Paper Market Forecast — Outlook Turns Bearish

* Capacity for coated groundwood dropped by 1.3 percent from its all-time high in 2002. The survey projects capacity to remain essentially unchanged through 2006.

* Coated free sheet capacity declined 4.2 percent from 2002 levels. Capacity is now 14.2 percent below its 2000 peak, and is expected to rise by 2.1 percent annually during the forecast period.