January 10
Paper Trader Europe
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A Monthly Monitor of the
European Graphic Paper Markets
Introduction
This issue of the Paper Trader Europe focuses mostly on price issues. New price levels for
2010 are not yet settled, but asks and bids are starting to be close enough for publishing new
downgraded estimates. We warned our readers about signs of a price war in the mechanical
grades in the previous two issues. Despite the record-breaking drop in deliveries in 2009 and
the perhaps permanently weakened market, sufficient capacity closures have not been carried
out to keep supply and demand in balance. In many grades total capacity actually increased
in 2009. Cost savings and decreasing raw material costs have made some room for the price
decreases, but there seem to be more strategic moves involved with 2010 prices to accelerate
industry restructuring.
Newsprint prices in Europe will drop by Euro 90/tonne to Euro 430/tonne. Price drops of
16-20% combined with increasing costs in 2010 will be a killing combination for producers
with high gearing, maturing debts and high costs. Closures would be needed, but loan covenants
might prevent further financial flexibility without further divestments. Companies will try to
sell their most valuable assets, but buyers know that the longer it takes, the cheaper the price tag
will be. We might even see bankruptcies, but because that does not remove overcapacity, we are
more likely to see the healthiest industrial companies picking the cherries from the pie. A similar
pattern is being seen in the magazine grades. Prices of coated and uncoated magazine papers
will decrease about Euro 60-65/tonne (-10% compared to Q409 average) to approximately Euro
600/tonne for LWC offset 60g and roughly Euro 535/tonne for SC 56g gravure. The statistical
average prices will be higher until all contracts have adapted to the new levels. These price
levels are not sustainable. No producer will be operating in the coming years with such prices
and predicted cost inflation. The year of 2010 will be the most challenging year for many
companies, and low cost and low geared companies know that they are the best equipped to
survive this period. It is a buyers market: paper is being offered at ridiculous prices. When the
overcapacity situation is solved and the best assets have found new addresses, prices will be
raised to acceptable levels. We are expecting prices to start recovering by the beginning of 2011
at the latest. We are recommending as short of a pricing period as possible for producers. Buyers
will obviously seek the opposite. What might ruin the game is that local governments will
give subsidies in order to save jobs at high cost mills or Asian players will enter the European
markets and prevent the price increases in the coming years.
There are no signs of a price war in the uncoated woodfree market and prices will remain rather
flat in the coming year. If the price of pulp turns downward again, the current overcapacity will
push prices further down. Improving coated woodfree deliveries have caused some producers
to even plan price increases. Dark shadows over export volumes (2.6 million tonnes of new
capacity from China alone during the next two years) and the huge drop in coated mechanical
paper prices does not make the current situation ideal for price increases. When the full impact of
Asian exports is better known, we believe about 1.0 million tonnes of coated woodfree capacity
Paper Trader Europe - January 2010

will be closed in Europe. The big question is whether Asian demand can consume all of the new Asian capacity.
If not, where will the tonnage go when the US is introducing anti-dumping allegations on Asian suppliers. High
cost Europe has big markets and good price levels. We are afraid that not every major producer would be willing
increase prices and such a development could even lead to a price war in the CWF sector, too.

Economy
The German Ifo Business Climate Index improved from 93.9 to 94.7 in December. This was the ninth consecutive
month of improving expectations. The index describing the current situation also increased from 89.1 to 90.5
exceeding the year ago levels (88.6). Also expectations rose slightly from 98.9 to 99.1.

The BVDM’s (German Printing and Media Industries Federation) Current State of Business Index turned upward
again after a 23% drop in November. In December the index rose from -35% to -14%. This is strong improvement,
but is still clearly below the year-ago levels. The business climate for the next quarter also improved from -20%
to -14%. However, business expectations for the next half year sank from -4% to -13%. For us this indicates that
the inventory driven rebound is mostly over, and price negotiations will disturb demand in the coming months.
When prices are settled at clearly lower levels than in Q409 in most grades, the market might accelerate again.

Weak economic data in December turned the euro down against the US dollar. Since November the average
rating of the euro depreciated by 2.2% against the US dollar and was rated at 1.4579. Compared to December
2008, the euro was 7.9% stronger in December 2009. At the time of this writing, the euro was rated at 1.4488
against the US dollar.

There was no news from the advertising forecasts in late December or early January. Some advertisers in the US
have been reported to be performing better than expected and print advertising has been performing better as
well, so there is an upside risk when it comes to the advertising expenditure forecast for 2010.

European Newsprint
According to CEPIPRINT, European newsprint demand decreased by 9.7% in November, pushing the three-
month average demand to -12.4%. According our estimates, November was in line with the long-term average
(-14.7% compared to November in 2005-2008, year-to-date -15.2%). Prices of newsprint will drop drastically
in 2010, thus a pickup in demand will be seen in February or March 2010 at the earliest. Based on clearly
negative advertising expenditures for newsprint, we also estimate that European demand will shrink a further
3.7% (360,000 tonnes) in 2010.

Exports increased by 21.6% from November 2008. Palm’s new 400,000 tonne machine in the UK along with
some mills in Sweden have been increasing exports, supported by weak local currencies. The three-month
average export figure is up by 6.7% and net exports are up by 14.3%. The increase in exports since April has
gone to the Far East and Africa.

