Jul 26, 2006. /Lesprom Network/. The oil futures prices for 2007 climbed last week over $80 per barrel. Record high prices have not cut the growth of world economies as expected still only a few years ago. US consumer prices were in June up by 0.3%, more than the consensus forecast. When the leading indicators were up too after several declines although the US home builders index hit the lowest value in 15 years possibilities for another interest rate increase are rising. Faith on the German economy has collapsed if the ZEW-index is to believe when it dropped in July below a long-term average. First estimates of the economic growth during 2nd quarter show however that the so far young recovery is continuing in the UK, France, Germany and Italy, too. In spite of the economic cooling in many export markets the rise in consumer spending is increasing optimism about the GDP in general. The recent Tankan report was very positive showing stronger business investments in Japan than expected. Officials of the Bank of Japan have indicated that new interest rate increases are done only at a slow pace depending on economic situation and price trends. The possible cooling off in China could mean problems as 15% of the Japanese exports go to China. The growth of Chinese economy keeps accelerating in spite of the efforts to slow down the speed. During the second quarter GDP growth jumped to 11.3% which is the highest number in a decade. The fixed-asset investments jumped in the first two quarters over 31% and industrial production almost 20% in June. The paper industry in Europe is starting their normal summer breaks but this year there are perhaps more permanent closures than before. Finnish UPM has closed down one Ctd WF PM at Kymi mill and the coated magazine paper producing Voikkaa mill in the turn of June-July ahead of schedule. Several woodfree paper producers have announced price increases by around 5% during the present quarter. The latest world pulp statistics from June, released by PPPC, continue to show firm market conditions as inventories at the producers came down by two days of supply in total from May. For the first six months the shipments were up by 5.8% from a year ago with most of the demand growth again in Asia but with a substantial increase also to the European market. Several North American and Chilean producers have separately informed about August BSKP price increases by $20/tonne. With a few increased quotes reported to us the PIX NBSKP benchmark climbed again, this time by $1.89/tonne, or 0.3%, to $698.95/tonne. The USD decreased last week in value by 0.1% against Euro. NBSKP index value in Euro increased to 551.22 Euro/tonne, up by 0.88 Euro/tonne, or 0.2%. In BHKP stocks at the producers of 19 producing countries in the world were in the end of June down only by one day from a year ago whereas in softwood they dropped by five days. Improved volumes of woodfree paper help to maintain a good supply/demand balance in BHKP. Price increases in BEKP by $20/tonne have been announced for the Asian market for August deliveries. The value of USD decreased last week by 0.1% against the Euro. The PIX BHKP index closed at 513.85 Euro/tonne, up by 1.25 Euro/tonne, or 0.2%. Converting the index-value into USD brought it to $651.56/tonne, up by $2.30/tonne, or 0.35%. Newsprint demand in Europe seems to continue strong. Price changes reported to us for newsprint were almost nonexistent last week. The PIX Newsprint index went up by 0.53 Euro, or by 0.1%, to 519.07 Euro/tonne. In coated mechanical reels, demand is said to have strengthened but price development has been disappointing or only slightly positive. The price quotes reported to us were up this time. Together with the help of the exchange rate movements the PIX LWC benchmark gained by 1.95 Euro, or 0.28%, reaching 703.40 Euro/tonne. In coated woodfree, oversupply to the European market has lead to poor price development earlier this year but new price increases have been announced for the third quarter. Changes in price quotes reported to us were in both directions. However the upward ones were more numerous than the downward ones. Powered also by the exchange rate development the PIX Ctd WF benchmark was up by 2.42 Euro, or 0.34%, ending at 719.08 Euro/tonne. The uncoated woodfree and the cut-size market in particular have continued to develop in a fairly positive way. Price increase attempts have been successful and new hikes have been announced. Price changes reported to us from last week were mostly upwards, and with the assistance given by the currency movements the PIX A4 B-copy index headed north by 3.64 Euro, or 0.45%, reaching 804.37 Euro/tonne. The US corrugated box shipments continued to be strong in June, being up by 4.9% on year-over-year basis, while inventories fell. Producers are trying to push the recent $50/tonne containerboard price increases into box prices. In Europe, price increases announced for brown kraftliner and recycled based grades are being implemented, and at least two white-top kraftliner producers have announced price increase plans of typically 30 Euro/tonne for September. For kraft linerboards, both brown and white, some higher price quotes were reported to us last week. The PIX Kraftliner index rose by Euro 0.29 or 0.06%, to 484.49 Euro/tonne. This time the PIX White-top Kraftliner benchmark gained more, i.e. 2.33 Euro, or 0.35%, reaching 668.00 Euro/tonne. Also the currency effect helped our indexes this time as the basket of non-EMU currencies strengthened by some 0.5% against the Euro. Also the benchmarks for recycled based containerboards were all up. The PIX Testliner 2 index inched up by Euro 0.19, or 0.05%, to 381.84 Euro/tonne, the PIX Testliner 3 by Euro 0.14, or 0.04% to 354.57 Euro/tonne, and the PIX RB Fluting by 1.40 Euro or 0.41% to 339.76 Euro/tonne.