Abitibi-Consolidated to Raise Newsprint Price

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By: E&P Staff

In a move that’s likely to rankle large newspaper publishers, Abitibi-Consolidated of Montreal said it will raise its newsprint price by $50 a tonne on Feb. 1.

Executives at the world’s largest newsprint producer are confident the price hike will go through, but some analysts aren’t so sure: “We believe that newsprint has emerged as the poster child for a paper grade in secular decline,” D.A. Davidson analyst Steven Chercover told Reuters.

Newsprint producers in the last year and a half attempted three price increases. But the efforts have met only partial success because of the weak demand in the newsprint market. At the end of 2003, newsprint list prices were at $530 a tonne.

Gannett executives began voicing their displeasure last month, saying that they expect small increases in 2004 but would resist paying significant hikes.

Abitibi hopes the move will help shore up its profit picture. The company, with two-thirds of its production coming from Canadian mills, has been hurt by a sharp rise in the Canadian dollar during the past 12 months.

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