Average operating rates stood at 91% in November. Because of the increasing capacity, the six-month average
operating rate will not reach levels above 90% in the foreseeable future. Prices in Europe are under great pressure.
At the moment it seems that the average price of 45g standard newsprint will drop to the level of Euro 430/tonne.
The price drop can be explained by the average price in the global markets, not by European cost levels or by a
weak supply and demand balance. A price drop of 15-20% combined with increasing costs will put many players
against the wall. We will see companies trying to survive a close to impossible situation -- they will divest their
most valuable and liquid assets and close their weakest capacity. The current price level cannot continue for very
long. The price of virgin and recycled fiber will be increasing in 2011 and beyond as will the price of energy. We

2 RISI
 Paper Trader Europe - January 2010

Figure 1
Newsprint Prices, Europe vs. US
45gsm, Euros per Tonne

660

620 Europe US
580

540

500

460

420

380

340

300
J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N
03 04 05 06 07 08 09

recommend producers commit to the shortest possible pricing periods and buyers to the longest possible. When
the overcapacity is wiped away and fewer but better positioned players are left, prices will again rise. But if
financial problems are solved with local subsidies instead of mergers and closers, the situation will continue into
2011. The year of 2010 will be the most challenging year for European newsprint in history. The extremely weak
profitability outlook is casting a shadow over the planned new capacity projects in Europe during 2010.

European Printing and Writing

Uncoated Mechanical Papers

Demand for SC magazine papers decreased by 4.0% in November (CEPIPRINT), meeting our expectations.
Year-to-date demand is -8.3%. There has been some movement from SC back to coated mechanical paper,
but nothing dramatic can be expected. Demand has followed nicely the long-term average between 2005 and
2008, and there is no reason to adjust the estimates at this point. Demand for other uncoated mechanical papers
decreased 9.6% in November. Year-to-date demand stands at -16.4%. We expect total demand for uncoated
mechanical papers to have declined by 9.6% in 2009.

Exports of uncoated mechanical papers remained weak. SC paper exports in November declined by 19.2% and
exports of other uncoated mechanical papers declined by 22.2% despite the already very weak comparison levels
from 2008. Year-to-date exports for SC papers are down 38.2% and exports of other uncoated mechanical papers
are down 32.3%. We are expecting a 36% decline (-860,000 tonnes) in exports for 2009. Exports were in freefall
in December of 2008 as well, thus the full year forecast will be met.

Operating rates for SC paper based on November deliveries were at 85%, clearly below the previous months.
The six-month average stands at 86%. Prices for SC will drop significantly, too. We have been reporting about
traces of a price war in our two previous issues of the Paper Trader Europe and the outcome of those actions can
be seen in the forthcoming price levels. We are currently expecting SC paper prices to drop to Euro 530-540.

RISI 3
Paper Trader Europe - January 2010

Figure 2
European Mechanical Printing and Writing Operating Rates

100%

95%

90%

85%

80% Uncoated
Finnish Mill Coated
Lockout
75%

70%
99 00 01 02 03 04 05 06 07 08 09 10 11

At these levels, many producers cannot generate positive cash flow and will face problems with their maturing
debts. Overcapacity, especially in the LWC grades, will need to be solved before prices can start to recover.
Despite the record-breaking drop in deliveries and operating rates, there was very little change in magazine
paper capacity during 2009. It is likely that some companies will be forced to sell their best SC assets in the near
future to stay solvent. Nevertheless, the current price level is not sustainable and thus we recommend producers
to offer as short of a pricing period as possible. It is buyers market now, but corrective action could change the
tone overnight. We estimate that prices will begin recovering as of the beginning of 2011 at the latest or there
will be not any papermakers left in Europe.

Coated Mechanical Papers

Coated mechanical paper demand in November decreased by 10.9%, meeting our expectations. Compared to
the average between 2005 and 2008, November was down by 17.4%. The year-to-date figure (-22.2%) is getting
closer to our full year forecast of -20.3%, but because of clearly dropping prices we believe the December
delivers were rather weak. Order books for the coming year look slightly better than year-ago, but because of
the lousy advertising expenditure outlook, no dramatic improvement can be expected. We forecast Western
European demand to improve by 2% in 2010. The risk is, nevertheless, on the upside, but it depends strongly on
whether magazine advertising gains speed or not.

Exports in November exceeded the year-ago level by 1,000 tonnes and were 19.2% below the 2005-2008 average.
The current level was reached already a month ago and we updated our export estimates in the previous issues to
-22%. Year-to-date net exports are now standing at -22.2%. The current levels will continue for few months, but
there is a big risk coming from Asia. Increasing Asian CWF capacity will lead to increasing exports and is likely
to eat meaningful tonnages from the average European coated mechanical and coated woodfree producer.

Total deliveries in November were 9.4 % below the year-ago levels, indicating operating rates of 88%. The six-
month average operating rates were at 81% -- a clear indication of overcapacity and decreasing prices.

4 RISI
 Paper Trader Europe - January 2010

Coated mechanical prices (60g offset) will drop to Euro 600/tonne on average. Rotogravure prices are likely
to be about Euro 10/tonne better. The drop of Euro 65/tonne will put most producers under heavy stress. Low
cost producers also have low gearing, so they can last in the current situation longer than many others, thus we
believe the current situation will not be permanent. Companies will be performing corrective actions -- they
will sell their most valuable assets to finance maturing debts and cut capacity to get supply and demand back to
healthy levels to offset cost inflation. We recommend very short pricing periods for producers and the opposite
for buyers. There will be fewer but more influential producers left after 2010, and when the market is in the
hands of the few, prices are likely to recover. We estimate that the prices will start to recover by the first quarter
of 2011 at the latest.

