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fe November 6, 2016 | Vol. 33, No. 42 New RISI News & Prices App Ey For more ino: wwwrsi.com/app ena ey Production Pre) cod ona | Fluff Pulp | 2018-2022 Did you know... that copying or electronic forward ing of this publication is illegal in Virwally every country around the ‘world? We rely on subscription fees to Support our worldwide editorial team legal copying hurts our abiliy 10 bring you the very best news = and may even subject you toa fine For information on discounted bulk subscriptions, please’ e-mail corporates com. (For general sub- Scrption and other inguires. contact info@risicom.) In This Issue Price Watch: UK 2 CEO interview Norske Skog 3 Mondi works on new PM 6 Papresa up for grabs 9 Europe top in recycing 9 PPI EUROPE PAPER, PACKAGING AND FIBER MARKET NEWS AND PRICES FOR EUROPE, THE MIDOLE EAST AND AFRICA European containerboard on uncertain ground ‘The autumn has fallen short of pectations for most European contain- erboard market players so fer, resulting, in a level of confusion and uncertainty ‘on what the rest of 2018 and the start of 2019 have in store, A late recovery of the market after the summer, September's high invento- ry levels and a jump in exports looked like evidence of an easing of market conditions. This autumn is just not as strong as the same period last year in the box business, sources agreed Prices for white-top kraftliner and semicchemical (SC) fluting started to move up in October, following weeks of discussions. But_ implementation was messy, especially for white-top krafttiner, depending on the country and the customer involved. Brown kraflliner and recycled con= tainerboard (RCCM) prices managed to hold steady in Q3 and the start of (Q4. Even though some sources saw a slight pick-up of activity in October, downward price pressure started to gradually build up in major countries. RCCM prices even began to erode in Italy in October. “The game is just starting,” said a supplier, Patchy white-top kraftliner hikes: Implementing Euro 40-S0itonne price hikes for white-top kraftliner as planned in September or October fas proven to be very challenging for producers, Sources said that some buyers stood strong against the increases, while some sellers were not persistent enough in pushing for the hikes. ‘As a result, nothing was secured for September deliveries, while @ Euro 20 tonne increase on average was only »»s continued on page 4 Pulp prices on hold again in Europe in October Pricing for both the pulp benchmark grades closed unchanged once again in Cctober. Buyers had pledged to target bleached eucalyptus kraft (BEK) pulp prices in particular, and by most reports there were more serious efforts to push levels down last month, But in the end sellers managed to hold their ground, according to market sources. ‘The perceived intransigence on the seller side when it comes to price is prompting increasing frustration among buyers, with several warning that producers are turning their backs ‘on customers and the situation on the paper market, where some said the risk of killing off demand is on the rise. Things were generally calmer on the long fiber side, though there were some reports of more pushback here on the part of buyers as wel, Still, most said October negotiations were relatively straightforward, with prices for nort tem bleached softwood kraft (NBSK) pulp remaining steady again at $1,230 tonne. Contacts continued to say that While there was some improvement in availabilty, the market remains bal- anced to snug, and at least a couple (of suppliers reported tight imternal inventories, ‘Tetsuya Hayashi -Hanwa Co.Ltd, 2018-11-14 BEK sellers hold their ground: Bol stered by improving availability, buyers ‘made a concerted push to chip away at BEK prices in October. Contacts said that setious negotiations actually took place, ‘a change fom previous months when the closing of business was more or less a formality. Market players were reported ly pushing for @ $30/tonne price cut, with some digging in ther hee's and declining to close business without a reduction up (o the last minute of negotiations. In the end, though, prices settled unchanged at $1,050/tonne, contacts said, ere was more diseussion (in Oc tober}, yes, but our position was clear. If ‘you want the pulp, the price is $1,050/ tonne. no exceptions.” said a large pro- ducer He said he sold all volumes as planned and that orders were “healthy.” ‘Another seller said that he had sev= eral customers insisting on a $30/tonne reduction but that they ultimately buc led. “They were arguing that invento- ries are higher, and they're correct to an extent, but internally, we are quite tight. Any higher stocks around, they don’t belong to us, so we were quite firm [in negotiations},” he explained, »» continued on page 6 PPI EUROPE PRICE WATCH: United Kingdom {GBPricane (unless atherwse note), Graphic paper and packaging pices are tee