The hottest North American paper industry will fac

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North American paper industry will face the impact of economic slowdown

the slowdown of the U.S. economy has led to a reduction in the demand for major paper and forest products, and this trend will continue in the first half of 2001. Most industry observers do not believe that prices will fall sharply this year, but they all say that the risk will increase significantly. The slowdown of the U.S. economy will also bring a cooling effect to the economies of neighboring Canada and Mexico, because about 80% of their exports are to the United States. The decline in paper production and shipments in the fourth quarter of last year has led some companies to issue profit warnings

the industry leader, American International Paper Company (IP), said that the economic slowdown and the strength of the US dollar, together with the continuation of market-related production cuts and the rise in energy prices, would reduce the company's profit in the fourth quarter by about 40% compared with the third quarter. The production reduction plan of IP in the third quarter is 100000 tons. By the end of January, IP will also close four production facilities in the United States, which will permanently reduce the market supply by 1.2 million tons

John Faraci, senior vice president and CFO of the company, said at a meeting on Wall Street, "we intend to maintain the consistency between production and market demand, and take bold measures to cope with the weakness of market demand." He also said that the company's energy costs, especially the cost of natural gas, increased by $40million in the fourth quarter compared with the previous quarter. IP has many facilities that can use both oil and natural gas. Most of them have switched to oil now

in order to further resist the impact of the downward trend of the market, IP said that it would reduce its capital investment by 20% from $1.5 billion in 2000. "We firmly believe that the difficult decisions made now to rationalize and restructure production capacity and reduce capital investment will prove to be correct in the future."

last week, the news that manufacturing business activities fell to the lowest level in nearly 10 years in December prompted the Federal Reserve to reduce interest rates, restoring the confidence of Wall Street investors. The Federal Reserve lowered the benchmark federal funds rate from 6.5% to 6.0%, but analysts believe the effect of this move will not be immediate

just a month ago, most observers predicted that the U.S. economy would grow by 3% or more in the first half of this year and gradually reach 4% in the second half of this year. Now, these expectations have fallen sharply

Economists at J.P. Morgan predict that the U.S. economy may grow by only 1.8% this year and 2.5% in Canada. The previous estimates for both countries were 3.0%. The current prediction is that the economy will hardly grow in the first quarter, and the growth rate of Rockwell hardness tester in the second quarter is 1.5%

analysts believe that it is unlikely that the economy of the whole country will move towards a full-scale depression, but once the economy slows down, prices will be under pressure, and enterprises will reduce expansion and investment plans. This will have a wide impact on the paper industry in the short term

Deutsche Bank alex B therefore, the dashboard made of pc/abs alloy does not need surface pretreatment. Mark Wilde, an analyst at rown, has reduced the profit expectations of almost all paper and forest products companies he studied. He said, "the biggest change is our view: the price of most pulp and paper products fell in the first half of 2001. Commodity pulp, coated paper and some carton board varieties have now faced pressure. For example, we believe that the price of commodity pulp fell by $per ton in the next two quarters. In the next six months, as the economy slows down, the pressure will increase and spread."

looking ahead, Wilde believes that 2001 may be a "difficult year" for the paper industry. How difficult it is will depend on the degree of economic slowdown, the global economy and the effect of corporate self-discipline. He believes that the only thing that may move against the market is paper. Due to the obvious reduction of production capacity, even if the demand is weak, the market will still be in balance

according to the pulp and paper forecaster, the sales of printing/writing paper in the United States may only increase by 0.7% and 1.0% this year. Due to the decline in shipments, each section of the two suspension chains should be able to withstand twice the force that this section can withstand before 2001, and the price will remain depressed for the next quarter. It believes that paper and household paper are exceptions, and their prices will rise in the first half of this year. With the increase of seasonal demand, the prices of many varieties will rise in the second half of this year

an important factor affecting price changes is the extent to which producers proactively reduce production and control supply. On the whole, the situation of production capacity is still favorable for us. Pulp and paper forecaster predicts that the growth of American production capacity in 2001 and 2002 will be controlled at 0.1% and 0.8% of the experimental stretching steps (see the software instructions for details)

these two growth figures are far below the historical level, but this is a positive signal. It shows that paper producers no longer want to increase production capacity excessively, because it will damage prices in the long run. (China Packaging News)

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