BRUSSELS, Aug. 10, 2001 (paperloop.com) - Several European paper producers, together with South Africa's Sappi, have taken severe downtime in the second quarter to prevent paper and board prices from plummeting due to weak demand. 
Sappi has taken massive downtime measures to battle adverse trading conditions in the coated fine paper market. The company took 150,000 tonnes of coated woodfree paper out of the European market during its third quarter ending June 30, which equals one week per month. The group's worldwide total curtailments for the period reached almost 250,000 tonnes of coated fine paper. Sappi will continue to cut capacity in its fourth quarter ending September 30, but the total tonnage may not be as high as in its third quarter. 
Stora Enso has also curtailed production in an effort to try and maintain prices. The company took 558,000 tonnes of paper and board out of the European and North American markets during the second quarter. Of that, 342,000 tonnes was market-related. Stora Enso does not foresee price pressure easing over the next few months and expects further market related curtailments will be necessary. The production cuts took 61,000 tonnes of magazine paper out of North America and 75,000 tonnes out of the European market. Fine paper output was slashed by 93,000 tonnes in Europe and 63,000 tonnes in North America. Packaging board production was cut by 50,000 tonnes. 
UPM-Kymmene has followed a policy of "strict inventory management" in order to defend prices against erosion in the face of slack demand. The company's global market related cutbacks totaled 410,000 tonnes in the first six months of this year, with 290,000 tonnes of downtime taken in the second quarter. A company spokesman would not reveal the breakdown for each grade but said, "There is no big difference between publication paper and fine paper." UPM-Kymmene indicated that coated groundwood prices are still under pressure and said the company will continue to wield the downtime sword if necessary. 
M-real also plans to continue cutting fine paper production in the third quarter, following massive downtime measures in the second quarter. M-real chopped its total paper output by 245,000 tonnes during the April-June period, of which almost 200,000 tonnes was fine paper. Total fine paper downtime for the January-June period reached 300,000 tonnes. The producer's capacity utilization ratio for coated fine paper slumped to 80 percent in the first six months of this year and the figure for uncoated fine paper stood at 93 percent.
Price rise push
While M-real has taken aggressive measures to balance production and demand, the company has also been trying to improve coated woodfree prices. Negotiations to raise indent prices for coated woodfree paper in Germany have been followed by similar measures in France. The company is confident that it will be successful in its plans to bring the weaker indent levels closer to stock prices.
Sappi has also increased indent prices for coated woodfrees but stock prices have remained unchanged. "Indent prices have slipped slightly, we brought them back to where they were before. So there hasn't been a general price increase for coated woodfree paper in Europe," the company's executive chairman Eugene van As clarified. Sappi does not foresee a general price increase in the near future.
	Paper Downtime in Europe April-June		
	Volumes	Grades(200,000 tonnes is woodfree paper)	
M-Real	245,000	paper	
Sappi	150,000	CTD wdfree	
Stora enso	75,000	magazine	
Stora Enso	93,000	wdfree	
UPM-Kymmene	290,000	magazine and wdfree	
UPM Kymmene is reporting global downtime