Industry Reports

Deutsche Bank Reports Summaries

080514 Deutsche Bank Report - April Preliminary P&W Shipments

Deutsche Bank - Equity Research

* Another tough month for uncoated white paper. "Preliminary" April printing & writing paper shipment figures point to a 10% y/y decline in shipments of uncoated free sheet papers. This decline mirrors a similar decline in March. While disappointing, this number isn't a "shocker" based on our conversations with the trade. YTD uncoated free sheet volumes are off 5.2%. For those looking for consolation, we have received reports suggesting that business has recovered over the past two weeks. Nonetheless, the magnitude of these declines raises the spectre of further capacity closures in order to keep the market in balance. For the moment, we think that high market pulp and energy costs will serve to support UFS pricing in the US.

* Based on this preliminary read, coated paper shipments remain much healthier. The best comparisons continue in light-weight coated (also known as "coated mechanical"). LWC shipments were up 10.7% in April and are 10.4% on a YTD basis. Coated free sheet shipments were off 0.5% in April and are down 3.5% on a YTD basis. The key issue for coated paper is whether the slowing in the economy and reports of easing in magazine ad pages & catalog volumes will begin yielding weaker comp's.

* The smallest printing & writing category, uncoated mechanical paper, is posted some of the biggest gains. Preliminary April shipments rose 10.0% and are 13.1% on a YTD basis.