Uncoated Woodfree Papers

CEPIFINE statistics from November were not published before this issue of the Paper Trader Europe went to
press. Based on our sources, the market has been continuing at relatively good levels. The best indication is the
long-term average comparison: 2009 demand was 15.8% below the average of 2005-2008, but in September
and October demand corrected to the level of -10% to -11%. We believe this level will be seen in the coming
months as well. Uncoated woodfree demand in Europe is down by 15% compared to 2008 levels during January
and October. Our demand forecast for the full year is also -15%. Because the prices of uncoated woodfree paper
will remain rather flat in the first month of 2010, we will not seen any inventory movement related to price
negotiations either. Increasing unemployment is pushing demand for office papers down and thus it is possible
that there will not be any rebound. We are currently forecasting a drop of 1.9% (136,000 tonnes) for 2010.

Exports have been increasing in the previous months due to the UPM Nordland PM2 restart and Portucel’s
new Setubal machine startup. We expect further increases in net exports despite the increasing imports from
Brazil and Russia. We are estimating that net exports will increase by 116,000 tonnes in 2010 to the level of
510,000 tonnes. Because the exports are mostly driven by overcapacity rather than better profitability, we are
also predicting that exports will decrease in 2011 along with capacity closures. There is about 1 million tonnes
of overcapacity in Europe and no new closures have been announced.

Figure 3
Uncoated Paper Prices in Europe
Euros per Tonne

870
Offset Reels (80 gsm)
830
SC Gravure (56 gsm)
790

750

710

670

630

590

550
J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N
03 04 05 06 07 08 09

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Paper Trader Europe - January 2010

Figure 4
Coated Paper Prices in Europe
Euros per Tonne

800

Coated Woodfree, Reels (100 gsm)

780
LWC Gravure (60 gsm)
760

740

720

700

680

660

640
J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N
03 04 05 06 07 08 09

Operating rates were at 88% in October. The six-month average operating rates were at 83%, but will be
decreasing in the coming months due to seasonality and increasing capacity. The three-month average will hit
86%, which is still clearly below healthy levels and gives purchasers the advantage in price negotiations. Unlike
in mechanical paper, prices are likely to stay at their current levels. There are plans of increasing prices because
cost pressures are huge, but the current level of deliveries is not strong enough to support them, although the
attempts are helping to keep prices stable. We are expecting uncoated woodfree prices to stay current with their
year-end 2009 level or decrease only about Euro 10/tonne in the first months of 2010. If the price of pulp turns
down again, paper prices are likely to follow. If the price of pulp remains at its current level or increases, paper
prices will remain close to their current level in 2010.

Coated Woodfree Papers

CEPIFINE statistics from November were not published before the writing of this issue of the Paper Trader
Europe. Demand has been picking up slightly in recent months compared to levels seen during the summer.
Our demand forecast for the full year is -15.7% while the CEPIFINE demand during January-October stands at
-17.4%. Compared to the average between 2005 and 2008, the September-October demand was -11% to -13%
compared to the year to date level of -17%.

Net exports have rebounded back closer to the long-term average (2009 was 18% below the average in 2005-
2008) and are now at last year’s level. The steep decline in exports began in August 2009, so the year end
comparable figures are at very low levels. Net exports are down by 44% for 2009 and our forecast is -40%. We
do not expect that the current level of exports is sustainable. The speed of capacity expansions in Asia, especially
in China, will ensure that there will be plenty of paper available in the export markets. European producers who
have their own eucalyptus pulp capacity in South America could be profitable in the export markets, but we
expect the market pulp players and players relying on European short fiber pulp to disappear from the export
markets during 2010 and 2011.

6 RISI
 Paper Trader Europe - January 2010

Figure 5
European Woodfree Printing & Writing Operating Rates

100%
97% Uncoated
94% Coated
91%
88%
85%
82%
79% Finnish Mill
Lockout
76%
73%
70%
99 00 01 02 03 04 05 06 07 08 09 10 11

Operating rates for the industry are at healthy 90% level. The three-month average operating rate stood at 92% in
October, but the six-month average is only 82%. Some companies are already planning on price increases. We are
afraid that not every major producer will be behind the price increase attempt and such a development can even
lead to price war in the CWF sector, too. Such a dynamic is reminiscent of 2007 when several producers sought
price increases in the magazine grades, but some major players did not join, but rather filled their machines with
flat prices. The other companies noticed this move too late and lost some of their best customers. Later in the year
these customers were taken back with prices about 5% lower than the original. Customers were the only winners
in this contest. With dark shadows looming over export volumes (2.6 million tonnes of new capacity from China
alone during the next two years) and a huge drop in coated mechanical paper prices, the current situation is not
ideal for price increases. When the full impact of Asian exports is better known, we believe about 1.0 million
tonnes of European coated woodfree capacity will be closed. The big question is whether Asian demand can
consume all of the new Asian capacity. If not, where will the tonnages go since the US is introducing anti-
dumping allegation on Asian suppliers. High cost Europe has big markets and good price levels.

We are forecasting coated woodfree prices to drop less than coated mechanical prices (Euro 30/tonne versus
Euro 65/tonne) to the level of Euro 640/tonne. In the first months of the year, prices will drop only Euro10/tonne,
but the increasing price gap is likely to even out from the high end.

