P&W Grades to Continue Decline
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Wilde says that Deutsche Bank is also trimming its FY12 price forecasts for most North American printing and writing (P&W) paper grades, with the biggest decline in uncoated free sheet (UFS). "We're now forecasting FY12 50-lb offset rolls at $870/ton, -$120/ton relative to our earlier forecast and -$69/ton versus Deutsche Bank's estimated FY11 average.
"FY12 20-lb repro bond is trimmed to $1,035/ton, -$115/ton relative to our earlier forecast and -$56/ton versus our FY11 average. A number of factors are at work. UFS demand remains weak. In August, shipments were down 2.9% y/y (ytd -2.8% y/y). Not surprisingly, there appears to be excess supply in the market. At the same time, falling pulp prices could create some ripples into UFS prices. The recent strengthening of the U.S. dollar against the euro could also pull more imports from Europe," Wilde explains.
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