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Outlook for Book Publishing Papers

Outlook for Book Publishing Papers. John Maine, VP World Graphic Paper BMI Management Conference April, 2013. US Economy Gaining Some Momentum Quarterly Real GDP and Personal Consumption Growth, Annualized Percent Change.

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Outlook for Book Publishing Papers

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  1. Outlook for Book Publishing Papers John Maine, VP World Graphic Paper BMI Management Conference April, 2013

  2. US Economy Gaining Some MomentumQuarterly Real GDP and Personal Consumption Growth, Annualized Percent Change

  3. Media Tablet Ownership Expanding Rapidly, Could Reach 40% of Adults by 2014Percent of Adults Who Own Tablet Computers and E-readers Source: pewinternet.org

  4. Adult Trade Book Sales by FormatBillion US Dollars Source: BISG and some RISI Estimates

  5. North American P&W Demand by GradeMillion Tonnes Average Annual Growth 2013-2014 CWF -2.9% UWF -3.2% Cmec -5.2% Umec -0.9%

  6. Projected Change in North American P&W Demand by GradePercent

  7. Total Paper Usage in US Books Declining (000 tons)

  8. Book Publishers Moving Toward Coated Freesheet (much of which is imported) and Uncoated Mechanical (substituting for more expensive uncoated freesheet) US Consumption of Paper by Grade in Book Publishing (percentage)

  9. Uncoated Mechanical Bulky Book Market Cut in Half by Decline of Mass-Market Paperback(N. American Shipments to all End-Uses,000 tonnes) Source: PPPC

  10. Combined North American Demand for Uncoated Freesheet Offset and Uncoated Mechanical Superbrite– Trends towards substitution of cheaper papers plateaus 000 tonnes

  11. North American Imports of Printed Books – Trending Down As Asia Loses its Appeal Million Real 2012 Dollars 18

  12. U.S. Imports of Printed Products from China – Printing Of Books in China Has Abated For Environmental and Economic Reasons Million Real 2012 Dollars 18

  13. North American Demand for Coated Woodfree Started Trending Down in 2007 Million Tonnes

  14. US Market for Coated Woodfree Sheets versus Rolls US Demand, Thousand Short Tons Includes coated bristols and imports of coated mechanical sheets

  15. US Market Share for Coated Sheets by Source of Supply – Imports Are Critical Tariff applied to China and Indonesia in 2010 Note: Includes coated bristol sheets and coated mechanical sheet imports

  16. US Market Share for Coated Rolls by Source of Supply – Imports Actually Lost Share Note: Includes coated bristol

  17. Supply and Trade Trendsfor Printing & Writing Papers

  18. Announced Net Capacity Changes for 2013-2014 vs RISI Forecast of Demand Growth for the Same Period

  19. Coated Woodfree Operating RatesLack of announced capacity expansion to cause operating rates to improve in 2013-2014

  20. Announced Net Capacity Changes for 2013-2014 vs RISI Forecast of Demand Growth for the Same Period

  21. Coated Mechanical Operating RatesDecline in North America leads to weaker markets, Europe forecast assumes shuts With assumed shuts

  22. Announced Net Capacity Changes for 2013-2014 vs RISI Forecast of Demand Growth for the Same Period

  23. Uncoated Woodfree Operating RatesMore shuts are likely to occur to balance global demand and supply over the next two years

  24. Announced Net Capacity Changes for 2013-2014 vs. RISI Forecast of Demand Growth for the Same Period

  25. Uncoated Mechanical Operating RatesMassive shuts in Europe cause global markets to tighten despite restarts in North America

  26. Costs for Virgin and Recycled Fiber Will Likely Increase Over the Next Two Years US$/ton Data sources: RISI and Letsrecycle.com

  27. High Grade Recycled Paper in the US Market • Demand and supply are seeing widely different growth rates and this will create upward pressure on high grades • Demand: fast-growing paper sectors, such as tissue, will request more high grades of recovered paper • Supply: printing and writing paper, the major supply of high grades, however, will see significant decline in consumption • Costs are forecast to move upward through 2014 along with the strengthening virgin pulp market, after a weak year in 2012.

  28. Period of Relative Cost Stability to End as Costs Rise for Fiber, Energy, and TransportN. American Mill Delivered Cash Costs for Producing 34 lb. LWC

  29. Historical Publishing Paper Prices ($US/cwt) …Trending down while the rest of the world is starting to increase

  30. Thank you for your attention! For more information: World Graphic Paper 5-Year Forecast Global Newsprint Risk of Closure Study www.risi.com/gnr China’s Influence on World Graphic Paper Markets in the Coming Decade www.risi.com/chinagraphic

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