© Paper Trader Europe provides economic analysis of printing and writing paper markes and is edited by John Maine, Sampo Timonen and Kevin Conley. Subscriptions or client service: Call
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RISI 7
 Paper Trader Europe - January 2010

Table 1
Western European Graphic Paper Imports by Region of Origin
Thousand Tonnes

SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009
NEWSPRINT
North America 57 49 23 49 28 39 43 40 51 36 43 35 34
Eastern Europe 36 37 38 39 36 44 53 40 42 32 37 32 37
Latin America 0 2 0 1 1 0 0 0 3 0 1 1 1
Middle East 0 0 0 0 0 0 0 0 0 0 0 0 0
Far East 2 1 0 1 1 1 0 1 3 1 3 1 0
Africa 0 0 0 0 0 0 0 0 0 0 0 0 0
Oceania 0 0 0 0 0 0 0 0 0 0 0 0 0
All Others 0 1 0 0 0 0 0 0 0 0 0 0 0
Total 95 89 61 91 66 85 97 81 99 70 84 69 72
UNCOATED MECHANICAL
North America 4 5 1 1 0 3 8 4 3 7 2 2 1
Eastern Europe 5 3 3 2 4 3 3 3 3 3 3 3 3
Latin America 0 0 0 0 0 0 0 0 0 0 0 0 0
Middle East 0 0 0 0 0 0 0 0 0 0 0 0 0
Far East 2 2 2 1 4 6 2 4 4 6 3 2 4
Africa 0 0 0 0 0 0 0 0 0 0 0 0 0
Oceania 0 0 0 0 0 0 0 0 0 0 0 0 0
All Others 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 12 11 6 4 8 12 13 11 10 15 8 8 9
COATED MECHANICAL
North America 3 6 1 4 1 4 5 4 5 6 5 6 5
Eastern Europe 6 6 4 6 2 2 3 4 5 3 2 2 10
Latin America 2 0 1 0 0 0 2 1 1 0 1 1 1
Middle East 0 0 0 0 0 0 0 0 0 0 0 0 0
Far East 2 1 1 2 2 1 2 1 2 2 2 1 2
Africa 0 0 0 0 0 0 0 0 0 0 0 0 0
Oceania 0 0 0 0 0 0 0 0 0 0 0 0 0
All Others 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 13 14 7 12 5 7 11 9 13 11 10 10 18
UNCOATED WOODFREE
North America 6 7 6 6 7 5 5 5 6 5 7 6 6
Eastern Europe 42 45 36 39 53 46 47 43 41 42 40 33 47
Latin America 14 15 12 14 12 17 11 17 16 16 17 17 19
Middle East 0 0 0 0 0 1 0 1 1 0 1 0 1
Far East 10 11 14 14 19 22 17 12 16 11 10 7 13
Africa 8 8 4 5 6 3 4 6 6 7 9 3 2
Oceania 1 1 1 1 0 1 1 1 1 1 1 0 1
All Others 3 4 3 3 0 0 0 0 0 0 0 0 0
Total 84 92 76 82 99 94 85 85 85 82 85 67 89
COATED WOODFREE
North America 3 3 4 3 3 4 4 4 4 4 3 3 4
Eastern Europe 11 6 7 5 6 9 10 7 11 7 9 9 7
Latin America 1 1 1 1 1 1 1 2 3 2 2 1 2
Middle East 0 0 0 0 0 0 0 0 0 0 0 0 0
Far East 9 11 10 10 18 13 14 13 13 15 11 7 12
Africa 0 0 0 0 0 0 0 0 0 0 0 0 0
Oceania 0 0 0 0 0 0 0 0 0 0 0 0 0
All Others 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 25 23 23 19 29 28 30 27 30 29 25 20 26

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 Paper Trader Europe - January 2010

Table 2
Western European Graphic Paper Exports by Region of Destination
Thousand Tonnes

SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009
NEWSPRINT
North America 6 1 4 3 3 3 3 2 3 0 0 7 5
Eastern Europe 43 49 46 44 32 31 33 35 36 38 37 31 35
Latin America 3 1 1 1 3 2 2 2 2 1 1 1 2
Middle East 44 32 25 27 38 23 22 18 22 28 38 32 25
Far East 44 33 29 22 37 21 20 22 30 32 43 43 45
Africa 14 12 8 9 20 13 10 12 16 18 12 17 16
Oceania 2 0 0 0 0 0 0 0 0 0 0 0 1
All Others 6 5 3 4 4 4 3 2 4 2 3 4 2
Total 160 135 116 109 136 96 92 93 114 119 134 134 130
UNCOATED MECHANICAL (Finnish uncoated mechanical exports are RISI estimates)
North America 47 16 19 19 28 32 23 14 26 27 13 18 27
Eastern Europe 77 70 62 66 63 56 67 53 46 63 55 51 57
Latin America 13 13 9 9 6 5 4 8 4 8 7 7 8
Middle East 19 2 10 10 8 8 13 8 5 2 5 6 2
Far East 19 5 6 6 5 3 5 4 6 6 7 5 7
Africa 13 6 7 7 10 3 5 7 6 3 4 3 3
Oceania 19 14 18 18 15 15 14 7 13 6 8 10 11
All Others 1 1 1 1 -1 2 1 1 1 1 13 14 1
Total 207 127 132 136 133 125 133 100 107 116 113 113 116
COATED MECHANICAL
North America 43 40 40 35 43 40 27 29 30 29 42 36 39
Eastern Europe 103 107 91 80 58 60 58 62 60 68 68 66 68
Latin America 17 16 16 12 7 8 10 11 12 12 12 16 11
Middle East 19 18 11 11 9 10 9 11 12 15 13 12 12
Far East 20 19 16 17 22 17 29 30 31 33 25 26 38
Africa 9 11 6 9 4 4 6 7 5 8 9 7 7
Oceania 17 13 12 17 10 11 8 7 9 6 12 13 16
All Others 2 3 2 3 3 2 2 2 2 2 2 2 2
Total 230 228 193 184 156 152 148 159 160 172 183 177 193
UNCOATED WOODFREE
North America 9 11 7 7 8 6 7 9 12 12 15 10 15
Eastern Europe 55 57 52 39 38 41 43 41 38 41 46 42 48
Latin America 8 7 5 6 4 4 4 5 5 5 7 5 5
Middle East 25 24 16 12 6 6 12 14 23 21 32 26 26
Far East 13 14 10 8 8 8 11 12 13 15 16 13 17
Africa 16 16 12 21 11 15 17 18 20 18 21 14 23
Oceania 5 4 3 3 4 2 3 2 3 3 5 3 5
All Others 3 3 2 2 3 2 3 3 3 2 3 2 3
Total 134 136 108 97 82 85 100 103 116 117 144 115 141
COATED WOODFREE
North America 55 61 49 53 40 35 29 32 31 34 36 33 36
Eastern Europe 81 89 75 47 49 53 59 56 63 56 61 52 70
Latin America 38 38 31 20 18 15 17 22 21 28 38 35 37
Middle East 31 28 20 15 13 14 23 27 33 33 45 29 36
Far East 24 18 13 12 11 14 21 18 26 28 38 36 35
Africa 20 19 12 14 10 11 14 13 14 18 20 16 18
Oceania 9 7 9 8 7 5 4 4 5 4 7 6 5
All Others 3 3 3 3 1 2 2 2 2 2 2 1 3
Total 262 263 212 171 148 150 169 174 196 203 247 209 239

