past couple of months, but others said they have not lowered their prices. On top of that, A4 from outside Europe, for example, from southeast Asia, is reportedly selling at up to Pounds 50/tonne below market levels.
But the outlook for the uncoated woodfree market is more positive for the rest of the year. Suppliers indicated that order books already look healthy for September, when activity traditionally perks up.