That was the message from Norske Skog president and chief executive Jan Oksum, speaking at Ifra in Amsterdam last week. "We think the fundamentals are there for a substantial price increase next year," said Oksum.

One source indicated that buyers should be prepared for increases of between 5-8%. Both Stora Enso and UPM have issued a confirmation of price increases.

Stora Enso's UK divisional director for publication papers Fabian Langenskild said the market had improved, not only in newsprint but also in other publication grades. "Our mills in all these segments are very well booked and things are going well. We will definitely increase prices in these areas."

By how much he said, was a matter between the company and its customers. A UPM source also confirmed that the market was busy. Negotiations were continuing with its newsprint buyers, and the sources said these were comfortable with increases being discussed.

Oksum said that demand for both standard and improved newsprint had increased by 5.5% in 2004, while growth in total deliveries from Europe for the grades was 7.7%. The total production levels in Europe are now close to the levels reached in the peak year of 2000.

Oksum said recovery was clearly visible, with machines working at high capacity, and with production levels set to exceed those of 2000. The company's long-term goal is to be a low-cost producer, which it will pursue by focusing on its core business.

Story by Andy Scott