NEW YORK (AP) -- China's announcement Monday that it will delay construction of a huge containerboard plant, along with a broader stock market surge, lifted shares of U.S. containerboard makers.
Nine Dragons Paper Holdings, the largest Chinese maker of containerboard, is delaying construction of 1.6 million metric tons planned for 2009, according to Citi Investment Research analyst Chip Dillon. Containerboard is used to make cardboard boxes.
Both Nine Dragons and Lee & Man Paper "appear to be capital constrained after years of building capacity at a breakneck pace," Dillon wrote in a client note. "These producers have access to little indigenous virgin fiber and are dependent on old corrugated containers, supplies of which should continue to tighten over time (until virgin-based capacity is planned in softwood tree regions)."
Meanwhile, on Wall Street most stocks jumped after major governments worldwide announced further steps to shore up the global banking system. The Standard & Poor's 500 index was up in midday trading by about 6.3 percent.
Packaging Corp. of America rose $1.10, or 5.9 percent, to $19.62, Rock-Tenn Co. climbed $1.56, or 4.7 percent, to $35.07, International Paper Co. added $1.62, or 8.3 percent, to $20.93 and Smurfit-Stone Container Corp. increased 31 cents, or 11.7 percent, to $2.95.