Mar 01, 2006. /Lesprom Network/. In the North American pulp market, deliveries in January were down from January 2005 in BSKP but slightly up in BHKP. Announced closures are mainly in BSKP. Producers announced $660/tonnes for NBSKP and most of that increase has gone through by the end of February. There were a few additional changes seen last week in the prices reported. The US NBSKP index moved up by $0.53, or 0.08%, and closed at $656.61/tonnes. In the US newsprint market, the weakness in demand persists. The consumption of dailies was down over 8% in January and February tends to be a seasonally slow month. Cost pressures are still on and supply cuts continue. The announced increases, typically by $40/tonnes from February, continue to creep through in both basis weights. The index for the 30 lb news gained $0.25/tonnes, or 0.04%, and closed at $621.69/tonnes. The PIX US Newsprint 27.7 lb (45g/m2) benchmark came up by $0.19/tonnes, or 0.03%, to $664.65/tonnes. Optimism is gaining ground in the world economic projections over 2006, at least. After slower fourth quarter growth in the US, January numbers indicate strong growth. Low unemployment, high housing starts and increases in industrial production and consumer spending pull the upturn. High inflation and the likelihood of one or several interest rate hikes fuel the uncertainties. In Europe, the IFO-poll came out in Germany with the best reading in 15 years. Export numbers have improved and private consumption is strengthening. Better company profits are likely to help investments. Strikes of the public sector and inflation slightly above the target cause concern. The probability of ECB raising interest rates in their coming meeting on Thursday of this week has risen. In Asia, the strong performance of the Japanese economy continues. The Central Bank already hints that the period of 0-interest rates will soon be over, even if the pricing remains flat today. With lower unemployment and higher earnings, household consumption has risen faster than expected. GDP forecasts for 2006 have been revised upwards to 2.2-2.7%. In China, GDP-growth is expected to continue to grow at about 9.5% during first quarter, matching the average annual growth of the past 20 years. Inflation rate is running just over 2%. Huge investments, rapid growth of the export (and import) trade and rising productivity are the key drivers. Most experts expect slightly stronger yuan and slower growth during the second half of the year. January statistics brought mainly positive news to the paper industry. Tissue paper production volumes are high. Also packaging sector activity is lively in Europe and Asia but in the US, January containerboard stats showed a 2% decline after a very strong end of 2005. In newsprint European and US numbers continue to diverge. In the US, dailies consumption was down 8.5% in January. In Europe, CEPIPRINT shows a 7% demand increase against last year. Other wood-containing paper numbers for the European market were also positive. US printing and writing sector had a strong January after a weak 2005. The clearest improvement was in uncoated free sheet. Also coated free sheet shipments were up. Coated wood-containing grades were also up also after a small decline in 2005. Demand for uncoated mechanicals rebounded by double-digit numbers. On the pulp market, the year has started with strong shipments but also strong production numbers in January. Shipments to Europe were above last year’s level. In the North American market, shipments were down in BSKP but marginally up in BHKP. Production of market pulp ran at a high level and producer inventories, as reported by PPPC, went up slightly more than the seasonally adjusted number for January. Quotes received for our European NBSKP index continued to edge higher. The PIX benchmark climbed up by $2.3/tonnes, or 0.4%, and closed at $622.06/tonnes. The USD weakened last week by 0.3% against the Euro. Therefore the index in Euro was up - after conversion – less than the USD-index and closed at Euro 522.92/tonnes, up by Euro 0.45/tonnes, or 0.1%. In BHKP, the deliveries of market BHKP from the countries which report their statistics were up over 8% in January against 2005. In Europe, the announced price increases continue to go gradually through. Last week USD weakened by 0.3% against Euro. Euro 510 converted to $607/tonnes. Average from the USD-quotes alone moved up by $3.1/tonnes, or 0.5%, to 612.05. Average of the quotes reported in Euro remained flat at 510.00 Euro/tonnes. The weakening of the USD against Euro brought Euro-average up less than the USD-average. The index closed at 513.76 Euro/tonnes, up by 1.0 Euro/tonnes, or 0.2%, from last week. Converting the index-value into USD brought it to $611.17/tonnes, up by $2.9/tonnes, or 0.5%. The newsprint demand in Europe improved considerably in January against January 2005. Euro weakened by about 0.4% against the basket of non-EMU currencies. With some assistance from the currency movements, the index climbed up by 2.7 Euro/tonnes, or 0.5%, and closed it at Euro 512.56/tonnes. LWC demand in Europe recovered after a clear drop in December. The currency effect of the 0.4% weaker Euro against the non-EMU basket contributed with an upward push on our benchmark. The PIX LWC-index inched further up from last week by Euro 0.57/tonnes, or 0.08%, and closed at Euro 702.81/tonnes. In CWF, the upturn in the US market was seen as a long-awaited positive sign. Changes in the prices reported to us were again seen to both directions, the upward ones being slightly stronger. Helped also upwards by the currency effect of a slightly weaker Euro, the index gained 2.3 Euro/tonnes, or 0.3%, and moved to 719.95 Euro/tonnes. In uncoated woodfrees, the US market has tightened rapidly and price increases have been announced. In Europe, some changes in the quotes were reported – to both directions. The impact from the weakened Euro contributed to another minor rise in the benchmark. The index gained Euro 0.92, or 0.12%, and closed at 789.75 Euro/tonnes. Packaging product demand was strong over the year-turn in all key world markets. In the US, the containerboard shipments, however, fell by 2%. Also, the inventories went up slightly more than the seasonal January average. For brown kraftliner, exchange rates had both an upward and downward pressure. The 0.3% weakening of the USD lowered the price in Euro for the USD-denominated sales but the 0.4% weakening of the Euro against the basket of the non-EMU currencies provided an upward push. Some higher quotes were again received and the PIX Kraftliner index moved up by 1.1 Euro/tonnes, or 0.2%, to 445.16 Euro/tonnes. The PIX White-top kraftliner index followed suit. Weakening of the Euro against non-EMU currencies gave some upward push. The benchmark moved slightly up again, this time by Euro 0.91/tonnes, or 0.14%, and ended at Euro 666.72. In the recycled fibre based grades, the benchmarks were pushed moderately upwards both by the weakening of the Euro against the basket of non-EMU currencies and higher quotes. The PIX Testliner 2 index gained 2.9 Euro/tonnes, or 0.8%, and closed at 359.31 Euro/tonnes. The PIX Testliner 3 benchmark moved up by 2.5 Euro/tonnes, or 0.7%, to Euro 334.03/tonnes. The PIX RB Fluting index climbed up also by 2.5 Euro/tonnes, or 0.8%, to Euro 316.62/tonnes.