January, the news was not all bad.
According to statistics released today by the Pulp and Paper Products Council (PPPC), the shipments-to-capacity operating rate for North America was up in January, to 91.2% vs 85.9% last January. However, the North American production-to-capacity operating rate fell to 89.9% from 94.0%.
The production-to-capacity rate in January slid year-over-year more in Canada, to 87.9% from 93.3%, while the U.S. figure dropped to 92.8% from 95.0%.
January's shipments-to-capacity rate, however, was up in Canada but down in the U.S. In Canada, the rate increased to 90.4% from 81.2%, while it dropped to 92.5% from 92.9%in the U.S., PPPC reported.
January last year and this year each had four Sundays, making the comparisons between the two months equitable.
The PPPC's January figure for total North American shipments was also somewhat reassuring as it fell by only 0.3% year-over-year in January, to 924,000 tonnes. Production, however, plunged 10.1%, to 910,000 tonnes.
Overseas shipments for North America was another good sign, starting out the year with a 30.2% year-over-year jump, to 188,000 tonnes. Latin America and Western Europe showed significant gains of 60.9% and 32.4%, respectively.
Asian markets were down, however, with Japan off 5.7% and non-Japan Asia, down 7.2%.
Overseas shipments in January grew more for Canadian mills than for U.S. mills, with offshore exports up
year-over-year by 32.2% in Canada and by 23.7% in the U.S., according to the PPPC.
While exports have help buoy the North American newsprint market, they're undermining Europe's. The U.S. dollar's weakness has created an advantage for North American sellers as European prices are higher. Last week, FOEX Indexes Ltd. reported a E2.68/tonne drop in 45 g/m2 newsprint in Europe.
In the U.S., however, newsprint prices are rising. In addition to a current increase totaling $60/tonne apparently taking effect through the first quarter, AbitibiBowater Inc. last week announced another $60/tonne hike in the second quarter, to be phased in with $20/tonne monthly increments.
Shrinking newsprint capacity in North America and worldwide is also helping markets. Earlier in February, Norske Skog proposed shutting down another 450,000 tonnes of newsprint capacity in Europe and South Korea due to weak market conditions.
Late last year it was reported that some U.S. newspaper publishers in the West were finding newsprint supplies a bit short. However, U.S. daily newspaper inventories at the end of January grew by 59,000 tonnes, an additional three days of supply, but still 135,000 tonnes below a year ago, PPPC reported.
North American mill stocks, on the other hand, continued to decline in January, contracting by 13,000 tonnes, to 349,000 tonnes by month's end. This was 63,000 tonnes lower than a year ago.
North American mill inventories destined for overseas dropped by only 3,000 tonnes, to 134,000 tonnes in January, the same level as a year ago. Stocks intended for domestic shipment fell by 11,000 tonnes, to 215,000 tonnes, down 63,000 tonnes year-over-year.