After two months, P&W shipments were down 0.8%, including a 1.3% decline to U.S. customers, according to data from the Pulp and Paper Products Council.

U.S. printing & writing shipments fell 3.3% in February following a 1.3% decline in January, according to the American Forest & Paper Association, and that included a 4.9% drop in coated mechanical despite the tight market caused by the ongoing strike of the 495,000-ton UPM Miramichi mill in New Brunswick.

North American LWC shipments of 421,000 tons represented a drop of 47,000 tons (10.2%), while 33,000 tons of imports, mainly from Western Europe, took up most of that shortfall despite the higher priced Euro. LWC demand (apparent consumption) dipped by 2.1% in the month.

In fact, as total North American imports of p&w paper rose by 64,000 tons (25.8%) in February from a year earlier, half of that came in coated mechanical and the 85,000 tons was an increase of 63.5%. In addition, coated woodfree imports were up 19,000 tons (16.6%) despite the stronger Euro, which, noted Canadian analyst Paul Quinn of Salmon Partners, "speaks volumes about the extent of the European overcapacity and weakness in their domestic market."

Despite the higher imports for coated freesheet, that sector continues to perform well, and the $50 and $60/ton increases for all coated paper taking effect this month are expected to be put fully in place as contract s with printers and publishers allow.

In February, magazine ad pages rose 4.2% and gained 2.5% in the first two months, according to Publishers Information Bureau. Seven of the 12 major ad categories experienced increases in both revenue and pages.

Coated freesheet demand gained 8.1% and domestic producers gained 5.3% in their February shipments. Production zoomed ahead by 14.1% to 403,000 tons, which was a little more than the market needed with the higher imported tons. Inventories rose by 26,000 tons — the fifth consecutive month of increases that now total 128,000 tons (19.6%).

Overall, the net result of higher imports and production was a 60,000-ton rise in North American P&W inventories for the month, including 26,000 tons for coated woodfree paper.

Uncoated freesheet’s performance data has been a disappointment in recent months, and February’s 5.7% decline in demand continued that streak. Following two months of merely slim improvement, (0.6% in January and 0.2% in December), it would appear that the UFS market strength of last summer is gone. That has prompted International Paper’s decision to idle 250,000 tons of capacity at mills in Maine and Florida for a minimum of three months and to lay off 200 employees working with the two shut PMs.

As with coated free grades, inventories have risen substantially since August and added anther 14,000 tons in February. The total 1.52 million tons is 16.2%, or 212,000 tons above the end of August level.

North American uncoated woodfree shipments were down 7.1% at a 91% shipments-to-capacity rate, the PPPC reported. The pullback to U.S. customers represented essentially the entire 83,000-ton decline from a year earlier, which is causing concern among analysts who note that the first quarter’s economic conditions were relatively strong.

The month’s 67,000-ton drop in demand for UFS from February 2004 came despite a 56.4% rise in overseas imports to 44,000 tons, including from Brazil and Portugal.

Uncoated mechanical remains consistently the strongest among the four principal P&W paper sectors. With numerous, and often unspecified improvements with additives, calendering and pulp, the broadly defined category is surely eating into any higher demand that previously was spread into other sectors. Areas of uncoated freesheet include label paper, wet-strength and certain offset printing rolls. That includes new capacity from the Big Three in North American groundwood -— Abitibi-Consolidated, Bowater and NorskeCanada.

Imports are not much of a factor in the sector, and according to the SC Council, European imports of SC grades for the first two months of 2005 are down 2.6%. Total imports of uncoated mechanical into North America dropped 4.9% in February and are down 6.1% for two months.

In February, the production of uncoated groundwood rose 16.3% in North American to 510,000 tons, the PPPC said, and shipments ran at a 94% rate—best of the printing & writing areas. That gave a 12.7% improvement over last year, including a 13.8% increase to U.S. customers. Demand as measured by apparent consumption rose 10.3%, or about 48,500 tons.