BRUSSELS, Aug. 30, 2001 (paperloop.com) - The European coated woodfree market has seen a welcome boost, with producers launching attempts to raise prices. M-real took the lead in July when it announced having started negotiations with customers to raise coated woodfree indent prices in Germany. The French market was the company's next target. 
Stora Enso has also kicked off talks to increase indent prices for coated woodfree paper. South Africa's Sappi said it has already managed to improve its indent levels in Europe. But the companies have remained tight-lipped on the amount of the increases. The success of the planned price hikes will be seen in September or October at the latest. Producers have backed up their efforts to raise prices with massive production curtailments.
Germany is reportedly a hive of activity, having been the starting point for the price negotiations. Merchants and producers have indicated that prices were set to rise in late August and September to pre-vacation period levels, market watchers said. Suppliers have been able to squeeze some of the increases through already. Prices for coated woodfree sheets improved by DM 50/tonne at the bottom end of the range in July, having dipped by DM 50/tonne in June. Prices for coated woodfree reels remained steady in June and July. 
French prices dropped by FF 100-200/tonne in July and levels slipped by a further FF 100/tonne in August. June saw no price movements, but some levels eroded by FF 100/tonne in May. One supplier to the French market indicated it will raise prices by around 5% in October. But at least one buyer gave the move the thumbs down, saying, "I will not accept any increases."
In the UK, coated woodfree reels slid by ?10/tonne in June and both reels and sheets fell by ?20/tonne in July. The UK market continues to be difficult for suppliers. One buyer indicated there has not been much buying activity in reels and as a result, some producers have tried to attract more business by lowering prices.
Italian levels have also weakened. In July, prices for coated woodfree reels slid by ITL 50-100/kg and offset sheets by ITL 50/kg. There have been rumors of offset sheets being offered at ITL 200/kg below regular levels on the spot market.
Soft demand has taken its toll on the coated woodfree sector across Europe. Several suppliers admitted that there has been a reduction in end-user demand. On top of that, the market became even quieter due to the mid-year vacation period. 
Dwindling advertising expenditure is one major culprit behind the lack of orders, along with the drop-off in dot.com initial public offerings (IPO). Advertising budgets have been cut and the need to print IPO information material has disappeared, as there have been fewer dot.com companies listing on the stock exchanges this year, market watchers said.
There is light at the end of the tunnel though, as some sources have already reported healthy order books for September. One player indicated that the market has reached the bottom, but said the burning question now is how long the market will stay there. 
The arrival of the euro in January 2002 is expected to boost demand, sources reported. Governments and monetary institutions will print leaflets and brochures on the adoption of the currency and a fair amount of these orders is about to trickle through to printers and producers.
Some papermakers are pinning their hopes on revived advertising budgets, as spending on this has a tendency to rise in the second half of the year. Although one printer said the current printing situation is "very grim", he expected the market to bottom out in August and then turn upward when the catalogue season kicks in during September.