EUROPE:
Tuesdays 12:00 am	31.8.2010		From prev. week	From beg. of year 2010
PIX NBSK	USD 974.19		USD -1.18	USD+175.56	Exchange rates
PIX NBSK	EUR 766.29		EUR  -1.05	EUR+211.92
PIX BHKP	EUR 684.34		EUR -0.30	EUR+198.43
PIX BHKP	USD 870.00		USD  -0.25	USD+170.00
PIX LWC	EUR 652.01		EUR +4.24	EUR - 15.80
PIX Ctd WF	EUR 712.41		EUR +2.32	EUR  +44.06
PIX A4 B-copy	EUR 842.06		EUR  +1.52	EUR + 67.55
PIX Newsprint	EUR 413.25		EUR  +0.75	EUR - 95.88
PIX Kraftliner	EUR 534.00		EUR  +0.03	EUR+117.96
PIX White-top Kraftliner	EUR 702.12		EUR  +3.53	EUR +80.24
PIX Testliner 2	EUR 408.96		EUR  +0.10	EUR +68.23
PIX Testliner 3	EUR 392.32		EUR  +0.08	EUR +71.13
PIX RB Fluting	EUR 378.27		EUR  +0.09	EUR +70.01
PIX OCC 1.04 dd	EUR 115.53		EUR  +0.31	EUR +39.66
PIX ONP/OMG 1.11 dd	EUR 149.13		EUR  +0.12	EUR +60.50
USA:					Exchange rates
Tuesdays 4:00 pm	31.8.2010		From prev. week	From beg. of year 2010
PIX US NBSK	USD 999.78		USD   0.00	USD +169.78
PIX US Newsprint 30 lb	USD 604.75		USD +1.43	USD + 85.66
PIX US Newsprint 27 lb	USD 644.56		USD +1.83	USD + 90.74
CHINA:
Tuesdays 9:00 am	31.8.2010		From prev. week	From beg. of year 2010
PIX BHKP China	USD  782.13		USD -1.07	USD +120.04
PIX BHKP China	RMB 5317.11		RMB -0.96	RMB +797.01

Conversions from USD to EUR (new in NBSKP) and from EUR to USD and USD to EUR in BHKP have been made with the ECB rate of the Friday preceding the publication of the indexes.

Please note! FOEX Indexes Ltd. has registered the PIX benchmark/PIX index trade-marks. Thus any commercial use of the PIX indexes, be it through financial institutions, brokers or bilateral or internal deals between e.g. pulp and paper companies, is subject to permission by trade-mark rights owner FOEX Indexes Ltd.  Please contact us for further information.

Reception during the Pulp Week - Those planning to come to this year’s Pulp Week in London in November, please mark in your calendar that FOEX together with Pöyry will host a Cocktail Reception on Wednesday November 10th, 2010, between 5.00pm – 7.00pm at Simpson's-in-the-Strand. Invitations will be sent in due course.

Market Comments August 31, 2010

FOEX Indexes Ltd has launched a new monthly price index for industrial wood pellets for the Nordic market, PIX Pellet Nordic CIF. The new benchmark will be published every third Tuesday of the month on the PIX BIOENERGY home page, please click on the navigation bar to the left. Please click for PRESS RELEASE.  (Nov 12, 2009)

US NBSKP - Market pulp shipments to the North American market were down in July by nearly 7% from July 2009 and down also against June 2010. The cumulative numbers are still positive, however, up by 9% against the first seven months of 2009. Order backlogs extend in some cases to several weeks which has slowed down the application of the 30 USD/ton decrease announced from August 1 by several suppliers. After the removal of the top and bottom 10%, our PIX NBSKP US index remained unchanged at 999.78 USD/ton. (Aug 31)

US Newsprint - North American newsprint demand decreased by 8.5% in July. This brought the cumulative January-July change to -2.7%. Exports continue to be well above those of last year, up by 20% in July and by +51% year-to-date. The operating rates averaged 86% in July and 90% over the first 7 months. The PIX US Newsprint 30lb benchmark advanced by 1.43 USD, or by 0.24 %, to 604.75 USD/ton and the 27.7lb benchmark gained 1.83 USD, or 0.28 %, and closed at 644.56 USD/ton. (Aug 31)

General economy: USA - The US Q2 GDP growth was revised down to just 1.6% (annualized). Most forecasters have lowered their Q3 forecasts as well. Latest housing numbers were staggeringly weak. The Fed has announced their readiness to stimulate the economy anew in case of a further deterioration. July consumer spending numbers finally saved the day with a piece of good news recording the strongest growth (+0.4%) in 4 months.

