Apr 07, 2004. /Lesprom Network/. The first quarter of 2004 has been frustrating for Europe 's supercalendered (SC) paper producers. Demand for SC rose by 1.8% in January before gathering steam and climbing by 9% in February, according to CEPIPRINT. On top of that, sources reported "record" demand levels at the end of 2003 and strong order books early in the New Year. But prices fell in Germany , Europe 's largest SC market, last month despite the brisk demand. Prices in the French and Italian markets followed suit. Stability reigned in the UK though. The downward price movement was a tough blow to SC papermakers, many of whom had hoped to increase margins with price rises of 3-5% in January. Many players in the SC market attributed the price erosion to cutthroat competition. Sources also said a split had appeared in the sector. Both paper buyers and suppliers said that demand at the top end of the market, the SC- A and the SC- A+ grades, was much healthier than for SC- B or SC- C paper. Demand for higher-quality SC grades has often flourished in periods of economic gloom as publishers and printers downgrade from LWC to SC to cut costs. But some sources said the lower-quality grades are facing increased competition from machine-finished (MF), or hybrid mechanical papers, as well.