delivers, buyer ech, Katine pces are CIF. Prees for paper for ecyeing are ex works. Most recent prices Yoartoxear Werte Euro’ SSCOLTTS—CNTeg, GRAPHIC PAPER Reworrint? ag 435-490 400-562 435-400 a70-390 oan 2259 450-505 516-879 450-508 385-405 209, 40g 429-881 61 -632 439-851 403-430 240 523 Improves (68180) 405-535 588-613, 495-595 415-435 188, Uncoated mechanical $C rotograure els, $6.9 510-548 05 -625, 510-845 as5-405 122 SC rogue roe, 52-4 538-570 13-656 535-570 480-510 HH. SC oft reets, 8-9 510-545 585-625, 510-845 485-485 122 SC oft ees, 52-9 535-570 13-656 595-570 aeo-sio 18 Coatee mechanical [WC rotograwure reels, 60-9 08-620 ener 1585-620 §25-885 18 LE ofset els, 60-9 565-605 48-694 65-605 510-85 109 Uncoated woodtres ‘4 copy (8 rade, 809 720-830 08-982 720-620 n0-760 102. Ad copy (C grade), 80-3 750-800 60-917 740-760 s70-790 107 Offset ree, 609 700-820 834-040 770-810 700-780 103, Offa sheets, 80g 810-880 629-875 00-840 730-780 a9 ‘coated woodtree® Reels, 100-9 880-700 797-003 50-700 sio-o60 124 Shee's, 1159 760-800 en-917 780-800 70-740 108 PACKAGING P&B ‘Vigin ber eontainrBoara™ Untlescne water 1755+ 10-850 609-745 610-680 570-605, 12 Unbleaced eatiner, 1509 690-065 722.762 630-685 580-620, 70 Uneleachedkatiner 12553 638-680 728-760, 635-680 595-635 89 \ite-opiatiner, 14096 715-700 20-857 718-790 680-585 88 Recycled contanerboard Teaver 2 14049 575-600 650-688 575-000 525-880 8s Testner 3 409 555-580 698-685 555-580 05-530 a7 Fig, t00-3¢ 585-580 638-665 55-800 505-590 97 Futng, 809 575-508 650-682 575-595 525-545 93 Wit-oo tester, 409° 600-625 628-797 600-625 180-575 79 Cartonboard Coates dunex (602, 2709+ 570-1095 1112-1,255—_970-1,008 e40-1058 48 \We-nedchinboord (602), 3006+ 00-765 794-677 500-785 690-765 00 PAPER FOR RECYCLING * "02 - mined PBB era) 30-40 oe wad a7 aT 105 ot corugated conaners 70-80 0-103 78-95 70-90 00 {-1t-scried araphic paper fr denking 100-118 15-192 95-118 0-110 75 2.01 newspapers 120-195 138-185 118-138 100-720-189 2.08- colores woodtee magacnes 170-180 195-206, 170-100, 180-170 61 Muitgrade 165-185 09-212 185-185, 485-170 aa Noes 1. The Euro column reflects prices forthe most recent month n Eur curaney, calculated using ofc day exchange rat rom osnda.com, 2 Newsprint 48.8 assessments were discontinued in January 2918, SC-A oto and ofset 60g assessments were discontnued in Seplaiber 2018 3. Price rango ols standard double coated grades 4. rice are Cl for European and American pons. 1 rios are for uncoatod board witha brighinass of 150270 6 Paper fr reeycing nomenclature comes fem he Isto standard European qualies developed by CEPI and BIR, except for mulgrade! \whic's a Bond of coated and uncoated woodoa paper. DISCLAIMER \Whie he ifermaton contained in ths report nas been cbsined fom souroes beteved to be reliable, RISt does not warant or guaran the ac- ‘curacy and completeness ofthe iformaton. Al pcos are best estates of pies, and re composi prices as opposed io median of average pres, Actual transaction prices may vary. Tetsuya Hayashi Hana Co Lid, 2018-11-14 2 “D 2bie Fst nc Al nghs rebar. PPIEUROPE!November 8, 2018 PPI EUROPE Norske Skog CEO: PM conversions to packaging paper may follow After completion of the takeover by UK investment fund Oceanwood Capital Management, Norske Skog is now ready tw consolidate its postion inthe European Paper market. That means also possibly entering new business segments such as packaging paper. The firm's new financial situation, with a substantial eut ofits exter nal deb, wil allow for diversification imo ‘ew paper grades and to contin funding its parallel growth projects, as Lars Sperte, president and CEO of Norske Skog, said during a conversation with PPI Europe PI Europe: Is the company working fn a new long-term srategy or itis still relying on the previously-agreed grow projects only? Lars Sperre: The stategy forthe new Nocske Skog is pretty much consistent ‘with what we have worked on during the last two to three years, based on the sumption that the financial situation is now fully fixed. The strategy goes in two directions: fst, we will reinforce our posi= tion asa long-term publication paper pro ducer. We will look at ways to strengthen the core business, together with our supe pliets and our customers, by dealing with ‘every side of the business and making our mills as competitive as possible, Seeond, ‘we will continue to look for biomass and bioenergy solutions that will both reduce ‘costs for our ore business and also bring few reverses on the tp, PPI Europe: Will any of those proj- «ets be implemented soon? Lars Sperre: We already have theee biogas plants in Golbey (France), Sau ‘ebrugs and Skogn [Norway]. We have a ‘wood pellet plant in New Zealand thet produces 40,000 tonnesiyr and we are Tooking to expand the capacity to 85,000 tonnes/yr, In Boyer, Australia, we have already built a pilot plant w produce bio-based chemicals and we will move to tull-seale production. It will take more oF less one