Archive for December, 2009

Happy New Year

About this time every year, my son Duke sends me Dave Barry’s Year in Review. Great writer; I love his humor. The 2009 Year in Review  will be my New Years “card” to you.

Everyone have  a happy and safe New Year. Back on Monday.


Market Update: Newsprint and SC-A

We don’t have the November AF&PA data for coated grades yet so another short update will be provided next week. Since Reel Time is not published this month, we decided to provide these mini-updates.

Newsprint: Publishers consumption in November was down 20.6% (y/y), and is now off by 24.6% through November. This is the best monthly (y/y) comparison since October 2008. These year-over-year comparisons will continue to improve. The December decline will be under 20%, and there is a good chance that declines will moderate to under 10% by February.

Offshore exports in November (177,000 tonnes) set the high level for 2009 but were still off  (y/y) by 12%. Several months ago we forecasted that (based on anecdotal reports) the 9-month slump for offshore exports was over, and that is being confirmed by the data. North American exports in 2010 will be much stronger than has been the case in 2009.

SC Grades: North American demand for SC-A  in November (116,800 tons) was up 3% (y/y) but down 12.4% (16,500 tons) from the previous month. This is disappointing data for producers. After a very good October, North American shipments to the domestic market were less than full capacity again in November.

North American SC-A imports were much stronger than earlier this year (33,000 tons) but still off by 14% (y/y).

North American SC-A exports blossomed this spring for the first time ever. Exports were 5,500 tons in November, about the average of the last half-year. This is a big help to the market – occupying roughly 4% of  North American SC-A capacity.

We will save our forecasts,  and pricing discussions for paying customers.

Senator Baucus Drinking on Duty?

Senator Baucus was speaking on the Senate floor recently (berating Republicans for not supporting health care “reform”) when he inadvertently made the case for a new amendment to the health care bill – mandatory drug testing for congress. It certainly appears that Baucus was under the influence of something – but you be the judge. No one could argue with the fact, however, that  Baucus made former president George W. Bush seem eloquent, by comparison. Of course Bush was clean and sober by the time he was President, so he had an unfair advantage.

Two videos from YouTube follow. The first has a few extra props for humor. It is only 27 seconds long. But just so you know the humorous video did not take license with the words Baucus spoke, the full 5 minute version is also attached. There are other versions on YouTube as well. Just search…Baucus,drunk .

Pulp Prices Near 2008 Peak

Higher pulp prices result in higher costs for non-integrated coated and other value-added paper producers. These higher costs do not have a significant impact on paper prices (see Absolute Truth #1), but do raise the pricing floor for paper somewhat, and this limits how far prices can fall in an over-supplied market. Obviously, the paper grades that use the highest percentage of kraft fiber are effected most seriously.

U.S. pulp prices have oscillated wildly over the last few years. After peaking in August, 2008, at $885/tonne, prices plummeted to $640  in just eight months. Now, after another eight months, pricing has nearly reached the 2008 peak again. Prices in December average about $830 and another $30/tonne has been announced for January.

As more supply comes into the market (re-starts primarily), and China eventually reduces its purchases, this strong market will end.  However, that will not occur during the next several months, and maybe not even until the second half of the year. 

Attached is a very interesting one-page monthly pulp update for November – courtesy of Equity Research Associates. 091223 Pulp Shipments Up Inventories Down

CBS Reports on Health Care Bill Corruption

I had intended the Holiday Greetings post to be the last for the Christmas week.  However, we have been covering the fraud associated with the health care bill and this three-minute video from CBS news is important. That even CBS is beginning to cover the story offers a little hope that the public can eventually find its outrage. I hope you will  listen to this report – and pass it on too.

Back on Monday.

Happy Holidays

I don’t know who “put up” this Christmas decoration and wrote the note at the bottom, but I certainly appreciate his sense of humor.

“Good news is that I truly out did myself this year with my Christmas  decorations. The bad news is that I had to take him down after 2 days. I had more people come screaming up to my house than ever. Great stories. But two things made me take it down.

First, the cops advised me that it would cause traffic accidents as they almost wrecked when they drove by.

Second, a 55 year old lady grabbed the 75 pound ladder almost killed herself putting it against my house and didn’t realize it was fake until she climbed to the top (she was not happy). By the way, she was one of many people who attempted to do that. My yard couldn’t take it either. I have more than a few tire tracks where people literally drove up my yard.”

Chicago Politics Gone National

The senate health care bill is 3116 pages long, including 383 pages of “home-site provisions”  added at the end. This is where most of the taxpayer gifts are included. The list is long and very,very expensive. The only Republican to gain “juice” from the health care bill is Senator Snowe of Maine  (see  Less Than Free Enterprise posted on December 7). It appears that even Senator Snowe will not vote for the final bill, however,  in spite of being summoned to the White House twice recently so the President could remind her of the black liquor benefits he and the Democratic leadership secured for her.

These days, it pays to be a blue state. For example, there are billions of dollars of supplemental medicare funds flowing to democratically controlled states – not a penny to republican states. Michelle Malkin is a columnist who has listed, in Part 1 and Part 2, many of the special contributions flowing to states with Democratic senators.

It is true that pork barrel politics  is not exclusive to the Democratic party or this administration. Still, congressional graft during the Clinton and Bush years now looks like chump change. The blatant abuse and the  billions of dollars  involved is unprecedented. This type of corruption is, by the way, what Senator McCain has made a hot button issue since he first entered office, and what he vowed to end if he had been elected President. 

The Democrats are unapologetic. The following paragraph is excerpted from a Fox story, The Price is Right?

“People fight for their own states. That’s the nature of a democracy,” Sen. Amy Klobuchar, D-Minn., said on “Fox News Sunday…”This is just part of the normal legislative process,” said Jim Manley, spokesman for Senate Majority Leader Harry Reid. 

I don’t think so. But as long as media oversight is limited, and the public complicit, or at least listless, then pork-barrel spending will become more and more egregious.