Paper Outlook — Declaring War on Dumping

Eastern Influences

A slowing economy and rising postal costs are going to have an impact on demand, contends John Maine, vice president of RISI, a publisher of titles for the pulp and paper industry. Asian sourcing is becoming a hot button topic.

“We expect to see additional imports coming in, particularly from the Asian markets,” Maine says. “It remains to be seen what will happen in the (NewPage) dumping suit…I don’t believe it will have an impact in 2007, which means we’ll continue to see significant Asian paper in our market. That will keep the market amply supplied and, because of that, pricing is going to remain competitive.

“On the other hand, we do see a tightening in the European market. Those prices are going to escalate, to some degree, which means the European producers will be less interested in shipping to our market. But I don’t think the strength in the European market is going to be enough to offset the weakness that we’re having in North America and will continue to have in 2007.”

One paper manufacturer finds itself having to answer allegations of price fixing. Stora Enso North America was indicted last month by a grand jury for allegedly participating in a price fixing conspiracy to drive up the price of paper between August 2002 and June 2003. The Associated Press quoted the indictment as saying Stora Enso agreed to the price fixing scheme with an unidentified competitor. Stora Enso denies any wrongdoing and plans to plead not guilty.

On the import front, Asian sourcing continues to draw ire and fire from the U.S. manufacturing sector. Dayton, OH-based NewPage filed a petition with the U.S. International Trade Commission (ITC) accusing sources in China, Indonesia and South Korea of dumping coated freesheet imports in the United States. The ITC ruled there is “reasonable indication” that the U.S. paper industry is being materially harmed by the imports, and now the case goes before the U.S. Department of Commerce (DOC). The ITC and DOC are responsible for conducting antidumping (AD) and countervailing duty (CVD) investigations.