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wwwlogoPackaging Industry News:

wwwlogoWeekly Comment

May /June Report

The year 2001 has begun with a stumble with all world markets are in a state of uncertainty .

The US economy has slowed ( Recession or pause in growth ??)
Global Credit and Stock Markets are suffering after years of dramatic expansion
Paper prices have been volatile for years but are now stable ,due to capacity reductions.
Paper and Packaging Industry capacity has been taken out to level Supply and Demand .
The rising cost of fuel is dangerous.
/$ Trend
Global Rates are falling.

The paper and packaging market are currently stable to weak .But Global markets are levelling off and maybe cooling (Stock Markets ,Property ,Jobs) , after a long period of dramatic growth .In the paper and packaging industry consolidated has resulted in the paper and pulp and packaging markets sustaining a near level of equilibrium . The major problem and the one that is probably the most difficult to resolve is the general lack of confidence in the Business world today . Periods of slow growth and zero growth are normal parts of the business cycle .We must all understand that over the long term these slow periods or contractions are necessary periods to correct any excesses that have been established in the previous cycle . It is vital to Look ahead and not down at your feet in order to make sure that you survive .The first year of the new century will see a test of the survival of the fittest .

wwwlogoPackaging Barometer

This indicator is produced as a general guide to help better understand the position of prices in the paper industry at any time.

18/06/01 06:38:43

Weekly Paper Index 52%,Previous Index 59%
Weekly Economic Index 40%,Previous index 41%

Still mixed numbers are appearing .Are there more rate cuts due ?? , more profit Warnings .Well ,at least the financial markets have improved short term . However ,Uncertainty remains everywhere . This fear of a hard landing for the Worlds economy is still not ready to go away just yet .The markets are still slow and forecasters are still unclear about what is really ahead .The paper market is still in a pause and stable mode .What is of note is the relative strength of paper stock prices .Could the financial market be discounting the near term bottom and see no dramatics slide in future prices ???? .
The lowering of rates may not work at this time ,The problem now for the Fed is that fear and expectation are in control .What is required is confidence . Rate cuts may not be enough.

The real world market have lost their vitality and so have the general stock markets . It is still my belief that it may be safer to assume the worst case scenario and be pleased if it does not appear .

The general idea behind this indicator is simply that it will act to guide you at the markets likely extremes. An early warning system that prices have fallen too far too fast or that they have risen too far too fast. There is likely to be a significant time lag (3-6 months) between these indicators highlighting a trend change and an actual market direction change. This is due to many factors like stock positions etc.

A reading in the index above 75% indicates that the market has advanced too fast and there is likely to be at least a short term change in direction ahead in the market being monitored.

A reading of 50% indicated a market that is giving no clear long term direction.

A reading in the index below 25% indicated that the market has fallen too fast and there is likely to be at least a short term change in direction ahead in the market being monitored.



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