Publishing papers bounce back after collapse

Demand for coated woodfree paper slumped a massive 56.4 percent in the December quarter as merchants holding high-level stocks held off buying  anticipating further currency declines.

According to Tim Woods of industry bible IndustryEdge, the slowdown was compounded by “intense pressure from currency movements and weak domestic demand.” In a detailed article in the latest publication he said imports fell to their lowest quarterly level in more than five years

Imports of Reels C1S declined a massive 56.4 percent against the longer-term quarterly average, while Reels C2S fared relatively better, declining just 19.9 percent. The result was more muted for sheeted products, with sheets C1S declining 29.8 percent from the average and sheets C2S following reasonably closely, declining 26.9 percent.

 December imports were down 41.8 percent on the prior month at just 8.5 kt, less than half of the longer-term monthly average.

Other than the smallest volume imports (CWF Reels >150 gsm), the other major sub-grades experienced very large declines on a quarter-on-quarter basis, but more importantly, against the average of quarterly imports since the March quarter of 2009.

Imports of CWF Reels <150 gsm were 31.6 percent lower than the average quarterly volume, recording just 13.3 kt for the quarter.

However, latest figures reveal a strong recovery in January 2015, with monthly deliveries well above average at 22 kt.

A market-leading importer told IndustryEdge that the steep fall in December was driven by “soft demand, merchants holdings of stock reaching too high a level and the expectations of further currency depreciation.”

Essentially, the market took a short holiday in 2014, says Woods, who warns that “fragility in the market is plain to see.”

Meanwhile, across the Tasman, imports of printing and communication papers to New Zealand slipped 3.5 percent in calendar 2014 compared with 2013, falling back to 176.2 kt.

“If there is a signal coming from this import data, it may be that in New Zealand, the use of printed material for general office and business purposes is declining, with switching to direct printing on cut reams increasingly prevalent,” says Woods.