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Stora Enso's updated Market Outlook published
on 23 October 2008
Near-term Market Outlook
In Europe market demand is forecast to be weaker in the fourth quarter than a year earlier for newsprint, magazine paper and fine paper. Despite weakening demand, markets for most paper products, especially newsprint, are expected to remain balanced due to substantial reductions in production capacity.
Consumer board and industrial packaging markets are forecast to be weaker than a year earlier. Demand for consumer board is currently negatively impacted by food safety problems in China, and industrial packaging will be affected by weaker demand in consumer goods markets and construction industries. The outlook for wood products remains poor, further undermined by low consumer confidence, and demand is likely to be weaker in the fourth quarter than a year earlier.
Prices in Europe are expected to remain stable during the fourth quarter for newsprint, magazine paper and uncoated fine paper. Some improvement in coated fine paper and consumer board prices is anticipated as already announced price increases are gradually implemented. Prices for industrial packaging products are forecast to decrease slightly. Persistent oversupply of wood products is likely to keep prices under pressure in many markets. Stora Enso intends to increase prices for newsprint, magazine paper and coated fine paper in Europe in early 2009.
In China demand and prices are vulnerable to weakness in coated magazine paper market, which is also having an affect on the uncoated magazine paper market. The outlook for fine paper demand in China remains stable, but prices are exposed to some pressure due to elevated mill inventories.
In Latin America demand for magazine paper is forecast to stabilise, but prices for non-contractual business are predicted to improve further. In other overseas markets some improvement during the quarter is anticipated in magazine paper prices, whereas newsprint prices are expected to remain unchanged after significant increases in the third quarter.
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