Europe - While the US growth is subsiding, the EU economy is presently recovering at an improving rate. The fortunes continue to be divided within Europe. Germany powers ahead with major gains in exports and GDP-growth numbers have been revised upwards. In France they were revised downwards, however. UK does well for the moment but risks losing steam at any moment. With US economic growth getting more fragile, 2011 outlook is dimmer also for Europe, especially if the proposed austerity measures are applied in full.

Japan - The weakness of the US economy has weakened the USD against Yen. As virtually all of the recent economic growth seen in Japan has come from exports, the excessive value of the Yen is a ticking bomb. The loss of competitiveness will cut down the only strong growth item. It also steepens the deflation rate. Japan will use over 10 billion USD worth of reserves to introduce a number of measures to ensure the continuation of the recovery. With the huge debt (200% of GDP), Japan's further stimulation options are limited.

China - The country has succeeded in taming the inflation threat. With slightly stronger Yuan, deflation may actually be a bigger risk. After years of near 10% growth, wages and salaries are beginning to rise. And the increasing income levels of the workers will help China internally as well. There would be growth through higher domestic consumption and fewer problems with worker protests which have increased in the past year or two as the share of the salaries of the total "cake" has fallen from above 60% to barely 50%. (Aug 31)

Paper industry - The performance of the European and North American paper industry in July was mixed. Exports outside these regions continued to show solid growth but the regional shipments showed in many grades less growth over July 2009 than what the previous months had recorded. In some individual grades, e.g. SC in Europe and uncoated free sheet in the US, July 2010 shipments were actually lower than those in July 2010. In printing and writing papers the coated grades showed more growth than the uncoated but the comparisons were against very soft numbers in mid 2009. The large US packaging sector performance was somewhat weaker than expected. With box shipments down from 2009 and inventories up, the pricing initiatives have not got a full support, at least for the time being. In many other grades, paper and board prices continued to move up, mainly from the tail-end of earlier announced increases. In China, after struggling for several months, paper prices have moved up in August. (Aug 31)

NBSK pulp Europe - BSKP production volumes continue to move up against the volumes produced in earlier months from re-starts. The PPPC statistics showed BSKP shipments in July fractionally down from July 2009 but up, cumulatively, by 2.4%. Inventories of market pulp at the producers were up by 4 days for the total. Further down the chain they remain very low. European consumer stocks, reported by UTIPULP were at mere 640 000 tons, 15% lower than a year ago. Port stocks moved up 30 000 tons from June 2010 but were still very low, 24% lower than a year ago. The USD was virtually flat (weakened by 0.02%) against the Euro. Our PIX NBSK index retreated by 1.18 USD/ton, or 0.12%, and closed at 974.19 USD/ton. The EUR-price decreased by 1.05 EUR, or 0.14%, to 766.29 EUR/ton. (Aug 31)

BHK pulp Europe - BHKP shipments continued to be relatively weaker than those in BSKP. PPPC statistics showed them down by 12% against July 2009. The cumulative delivery data over the first 7 months was 1.4% below 2009. Producer stocks were up by 6 days. The low level of port and consumer stocks in Europe applies to both BSKP and BHKP. The eyes of the market are on China, both in terms of demand and of supply. The 0.02% strengthening of the EUR against the USD had a minor impact on prices in euro-terms. The PIX BHKP index value in euro retreated by 30 cents, or by 0.04%, to 684.34 EUR/ton. The PIX BHKP index value in USD eased down by 25 cents, or 0.03%, and closed at precisely 870.00 USD/ton. (Aug 31)

BHK pulp China - The suspension is mounting in China with producers staying firm at the levels they announced for August - typically 780/800 USD/ton for Latin American eucalyptus pulp - and with buyers trying to hold back or find tonnage at lower price levels. Stand-off positions between sellers and buyers reduce, at least for the time being, the price volatility and reduce the volumes sold. The PIX BHKP China index retreated by 1.07 USD, or 0.14%, to 782.13 USD/ton. RMB weakened this time by 0.1% against USD. The conversion of the USD value of the index into the Chinese currency, using last Friday's exchange rates, meant a decrease of 1 RMB, or 0.02%, to 5317.11 RMB/ton. (Aug 31)

Newsprint - July statistics by Cepiprint on total European shipments showed a 2.7% increase for the month and a 4.8% upswing in the first seven months comparison. Exports outside the region continued to grow, this time by 5.9% which was less than in the previous months. The regional deliveries improved by 2.0% in July. Estimated European demand grew, however by only 0.2% for the month as imports from outside the region showed a decline. The estimated European demand was up by 1% over the first 7 months. The 0.1% weakening of the EUR against the weighted basket of non-EMU currencies gave a slight upward push on the benchmark. The PIX Newsprint index rose by 75 cents, or 0.18%, and closed at 413.25 EUR/ton. (Aug 31)

