Date : 19/11/2009
Market demand in Europe improved substantially in Oct 09 and Nov 09. At present, price increased of Euro60-65 per ton seems to be effective. One of the key reasons for the success was low inventory holding at box plants. Most box plants are now replenishing the stock. The production curtailment and permanent shutdown of mills are also the key reasons that pushes paper prices upwards.
However, brown Kraftliners prices remained steady without any sign of increase. This is partly due to high stock due to last minute locked of orders from US mills before removal of black liquor subsidies.
Many believed that prices of KLB will follow suit in next 2 months once the inventory are used up. However, recycled containerboard prices were on the uptrend over the last 2 months. Most box plants reported that most paper mills are very firm with the prices increases. As such, many believed that Fluting and Testliner will continue to increased.
The critical time is in Dec 09, whereby it is a low demand season. My views are prices of Containerboard and Kraftliner board will maintain at present price level till next year. If mills miss the opportunity in Nov 09, chances of successful price increase in Dec 09 will be low.
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