A tale of two markets.

The paper stock market appears to be breaking out into two different markets: the domestic market, which has remained stubbornly flat, and the export market, which has boosted the overall condition for many paper stock grades. For paperstock dealesr, the result has been a fairly upbeat market, with many domestic mills having to raise their prices for raw material to compete with offshore orders.

While there has been a fairly strong run-up through most of last year, there doesn't appear to be any significant retrenchment in markets. New capacity continues to come online overseas, especially in China. The result has been a very strong demand for many grades of recovered fiber.

Mixed paper has been generating a significant amount of demand in the past several quarters. Several years ago this grade was met with indifference at best. However, with demand swelling, this grade has generated a tremendous amount of interest. Prices have rocketed to levels close to those of old corrugated containers. With the availability of many bulk grades already soaring, some mills are increasingly interest in blending greater amounts of mixed paper into their fiber lines.

On the domestic side, signs indicate that markets are firming up. While production figures have been flat to slightly down during the past several years, the significant amount of downtime and mill closures is starting to bring the North American market back into balance.

In the newsprint market, Abitibi-Consolidated recently announced that it would take indefinite downtime at two of its newsprint mills and permanently close two other paper mills. By cutting back production, the paper company, the largest newsprint producer in North America, hopes it will bring balance to the newsprint market.

(Additional news on paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)

U.S. Producer Price Index/Mixed Paper

Nov02                         506.8
Dec                           483.7
Jan03                         468.3
Feb                           468.2
March                         530.3
Apr                           608.9
May                           605.4
June                          605.6
July                          554.5
Aug                           527.0
Sept                          557.0
Oct                           598.0
Nov                           584.8

Source: U.S. Bureau of Labor Statistics (Index based on 1982 avg. price
as 100)

Note: Table made from bar graph.