Price Escalation In Paper Ahead.

The article predicts paper price increases through 2005. Shipments from U.S. paper mills jumped to $14.7 billion in June, up 4,2% in June over the previous 12 months. Paper demand has strengthened enough that paper exports through May are essentially unchanged since January, while imports are up nearly 20%, Capacity utilization at paper mills increased to over 86% in the early summer, enough to spur aggressive pricing by mills. But this operating level is below the 88% to 89% reached in 2000, when prices for publication paper grades were substantially above current prices, and prices for marketing paper grades were modestly higher than current prices. Capacity utilization should reach its 2000 levels again at the end of next year following accelerating increases in both packaging and printing demand for paper. June printing shipments were at a three-year high, 4.3% above April. With printers' prices only 0,1 % higher, according to the Producer Price Index report, this was an unusually large 4,2% rise in printing volume. Printing shipments are forecast to expand about 14% more by the end of 2005, including the pass-through of higher paper prices.