Price increase for paper and cardboard.

At the beginning of May, we announced to you the second price increase this year for different paper qualities with effect from the beginning of June. At that time, we also advised you to be cautious about the validity of your quotations for the second half of the year.

The reality today only confirms our assumption of a few months ago. The pulp price has been continuing to rise and around a month ago it stabilised at a price level not seen for the past ten years. Since January 2009, the pulp price has risen by no less than 290 dollars or 270 euro. Understandably, the paper producers have not yet succeeded in setting off these enormous price increases in the current paper price.

Consequently, the prices for all graphic paper types, office paper, cardboard and envelopes are increasing by about 6%. Specifically this means a rise of 50 euro per ton for the graphic paper types, both in pressed and unpressed sheets and rolls. This rise applies to all shipments from stock or production with effect from 6 September 2010. The price rise differs for the other products in our range and is likewise applicable with effect from 6 September, depending on the product. Our commercial staff will be clearly advising you about this over the coming two weeks.

How do we see the situation developing over the next few months? The factories’ high capacity utilisation and their continuing substantial influx of new orders are resulting in abnormally long delivery times. The sudden upturn in the economy and the season-related busier second six months will further support this rather favourable position for the factories. On the other hand, the pulp price has reached a record height and ought to stabilise or even drop slightly. In view of this situation, we are convinced that paper prices will tend to stabilise for a longer period following September’s increase. Barring any unforeseen circumstances such as earlier this year (strikes and earthquake), these new prices will remain firm until the end of this year and quite probably even longer.