A note almost a month ago from Goldman Sachs suggested selling shares in Mondi, the FTSE 100 packaging group, because there was excess capacity coming into the market, particularly in Kraftliner, a basic corrugated product, which would force prices down. This is a perennial problem in such cyclical industries.
Mondi shares are back up to where they were before the note, though they lost 3p to £14.56 yesterday after a reassuring trading update that suggested the excess capacity could be absorbed by growing demand in the market and that all the other factors affecting performance were heading in the right direction.
In particular, input prices are stable, paper prices across the Mondi range are stable to rising, and volumes are up — the market is