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 Paper Trader Europe - January 2010

Table 3
Western European Mechanical Paper Prices
Euro Per Tonne Delivered

NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2008 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009
Newsprint
Standard 45 gsm
Germany 528 528 528 528 548 548 548 548 548 548 548 548 548 548

France 520 520 520 555 555 555 550 545 545 545 545 540 540 530

Italy 530 530 530 555 555 555 550 550 550 550 540 540 540 540

United Kingdom 433 396 393 471 454 466 472 488 480 473 457 446 454 454
UK Pound 360 360 360 418 418 418 418 418 413 408 408 408 408 408

Supercalendered
Gravure 60 gsm
Germany 605 605 605 625 625 625 625 625 605 600 587 587 575 575

France 605 605 605 625 625 625 625 625 610 610 605 605 595 595
Italy 628 628 628 640 640 640 640 635 625 620 620 608 608 600

United Kingdom 553 506 502 580 559 574 582 602 599 597 577 563 568 568
UK Pound 460 460 460 515 515 515 515 515 515 515 515 515 510 510

Supercalendered
Gravure 56 gsm
Germany 620 620 620 640 640 640 640 640 620 615 603 603 590 590
France 620 620 620 640 640 640 640 640 625 625 620 620 610 610

Italy 628 628 628 640 640 640 640 635 625 620 620 608 608 600

United Kingdom 559 511 508 586 565 579 588 607 604 603 582 569 573 573
UK Pound 465 465 465 520 520 520 520 520 520 520 520 520 515 515

Lightweight Coated
Gravure 60 gsm
Germany 730 730 730 740 740 735 725 725 695 685 680 680 680 675

France 725 725 725 740 733 725 725 720 700 700 690 690 690 690

Italy 740 740 740 750 745 735 735 725 705 705 700 700 685 685

United Kingdom 643 588 584 642 619 635 644 666 657 655 633 618 624 623
UK Pound 535 535 535 570 570 570 570 570 565 565 565 565 560 560

10 RISI
 Paper Trader Europe - January 2010

Table 4
Western European Woodfree Paper Prices
Euro Per Metric Ton Delivered

NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2008 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009
Uncoated Woodfree
Offset Reels 80 gsm
Germany 720 720 720 700 700 700 685 685 670 670 670 650 650 650
France 780 765 765 745 725 725 705 700 685 685 680 680 680 680
Italy 735 730 705 705 695 675 675 670 670 670 670 655 655 655
United Kingdom 674 616 612 631 608 630 638 660 651 649 627 613 624 623
UK Pound 560 560 560 560 560 565 565 565 560 560 560 560 560 560

A4 Cutsize B-Grade
Germany 885 885 875 850 850 810 790 790 790 790 790 770 770 765
France 865 855 855 825 805 780 770 765 745 745 745 745 745 745
Italy 825 815 805 805 795 785 780 760 760 760 760 755 745 745
United Kingdom 752 687 682 704 679 702 712 736 721 718 694 678 690 690
UK Pound 625 625 625 625 625 630 630 630 620 620 620 620 620 620

A4 Cutsize C-Grade
Germany 820 800 760 755 755 735 690 690 690 690 690 670 665 665
France 820 805 805 775 755 730 715 705 695 695 685 680 680 680
Italy 780 760 755 755 745 735 730 720 715 715 715 715 710 710
United Kingdom 716 654 650 671 646 674 684 707 692 690 666 651 662 662
UK Pound 595 595 595 595 595 605 605 605 595 595 595 595 595 595

