Paper Maker New Page Opts for More Mill Downtime

Downtime is the operative—or perhaps, nonoperative—word for many paper mills during the latter half of this year. New Page Corp., the top producer of coated freesheet paper in North America, announced last week it plans to take about 40,000 tons of lightweight coated groundwood market-related downtime during the fourth quarter.

The company had announced on July 30 it would permanently close its Kimberly, WI-based mill at the end of August. The mill annually produces 500,000 tons of coated freesheet paper and employs about 475 workers.

Barry R. Nelson, senior vice president of sales for New Page, outlined the downtime in a Nov. 11 letter to customers. “This is in addition to previous announced closures and curtailments,” the letter says. “Continued weak market demand has made this curtailment necessary to preserve the balance between supply and demand.”

While the curtailment “will not be limited to specific paper brands or mills,” the letter continues, “operating plans across the New Page mill system will be adjusted to fulfill all customer commitments. With multiple machines qualified to produce lightweight coated groundwood papers, we are confident this downtime will be transparent to our clients.”

Dan Walsh, vice president of catalog/publication papers at distributor Bradner Smith & Co., says New Page’s downtime will occur at its Whiting mill and Biron mill, “but I don’t know how many days. The key, though, is the 40,000 tons, or 80 million pounds, which is significant—especially when combined with all the other downtime that has been announced over the past few weeks at other mills.”

Walsh refers to the “downtime syndrome” that will tend to limit supply of paper. “Limiting the supply will keep prices from trending downward further—at least that’s what the mills hope,” he says. “All of those increases that were built up over the last year were not as a result of the mills’ higher energy costs—they were a result of a tight market and mills being able to pretty much charge what they wanted because no one could get enough paper.”

In the past, the industry has tried to get price increases based on higher costs for pulp, energy, and fuel, Walsh says, “but any attempt to do this has been in vain unless the demand was exceeding supply.”

With six straight quarters of price increases in paper, Walsh says one big question remains: ”With the economy in the tank, Christmas an assured blood-bath, and resulting weakened demand, can mills take enough downtime to keep their pricing up?”

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