Industry Reports

Deutsche Bank Reports Summaries

080509 Deutsche Bank Report - Dr. Paper's Weekly Wrap Up (5/9/08)

Deutsche Bank - Equity Research

* More of the same.  Weak demand & higher input costs squeezed 1Q earnings for AbitibiBowater, Domtar and Louisiana-Pacific.  We reduced our price targets for ABH (from $16 to $10), UFS (from $14 to $10) and LPX (from $16 to $12).

* 560K/tons of linerboard capacity were idled last weekend.  A deadly explosion at an IP mill in Vicksburg, MS could close the mill for months.  Vicksburg represents about 2% of NA linerboard capacity.  The outage raises the probability of a late summer price

increase.   US regulatory approval for IP's acq'n of Weyerhaeusers' pkg business is also constructive.

* 820K/mtons of pulp capacity idled.  Pope & Talbot was forced to idle 2 mills in British Columbia and 1 in Oregon after a deal to sell the mills to Indonesia's Sinar Mas Group collapsed. Pope & Talbot has been operating under bankruptcy protection since late last year.