Coated Woodfree
Reels 100 gsm
Germany 725 725 725 735 730 725 715 705 685 685 680 680 670 670
France 720 720 720 725 720 715 710 700 690 685 680 680 670 670
Italy 725 725 725 725 725 715 710 700 695 695 695 688 688 688
United Kingdom 692 632 628 671 646 663 672 695 680 678 655 640 651 651
UK Pound 575 575 575 595 595 595 595 595 585 585 585 585 585 585

Sheets 100 gsm

Germany 825 820 820 830 830 825 820 810 780 780 775 765 765 755
France 835 835 835 840 835 830 825 815 800 800 795 795 795 795
Italy 815 815 815 815 815 795 795 785 785 775 775 775 770 770
United Kingdom 794 726 721 766 738 758 768 788 761 759 722 706 718 718
UK Pound 660 660 660 680 680 680 680 675 655 655 645 645 645 645

RISI 11
 Paper Trader Europe - January 2010

Table 5
Western European Graphic Paper Price Forecast
Euro Per Tonne
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011
NEWSPRINT
Standard 45 gsm 505 524 521 513 454 431 430 430 547 504 516 436 470
%CH 2.4 3.8 -0.6 -1.5 -11.6 -5.1 -0.1 0.0 4.7 -7.9 2.4 -15.4 7.7

UNCOATED MECHANICAL
SC Gravure 60 gsm 610 621 602 585 551 531 525 525 580 595 605 533 567
%CH 1.8 1.8 -3.1 -2.8 -5.9 -3.6 -1.2 0.0 -2.6 2.6 1.6 -11.9 6.4

SC Gravure 56 gsm 621 632 613 596 561 541 535 535 593 606 616 543 577
%CH 1.6 1.8 -3.0 -2.8 -5.8 -3.6 -1.1 0.0 -2.5 2.3 1.6 -11.8 6.3
COATED MECHANICAL
LWC Gravure 60 gsm 715 713 685 673 635 614 610 610 682 705 697 617 659
%CH 0.1 -0.3 -3.9 -1.8 -5.6 -3.3 -0.7 0.0 -2.7 3.4 -1.2 -11.4 6.8

UNCOATED WOODFREE
Offset Reels 80 gsm 694 681 667 651 648 642 640 640 735 729 673 643 664
%CH -4.0 -1.9 -2.1 -2.4 -0.4 -1.0 -0.3 0.0 6.8 -0.7 -7.7 -4.6 3.3
A4 Cutsize B Grade 801 768 755 739 733 725 723 723 863 852 766 726 755
%CH -4.2 -4.1 -1.7 -2.1 -0.8 -1.0 -0.3 0.0 9.2 -1.2 -10.1 -5.2 3.9

A4 Cutsize C Grade 737 707 692 675 673 671 670 670 821 806 703 671 702
%CH -5.9 -4.1 -2.1 -2.5 -0.2 -0.4 -0.1 0.0 11.2 -1.9 -12.8 -4.5 4.6

COATED WOODFREE
Reels 100 gsm 706 702 683 670 657 643 640 640 701 691 690 645 665
%CH -1.0 -0.6 -2.7 -1.9 -1.9 -2.1 -0.5 0.1 0.5 -1.4 -0.1 -6.6 3.1
Sheets 100 gsm 804 802 775 758 746 733 732 732 815 793 785 736 757
%CH -1.2 -0.2 -3.4 -2.2 -1.5 -1.8 -0.2 0.1 0.1 -2.6 -1.1 -6.2 2.9

EXCHANGE RATE
Euro/US$ 0.77 0.73 0.70 0.68 0.69 0.70 0.70 0.71 0.73 0.68 0.72 0.70 0.72
US$/Euro 1.30 1.36 1.43 1.48 1.45 1.43 1.43 1.41 1.37 1.47 1.39 1.43 1.39

12 RISI
 Paper Trader Europe - January 2010

Table 6
Western European Printing and Writing Paper Forecast
Thousand Tonnes, Seasonally Adjusted
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011
Euro Area GDP
Billion 00 Euro 7,451 7,443 7,474 7,491 7,500 7,520 7,545 7,582 7,731 7,773 7,464 7,537 7,690
Annualized %CH -9.5 -0.5 1.7 0.9 0.5 1.1 1.3 2.0 2.7 0.5 -4.0 1.0 2.0

Apparent Consumption 5,929 5,667 5,834 5,826 5,844 5,823 5,819 5,899 28,861 27,542 23,256 23,384 23,824
%CH -8.6 -4.4 2.9 -0.1 0.3 -0.4 -0.1 1.4 0.3 -4.6 -15.6 0.5 1.9
Not Seas Adj 5,959 5,724 5,642 5,932 5,871 5,878 5,629 6,007 28,861 27,542 23,256 23,384 23,824
%CHYA -17.1 -17.9 -16.6 -10.3 -1.5 2.7 -0.2 1.3 0.3 -4.6 -15.6 0.5 1.9

Net Exports 1,301 1,477 1,386 1,453 1,447 1,499 1,550 1,562 8,609 8,037 5,618 6,058 6,368
Not Seas Adj 1,320 1,384 1,521 1,393 1,468 1,405 1,683 1,502 8,609 8,037 5,618 6,058 6,368

Production 7,231 7,144 7,221 7,279 7,291 7,322 7,369 7,461 37,470 35,579 28,875 29,442 30,192
%CH -11.0 -1.2 1.1 0.8 0.2 0.4 0.6 1.2 0.1 -5.0 -18.8 2.0 2.5
Not Seas Adj 7,279 7,108 7,163 7,325 7,339 7,283 7,312 7,509 37,470 35,579 28,875 29,442 30,192
%CHYA -22.7 -21.5 -19.7 -10.5 0.8 2.5 2.1 2.5 0.1 -5.0 -18.8 2.0 2.5

