May 30, 2007. /Lesprom Network/. The US economy appears to be set for a soft landing. OECD predicts for the US a 2.1% GDP growth for this year and 2.5% recovery for 2008. Jobless claims started to rise but were still at a low level. Rising oil prices push the inflation higher and reduce the private consumption on other products. In Europe, the EU economy continues to shrug off the negative impacts of the German VAT-hike, US economic slowdown, rising interest rates and the overvalued Euro. The official – and so far well founded – euphoria over EU economy hides the voice of those warning that this sort of growth can hardly continue long with the present set of fundamentals. Japan’s consumer price index fell in April by 0.1%, a drop for the third consecutive month. This shows that the risk of deflation is back. This may reduce the BoJ’s chances of bringing up the interest rates from the present 0.5%. Japanese GDP grew by 2.4% (annual pace) during first quarter and most estimates for the full 2007 GDP-growth range between 2.2-2.6%. In China, current account surplus and foreign currency reserves continue to grow. Although the SED process (Strategic Economic Dialogue) is promising more and more openings in the market-based reforms in China, the achievements of the process appear to move insufficiently slowly for many US congressmen. Import duties on coated paper do not have much impact on Chinese or US economic growth but if a wide range of Chinese products were targeted, the future economic growth of the world would be at a much greater risk. Statistics are still not yet available over the European woodfree paper markets’ performance in March and April. CEPIPRINT’s data over woodcontaining grades in April was published, however. Adding the different grades together, April deliveries and regional consumption record was a moderately positive one. The US corrugated packaging market remained rather static in April with essentially unchanged box shipment numbers on year-to-date. Many containerboard suppliers have announced price increases of $40/tonne from May. In the US, the coated free sheet market is monitoring the kind of effects the proposed US anti-dumping duties will have on the price of paper imported from Asia. Some Asian producers of these grades have announced price increases effective from June to cover extra costs arising from the duties. Tightness persists on the pulp markets. The main driver is the short-fall of actual production. Price increases of $20 or $30/tonne have been announced in Europe by a number of producers from June 1, and also in North America and in Asia by some suppliers. The NBSKP European index retreated marginally, i.e. by $0.14 or 0.02% to $778.65/tonne. The 0.3% weakening of Euro against USD last week helped the benchmark in Euro higher. After conversion, the index moved up by 1.44 Euro or 0.25% to 579.31 Euro/tonne. Market BHKP shipments were up 5% from April 2006 but there was no change year-to-date. Also the BHKP producers have announced price increases, typically by $20/tonne in all key markets. The 0.3% weakening of the Euro against USD had a positive impact on the PIX BHKP benchmark, which rose by 2.62 Euro or 0.52% to 504.49 Euro/tonne. Converting the index value into USD brought a smaller change and the benchmark was up by $1.72 or 0.25% at $678.09/tonne. In newsprint, European numbers for April, published by CEPIPRINT, showed a small increase against April 2006 in total shipments, in deliveries to the regional market and even in exports outside the region. An 0.75% weakening of the Euro against non-EMU currencies pushed the PIX Newsprint benchmark higher. The index gained Euro 0.68, or 0.13%, and closed at 538.63 Euro/tonne. For coated mechanical reels, latest CEPIPRINT statistics showed the total shipments going up by 0.8% in April. The year-to-date shipments are still down, now by 0.3%. The Euro weakened during the week by about 0.75% against non-EMU currencies, contributing to an upward push. The PIX LWC benchmark climbed up by 1.7 Euro or 0.25% and ended at 681.95 Euro/tonne. In coated woodfrees, data on European shipments has still not been made public for the months of March and April. Price increase attempts continue in the US. Further upward impact of the 0.75% weakening of the Euro against non-EMU currencies also helped the index higher. The PIX Ctd WF index showed a gain of 2.3 Euro, or 0.3%, and closed at 720.15 Euro/tonne. In uncoated woodfrees, data on European shipments has still not been made public for the months of March and April. The 0.75% weakening of Euro against non-EMU currencies helped, too. The PIX A4 B-copy index moved up by 1.65 Euro /tonne, or 0.2%, ending at 836.41 Euro/tonne. In packaging sector, despite the slowdown in the US economy, growth is strong in other parts of the world. Price increase attempts of $40/tonne for containerboards appear, according to the industry analysts, challenging though. In Europe, price increase initiatives of 20-40 Euro/tonne have been seen, supported by the earlier risen recovered paper costs. This time, both the USD and the basket of non-EMU currencies strengthened against the Euro, adding a positive boost on the benchmarks. Te PIX Kraftliner benchmark ended up gaining a modest Euro 0.30/tonne, or 0.06%, to 529.32 Euro/tonne. PIX White-top Kraftliner index moved up by 2.7 Euro, or 0.4%, closing at 695.12 Euro/tonne. The PIX Testliner 2 benchmark came up by 2.1 Euro, or 0.47%, to 442.67 Euro/tonne. The PIX Testliner 3 index gained 2.3 Euro, or 0.55%, and closed at 420.95 Euro/tonne. The PIX RB Fluting went up most by gaining 3.7 Euro, or 0.9%, ending at 408.03 Euro/tonne. Recovered paper prices have continued to soften, but only moderately. The PIX OCC 1.04 dd benchmark remained unchanged for the third week now at 92.28 Euro/tonne. As the gains in the related containerboards were larger the price differentials continued widening: the gap against PIX Testliner 2 increased to Euro 350.39, to Euro 328.67 compared to PIX Testliner 3 and Euro 315.75 against PIX RB Fluting index. In old newsprints and magazines, the PIX ONP/OMG 1.11 dd index inched up just by Euro 0.02, or 0.02%, to 111.25 Euro/tonne. The differential to PIX Newsprint index widened to 427.38 Euro/tonne.