year to complete. And we also look to bio ‘chemicals projets at Golbey. ‘Saughrugs is running a project on R= beerbourd based on thermomechanical pulp. Hopefully the project will move ahead. We are also looking at bio-com- posites, pellets that could be used instead of plastics. {As for nanocellulose, we have a small case test peoduetion running. Nanocelhi= lose ean be used to enhance paper-based products, as a replacement for plastic goods and as a thickening substance in ‘Various produets such as paint or glue The list of usage for nanocellulose is auite long. This is development work that needs to go through al the stages of test ing and investments PI Europe: Are you looking at other potential growth areas outside paper? ars Sperre: No, this is our focus at the moment. PPI Europe: Did you take a decision fon the conversion of the Bruck il's newsprint machine? Lars Sperre: Bruck is one of the ean 4idates fora potential conversion, but itis rot the only one. We are looking at which fof our paper machines are more suitable ‘or conversion, We are running pre-stud- ies at the moment PPE Europe: Are ‘you still considering éoaversion towards lissue or are you also looking at some other races? Lars Sperre: Pack- aging grades could be one option, At the smomient, tissue isnot our ‘plan A anymore, PPL Europe: Oceanwood said thatthe market needs to consolidate. Are you look ing at potential mergers within the industry? Lars Sperre: (Oceanwood's stance] pairs withthe first point of our strategy, ‘which is our willingness to remain a leading player in the publication paper business, We will atively look for op- portunities to strengthen the European publication paper market PPL Europe: Is Norske Skog cormmit- ted to keeping all the existing paper mills running? Lars Sperre: Our aim is to enhance the competitiveness of the mills and work ‘on strategic options for them, PPI Europe: Ate you planning to go publicly listed again? 1s Sperre: At the moment, out for cass to maximize the benehits ofthe new financial situation by making our mills more competitive. Our debt t0 third pare ties has decreased fiom NOK 9.2 billion (SL. billion) to NOK 600 million while interest payments fl rom NOK 600 mil- lion to approximately NOK. 30 millon ‘This shows how dramatically improved ‘ur financial situation is und this, together ‘with our operations, allows us to continue tae a leading publication paper player. German printing association and trade union yet to reach labor deal Sill no white smoke signaling a deal be= ‘ween the German association for pining and media bvdm and the trade union ver dion the collective labor agrecment for the employees ofthe German printing industy. “The two parties met again on October 19 and October 30 but no agreement was reached and the fith round of negotiations will now take place on November 22 Employees at various printing companies vweat oa srike during the last few weeks to support verd's demands ‘Bydm said that employers offered the union a one-time payment of Euro 200 ($228) per person in November, linear increase of 2.4% in April 2019. a linear increase of 1.4% in April 2020 and a one- time payment of Euro 200 in February 2021 when the agroement is expected to expire The association linked this ofer with the PPI EUROPEINovenber 8, 2018 demand for @ binding eoadmap forthe re= ‘orm ofthe collective bargaining agreement (MTV in German). “Bydm offered to reine state the MTY for existing employment cox teats and to negotiate a new version of the collective agreement for new employment relationships,” the asociation sid. added: “Plus, opening clauses were offered for vol- untary company agreements for jb security and age-appropriate work, which would be in the ierest ofthe employees. In adaition, the employers were willing to aecept a large part of the eurent MTV for new hes.” Verdi rejected the offer saying that, in audition to a “miserable” wage offer, em ployers wat 0 alvide the workForoe in the printing industry by aa longer applying MEV foe new hives, The poisoned afer from employers is in no way acceptable tous. We will not allow any aya Hamua Cats 2019-1144 ‘2078 By, Ine Argh esas the print shops to have a two-class society among ther colleagues, in which the young- fer ones are much worse off” deputy veri chairman Frank Wereke commented. He added: "The collective agreement must p= ply tal. Also opening clauses, for example to reduce surcharges, reduction of holiday pay and annual performance as well asthe extension of working hours, eannot be ace cepted by vera.” “Meanwhile, bvdm sccused the ade Union of not showing a willingness to cam promise or advancing any counter-proposd, “Lam disappointed that ver is 50 frivolous in losing the chance to tenstale MTV for existing employment relationships,” bud negotiator Sonke Boyens commented. “The union s pursuing a destuctive blockade pol- icy if it continues to eal Fr tikes against, the interests of most ofits employees.”