The Paper Markets – 2009 Joanne Schweikert – Field Sales Sonoco Recycling

 Sonoco is a Paper and Packaging Company (not a gas station)  Founded in 1899 – NYSE Symbol “SON”  4 Billion in Sales last year  Recycle 3.5 million tons per year  30 Paper Mills Worldwide  Richmond Paper Mill located at 1850 Commerce Road  Virginia Recycling Plants located in Madison Heights and Fishersville

What Happened?  Last February OCC was $115 per ton, now cardboard is $25 per ton, what happened?  A sudden drop in demand from China caused the markets to plummet  Chinese mills had stocked up on paper anticipating a spike in business after the Olympics  The boom did not materialize, the global economy froze and Chinese mills were overstocked

What Happened?  Following the purchasing “freeze” in China was the month of December that set a record for mill downtime  Key phrase heard was “lack of generation” due to dismal Christmas retail season. This could lead to shortages of OCC and allow mills to use up excess inventory  At this time most mills are up and running with plenty of supply

February Update  OCC rose $5.00 to Southeast Yellow Sheet High Side of $25.00 per ton  Export prices are rising….why? China’s mills are struggling…why is export up?  Two reasons: Shipping rates are lower and OCC prices are a bargain  China is buying and warehousing, betting on a third quarter recovery  Sonoco’s market prediction (guess) is for $50 OCC Mid Year and $70 by Year End

Historic Southeast Yellow Sheet Prices JanFebMarAprMayJunJulAugSepOctNovDec Ave $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 22.50

Conclusion