Much has been written and debated recently about the prospects for coated paper[paper?:paper sample maker cutting machine] price declines in 2012. The arguments for lower prices in 2012 are pretty compelling and basically come down to:
1) Demand is falling more rapidly than expected and will decline further in 2012.
2) European demand will collapse due to recession, and even with capacity shuts, they will have more capacity available for export.
3) Due in part to the European financial woes, the euro is weakening and will get even weaker in 2012, allowing European producers to cut prices for export tonnage in order to gain market share.
4) Asian capacity expansion continues to inundate the world market for coated freesheet.
5) Prices are already headed down in parts of Asia and Europe.
6) Falling pulp costs have allowed some non-integrated mills to reduce prices, mainly in
Europe and Asia.
7) Given all of the above, North American coated paper prices will fall in 2012 until more capacity shuts are announced to balance the market.