Capacity 9,569 9,432 9,295 9,159 8,995 8,858 8,748 8,665 40,805 39,642 37,455 35,265 33,940
%CH -1.7 -1.4 -1.5 -1.5 -1.8 -1.5 -1.2 -0.9 -2.1 -2.9 -5.5 -5.8 -3.8

Capacity Utilization 0.76 0.76 0.78 0.80 0.81 0.83 0.84 0.86 0.92 0.90 0.77 0.84 0.89

Table 7
Western European Newsprint Forecast
Thousand Tonnes, Seasonally Adjusted
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011

Apparent Consumption 2,199 2,182 2,173 2,136 2,127 2,078 2,065 2,094 10,445 10,005 8,689 8,364 8,391
%CH -9.1 -0.8 -0.4 -1.7 -0.4 -2.3 -0.6 1.4 -1.3 -4.2 -13.2 -3.7 0.3
Not Seas Adj 2,145 2,191 2,168 2,185 2,075 2,086 2,060 2,143 10,445 10,005 8,689 8,364 8,391
%CHYA -13.6 -13.8 -13.6 -11.5 -3.3 -4.8 -5.0 -1.9 -1.3 -4.2 -13.2 -3.7 0.3

Net Exports 33 122 101 135 143 179 179 148 283 379 391 649 585
Not Seas Adj 82 75 128 106 190 134 205 119 283 379 391 649 585

Production 2,232 2,303 2,274 2,271 2,270 2,257 2,243 2,242 10,728 10,384 9,080 9,012 8,976
%CH -12.0 3.2 -1.3 -0.1 0.0 -0.6 -0.6 0.0 -1.6 -3.2 -12.6 -0.7 -0.4
Not Seas Adj 2,227 2,266 2,295 2,291 2,265 2,220 2,265 2,262 10,728 10,384 9,080 9,012 8,976
%CHYA -15.9 -12.1 -11.7 -10.5 1.7 -2.0 -1.3 -1.3 -1.6 -3.2 -12.6 -0.7 -0.4

Capacity 2,663 2,637 2,613 2,592 2,580 2,559 2,532 2,500 11,345 10,918 10,505 10,170 9,655
%CH -1.0 -1.0 -0.9 -0.8 -0.5 -0.8 -1.0 -1.3 -0.5 -3.8 -3.8 -3.2 -5.1

Capacity Utilization 0.84 0.87 0.87 0.88 0.88 0.88 0.89 0.90 0.95 0.95 0.86 0.89 0.93

RISI 13
 Paper Trader Europe - January 2010

Table 8
Western European Uncoated Mechanical Paper Forecast
Thousand Tonnes, Seasonally Adjusted
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011

Apparent Consumption 1,073 1,098 1,126 1,119 1,120 1,107 1,105 1,125 4,800 4,884 4,415 4,457 4,530
%CH -15.1 2.3 2.5 -0.6 0.2 -1.2 -0.2 1.9 0.1 1.8 -9.6 1.0 1.6
Not Seas Adj 1,041 1,097 1,116 1,160 1,087 1,106 1,096 1,168 4,800 4,884 4,415 4,457 4,530
%CHYA -9.9 -10.0 -7.1 -11.4 4.4 0.8 -1.8 0.6 0.1 1.8 -9.6 1.0 1.6

Net Exports 421 384 359 370 393 419 445 446 2,592 2,400 1,534 1,703 1,830
Not Seas Adj 444 373 389 328 417 407 477 403 2,592 2,400 1,534 1,703 1,830

Production 1,494 1,482 1,484 1,489 1,513 1,526 1,550 1,571 7,392 7,284 5,949 6,160 6,359
%CH -14.0 -0.8 0.2 0.3 1.7 0.8 1.6 1.3 0.1 -1.5 -18.3 3.6 3.2
Not Seas Adj 1,485 1,470 1,506 1,488 1,504 1,513 1,573 1,570 7,392 7,284 5,949 6,160 6,359
%CHYA -19.0 -19.8 -19.9 -14.3 1.3 3.0 4.4 5.5 0.1 -1.5 -18.3 3.6 3.2

Capacity 1,876 1,855 1,837 1,822 1,808 1,793 1,780 1,769 7,915 7,727 7,390 7,150 6,975
%CH -1.5 -1.1 -1.0 -0.8 -0.8 -0.8 -0.7 -0.6 1.3 -2.4 -4.4 -3.2 -2.4

Capacity Utilization 0.80 0.80 0.81 0.82 0.84 0.85 0.87 0.89 0.93 0.94 0.81 0.86 0.91

Table 9
Western European Coated Mechanical Paper Forecast
Thousand Tonnes, Seasonally Adjusted
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011

Apparent Consumption 1,414 1,334 1,393 1,399 1,407 1,403 1,406 1,433 7,218 6,949 5,541 5,649 5,775
%CH -6.8 -5.7 4.5 0.4 0.6 -0.3 0.2 1.9 2.4 -3.7 -20.3 2.0 2.2
Not Seas Adj 1,401 1,318 1,380 1,441 1,394 1,386 1,393 1,475 7,218 6,950 5,541 5,649 5,775
%CHYA -24.9 -25.3 -21.2 -8.1 -0.5 5.2 0.9 2.4 2.4 -3.7 -20.3 2.0 2.2