LWC - European total shipments of coated mechanical reels improved by 13.0% in July, driven mainly by the 58.2% increase in exports but supported also by the 4.2% gain in regional deliveries, according to the latest CEPIPRINT figures. For the first seven months, total shipments were 15.8% ahead of 2009, with exports 41.4 % above those last year and shipments within Europe, and the estimated European demand as there were no imports, up by 11.2%. A small upward push came from the 0.1% weakening of the EUR against the weighted basket of non-EMU currencies. The PIX LWC index rose by 4.24 EUR, or 0.65%, to 652.01 EUR/ton. (Aug 31)

Coated woodfree - Producers have reportedly continued to enjoy relatively good order books. The delivery times of coated paper in Europe can stretch up to two months for some specific grades in some countries. In order to improve profitability in an environment of recently escalated production costs, several producers have separately announced another price increase initiative for September. A weakening of about 0.1% of the EUR against the basket of non-EMU currencies had a positive impact on the benchmark. The PIX Coated woodfree benchmark climbed higher by 2.32 EUR, or by 0.33%, to 712.41 EUR/ton. (Aug 31)

Uncoated woodfree - The woodfree paper shipment numbers are still not available for June or July. Production statistics over the first half of 2010 showed an 11% gain with good support from exports outside the region. Paper producers' profitability is weak and their need for improved prices evident in the wake of the long and substantial hike in the raw material prices. More price announcements for September have been made public. The weakening of the EUR against the weighted basket of non-EMU currencies contributed a modest upward push on the benchmark. The PIX A4 B-copy index advanced by 1.52 EUR, or 0.18%, to 842.06 EUR/ton. (Aug 31)

Containerboard Europe - July numbers for the US box and containerboard market turned out to be weaker than expected as the shipments of boxes were down by 2.2% from July 2009 and inventories, even if still low, moved up for a second month in a row. Containerboard price increase initiatives meet resistance as at least one box producer has announced that they will not accept the increase, at least not for now. In Europe, markets have remained firm and price increase initiatives, typically by 50-60 EUR/ton depending on the grade and market from September. Exchange rate development had this time only very minor - from producers' point-of-view predominantly positive impact. The EUR strengthened by 0.02% against the USD and weakened by about 0.1% against the weighted basket of non-EMU currencies. The PIX Kraftliner index gained 3 cents, or 0.01%, and closed at 534.00 EUR/ton. The White-top Kraftliner index moved up by 3.53 EUR, or by 0.5%, to 702.12 EUR/ton. PIX Testliner 2 moved 10 cents, or 0.02%, higher to 408.96 EUR/ton. The PIX Testliner 3 index inched up by 8 cents, or 0.02%, to 392.32 EUR/ton and the PIX RB Fluting index advanced by 9 cents, or by 0.02%, and closed at 378.27 EUR/ton. (Aug 31)

Recovered Paper Europe - The packaging material demand appears to have strengthened in China and, consequently, both the demand volumes and prices of OCC have moved up in the domestic market. This has impacted already also the export prices, which have headed higher in the European and US ports. Our indexes both showed again a limited increase. The PIX OCC 1.04 dd index moved up by 31 cents, or by 0.27%, to 115.53 EUR/ton. The differentials between OCC and end product prices narrowed modestly: against Testliner 2, the gap contracted by 21 cents to 293.43 EUR/ton, against Testliner 3 it came down by 23 cents to 276.79 EUR/ton, and against RB Fluting it narrowed by 22 cents to 262.74 EUR/ton. The PIX ONP/OMG 1.11 dd index moved up by 12 cents, or by 0.08%, and closed at 149.13 EUR/ton. The price differential to our PIX Newsprint index widened by 63 cents to 264.12 EUR/ton.  (Aug 31)

Utipulp European pulp consumer July/10 figures; inventories 640 000 tons, down by 27 000 tons or 4.0% from June/10,  and down by 115 000 tons or 15.2% from July/09. Consumption in July/10 totalled 1 033 000 tons, a decrease of 38 000 tons or 3.5% from June/10, but an increase by 39 000 tons or 3.9% from July/09.  Source: Utipulp  (Aug 30) 

Global chemical paper grade market pulp shipments in July/10 were 3.338 million tons, down by 5.6% from June/10 and down by 6.3% from July/09, at the delivery rate of 88% of the P.M.C. Inventories at the end of July/10 stood at 29 days, up by four days from the level in June/10.  Source PPPC. (Aug 24)

Pulp inventories at European ports increased in July/10 by 26 900 tons or 4.1% to 686 300 tons compared to June/10 inventories of 659 400 tons. Compared to July/09 the port inventories were lower in 2010 by 218 300 tons or by 24.1%.  Source: Europulp  (Aug 16)

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