Q1 Paper Outlook — Market Taking Stock

"The markets were extremely volatile and prices were depressed, so there were overreactions to a modest increase in price and demand," Miller asserts. "The buying frenzy created false demand and led to inventory shortages. Prices rose rapidly from depressed levels."

Miller contends that industry consolidation has introduced greater stability into today's paper market. "In addition, printers and merchants are better equipped to respond to (supply and price) fluctuations. We don't foresee the same pressures leading to the creation of false demand, and we don't anticipate seeing the same overreactions to modest demand increases," he says.