Net Exports 484 529 593 621 575 575 579 580 3,229 2,854 2,226 2,309 2,490
Not Seas Adj 489 506 622 610 580 551 609 568 3,229 2,854 2,226 2,309 2,490

Production 1,898 1,863 1,986 2,020 1,982 1,978 1,985 2,012 10,447 9,803 7,767 7,958 8,264
%CH -11.2 -1.9 6.6 1.7 -1.9 -0.2 0.4 1.4 1.4 -6.2 -20.8 2.5 3.9
Not Seas Adj 1,890 1,824 2,002 2,051 1,975 1,938 2,002 2,043 10,447 9,803 7,767 7,958 8,264
%CHYA -28.8 -27.0 -19.1 -5.8 4.5 6.2 0.0 -0.3 1.4 -6.2 -20.8 2.5 3.9

Capacity 2,670 2,642 2,600 2,544 2,453 2,398 2,363 2,351 11,225 10,910 10,455 9,565 9,360
%CH -0.7 -1.1 -1.6 -2.1 -3.6 -2.3 -1.4 -0.5 -3.0 -2.8 -4.2 -8.5 -2.1

Capacity Utilization 0.71 0.71 0.76 0.79 0.81 0.83 0.84 0.86 0.93 0.90 0.74 0.83 0.88

14 RISI
 Paper Trader Europe - January 2010

Table 10
Western European Uncoated Woodfree Paper Forecast
Thousand Tonnes, Seasonally Adjusted
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011

Apparent Consumption 1,868 1,750 1,723 1,707 1,720 1,725 1,728 1,739 9,065 8,293 7,048 6,912 7,027
%CH -2.7 -6.3 -1.5 -1.0 0.8 0.3 0.2 0.7 -0.8 -8.5 -15.0 -1.9 1.7
Not Seas Adj 1,901 1,836 1,638 1,674 1,752 1,810 1,643 1,707 9,065 8,293 7,048 6,912 7,027
%CHYA -11.6 -18.1 -18.8 -11.3 -7.9 -1.4 0.3 2.0 -0.8 -8.5 -15.0 -1.9 1.7

Net Exports 64 147 83 101 105 124 137 144 263 328 394 510 429
Not Seas Adj 73 110 97 115 115 87 150 158 263 328 394 510 429

Production 1,932 1,897 1,806 1,808 1,825 1,849 1,864 1,883 9,328 8,621 7,442 7,421 7,456
%CH -2.1 -1.8 -4.8 0.1 0.9 1.3 0.8 1.0 -0.2 -7.6 -13.7 -0.3 0.5
Not Seas Adj 1,974 1,945 1,735 1,789 1,866 1,898 1,792 1,865 9,328 8,621 7,442 7,421 7,456
%CHYA -13.2 -14.2 -18.2 -8.6 -5.5 -2.4 3.3 4.3 -0.2 -7.6 -13.7 -0.3 0.5

Capacity 2,377 2,348 2,328 2,317 2,333 2,323 2,296 2,253 10,265 9,845 9,370 9,205 8,510
%CH -1.7 -1.2 -0.9 -0.4 0.7 -0.4 -1.2 -1.9 -2.1 -4.1 -4.8 -1.8 -7.6

Capacity Utilization 0.81 0.81 0.78 0.78 0.78 0.80 0.81 0.84 0.91 0.88 0.79 0.81 0.88

Table 11
Western European Coated Woodfree Paper Forecast
Thousand Tonnes, Seasonally Adjusted
09:I 09:II 09:III 09:IV 010:I 010:II 010:III 010:IV 2007 2008 2009 2010 2011

Apparent Consumption 1,574 1,485 1,592 1,602 1,596 1,588 1,580 1,602 7,779 7,415 6,253 6,366 6,493
%CH -11.9 -5.6 7.1 0.6 -0.4 -0.5 -0.5 1.4 -0.1 -4.7 -15.7 1.8 2.0
Not Seas Adj 1,615 1,473 1,508 1,657 1,638 1,575 1,497 1,657 7,779 7,415 6,253 6,366 6,493
%CHYA -20.1 -15.6 -16.2 -10.3 1.4 6.9 -0.7 0.0 -0.1 -4.7 -15.7 1.8 2.0

Net Exports 333 417 352 361 374 381 389 393 2,524 2,456 1,463 1,537 1,620
Not Seas Adj 315 396 412 341 357 359 448 373 2,524 2,456 1,463 1,537 1,620

Production 1,907 1,903 1,944 1,963 1,970 1,969 1,969 1,995 10,303 9,871 7,716 7,903 8,112
%CH -16.3 -0.2 2.2 1.0 0.4 -0.1 0.0 1.3 -0.9 -4.2 -21.8 2.4 2.6
Not Seas Adj 1,930 1,869 1,920 1,998 1,995 1,934 1,945 2,030 10,303 9,871 7,716 7,903 8,112
%CHYA -27.4 -23.9 -21.3 -13.9 3.3 3.5 1.3 1.6 -0.9 -4.2 -21.8 2.4 2.6

Capacity 2,645 2,588 2,531 2,475 2,400 2,344 2,308 2,293 11,400 11,160 10,240 9,345 9,095
%CH -2.9 -2.2 -2.2 -2.2 -3.0 -2.3 -1.5 -0.7 -3.4 -2.1 -8.2 -8.7 -2.7

Capacity Utilization 0.72 0.74 0.77 0.79 0.82 0.84 0.85 0.87 0.90 0.88 0.75 0.85 0.89

RISI 15