Jun 27, 2007. /Lesprom Network/. The supply/demand balance in the US pulp market has continued to be tight in spite of the announced market-related downtime taken and the planned machine closures by the US paper producers. Some producers have announced pulp price increases in the US market from July, typically by $20 per tonne. The PIX US NBSK pulp benchmark stayed again, after the 10% rule was applied, unchanged from previous week at $810.00/tonne. North American newsprint statistics recorded another month of declining demand, according to PPPC. Imports of newsprint have also been down, and inventories at North American mills fell in May. Overcapacity is still the name of the game, and at least three companies have informed of engaging production curtailments in the near future. The 30lb benchmark dropped by $0.52, or by 0.09% to $575.14/tonne, and the 27.7lb benchmark dropped by $0.56, or by 0.09% to $615.70/tonne. US economy is still fairly close to stalling and the jobless claims rose last week. But, the economy is now also showing the first faint signs of rebound beginning to take place. Just as the US authorities, also IMF is expecting the US growth to resume during the second half of 2007 and into 2008. The main indicator was the big increase in retail sales in May. In Europe, the EU leaders were able to pull off, after difficulties, a compromise agreement on a deal to reform the European Union institutions. This may also have economic implications, at least in the sense that had the agreement not been reached, Union would have lost some of its credibility as an international negotiation partner. In Japan, BoJ left its economic assessment in June unchanged from May. The Bank believes that the economy is, at present, expanding moderately and expects this to continue. Deflationary pressures continue to pose a threat although BoJ projects those pressures to ease. High corporate profits boost business investments. In China, the rapid growth during first quarter appears to have continued driven mainly by fixed-asset investment and exports. Many of the economic indicators have showed stronger performance early this year than in the first half of 2006. Leading analysts expect from the authorities further cooling measures, such as still higher interest rates and reserve requirements, as well as new administrative directives on bank lending. The May statistics of the European paper sector have not yet been released. The numbers from UTIPULP indicate modest improvement in paper production. In fine papers, the increasing cost pressure is cited as one European producer has announced a price increase for coated woodfree reels and sheets for September. Another producer has revealed plans to raise office paper prices in September in Europe .In North America, newsprint statistics for May show continued decline of newsprint demand. The US containerboard numbers for May were not encouraging with box shipments down compared to May last year. Tightness experienced on the pulp market received statistical backing when the May statistics came out from PPPC. Shipments were up and producer inventories came down by 3 days (between 200-300 000 tonnes) and stood at 27 days at the end of May. Last week the NBSKP European benchmark moved only slightly up by $0.49 or 0.06% to $791.25/tonne. The 0.6% strengthening of Euro against USD caused the Euro-value to decrease. After conversion, the Euro-index dropped by 3.3 Euro or 0.56% to 590.62 Euro/tonne. In market BHKP, the shipments in May were above the previous month and a year ago bringing the producer inventories of BHKP down in May. Price increases announced for June have so far been at least partially accepted in Europe. The 0.6% strengthening of the Euro against USD gave a downward push to our PIX BHKP benchmark, which moved down by 1 Euro, or 0.2%, to 516.16 Euro/tonne. Converting the value into USD changed the index anyway up by $2.95, or 0.4%, to $691.50/tonne. Some of the recent newsprint exports from North America have increasingly found its way to Europe. The slight upward effect caused by the 0.7% weakening of the EUR against non-EMU currencies impacted the Newsprint benchmark, which resulted in a moderate climb of 0.39 Euro/tonne, or 0.07%, to 539.21 Euro/tonne. Coated mechanical paper exports out of Europe have showed two-digit decline changes for each month, except March, from the beginning of the year. At the same time, European deliveries to the region have kept ahead of last year, again except for March. The Euro has weakened during the week by approximately 0.7% against non-EMU currencies, contributing with a push-up effect. The downward changes overwhelmed the currency impact, and the PIX LWC benchmark lost 0.30 Euro or 0.04% and ended at 677.16 Euro/tonne. In coated woodfree papers, estimated European demand (by CEPIFINE) is up by 3% in the January-April period, thanks to a swift start of the year. The pressure of increasing production costs prevails, and M-real has announced a price increase of 5-8% to its coated fine papers in Europe, both reels and sheets, for September. The upward impact of the weakening Euro against non-EMU currencies was stronger, so the PIX Coated woodfree index gained 0.38 Euro, or 0.05%, reaching 717.74 Euro/tonne. Uncoated woodfree papers have seen monthly demand growth in Europe this year, except for February, as reported by CEPIFINE. Among latest price data received for the PIX A4 B-copy index, there were some moderate downward adjustments. However, the weakening Euro against non-EMU currencies had a stronger upward effect, and the PIX A4 B-copy index climbed 0.49 Euro/tonne, or 0.06%, ending at 839.67 Euro/tonne. In packaging sector, the latest US containerboard numbers were disappointing. However, containerboard inventories remained on a low level. In Europe, market remains quite strong. Benchmarks for European containerboards continued their way up. Euro strengthened for a change against the USD by 0.6%, but weakened against the non-EMU basket by about 0.7%. Our PIX Kraftliner index for brown virgin fibre based linerboard gained Euro 0.95, or 0.2%, to 531.85 Euro/tonne. In White-top Kraftliner our index moved up by Euro 0.77, or 0.1%, closing at 697.25 Euro/tonne. In the recovered paper based containerboards, the price changes were upwards and the PIX Testliner 2 benchmark inched up by Euro 0.19, or 0.04%, to 453.32 Euro/tonne. The PIX Testliner 3 index gained more, Euro 0.99, or 0.23%, closing at full 435.00 Euro/tonne. PIX RB Fluting went up most by 1.07 Euro, or 0.25%, ending at 421.48 Euro/tonne. Recovered paper prices have been generally moving up recently. In Europe, our PIX OCC 1.04 dd benchmark went up by Euro 0.21 this time (or 0.2%), closing at 93.94 Euro/tonne. The gap against PIX Testliner 2 index narrowed by just Euro 0.02 to Euro 359.38. As the prices for other RCP-based containerboards went up more, the differentials widened to Euro 341.06 and to Euro 327.54 against PIX Testliner 3 and PIX RB Fluting benchmarks, respectively. In old newsprints/old magazines grade, some higher quotes were received last week and our PIX ONP/OMG 1.11 dd index gained Euro 0.28/tonne, or 0.25%, to 113.53 Euro/tonne. The differential to PIX Newsprint index widened to 425.68 Euro/tonne.