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Cautious Optimism
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Although world economies are still coping with the effects and after effects of the recent economic crises, industry prospects for 2011 seem to be positive, overall. (Any note of optimism, of course, is tempered by the potential for poor management and unexpected events to mess things up.)

 As 2010 ended, holidays sales were glowing and unemployment rates had cooled. Several companies have successfully emerged from creditor protection and stocks were on a steady climb, nearly regaining pre-crisis levels.

Sector-to-sector, country-to-county, region-to-region, 2011 will bring varied challenges and opportunities.

In the United States, for example, a weak dollar is favoring exports of wood and lumber products. In Canada, mills are benefiting from an infusion of green energy dollars. In both countries, demand for paper will grow little.

In Europe, the potential effects of national debts and the stability of the euro linger as concerns, packaging papers and paperboard are in demand, and transportation costs are rising.

In South America, new mills are being built and demand for plantation wood continues. Overall economic growth will be at or above the forecast 4% worldwide average, but inflation and greater reliance on imports will nag some countries.

In India, demand is forecast to exceed supply for most grades, particularly printing and writing papers and containerboard. Additional capacity is being added for most grades, but fiber supply is a concern.

Worldwide, the increase in demand for paper is expected to be greatest in China over the next several years. Again, fiber supply is a concern, as is chain of custody, particularly for products exported to the North America and Europe, and inflation, and balance of trade.

Each year brings distinct challenges and a few surprises. Oil prices could again climb to troublesome levels, interest rates likely will inch up, housing starts might remain weak, and electronic media might further drain demand for publication papers in North America and Europe. Yet, prospects for 2011 are promising enough to warrant a degree of optimism.

 

 A Consultant Connection Member at your service: HurterConsult Inc. - Consulting Engineers for Pulp, Paper, Fiberboard & Cellulosic Biofuels from Nonwood Fibers, Wood, Wastepaper & Purchased Pulp | Resource, Market & Feasibility Studies, Engineering Solutions & Technical Advisory Services | Bob Hurter (613) 749-2181

 


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