Kraft Paper Weakens
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A two-yr run-up in prices is over. Kraft paper markets have weakened and prices are falling. Trade papers are reporting a $30/ton m/m decline in estimated extensible sack kraft prices (December North American kraft paper is at $1,120 - $1,140/ton, +7.6% y/y), with a possibility of further declines in January, and 70-lb and 30-lb grocery bag prices were both down $30/ton m/m, Wilde reports. The key issue, he points out, is weakness in Europe and its ripple effect on domestic supply/demand balance. "Reports suggest European spot prices are ˜$50/ton below domestic levels. Natural multiwall prices were flat in December. KapStone's efforts to implement its $50/ton kraft paper price hike by the first quarter of this year looks increasingly difficult to us," Wilde says.
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