(AP) Canadian paper giant Abitibi-Consolidated Inc. is confident it will be able to increase newsprint prices by $50 per metric ton in the third quarter, the company’s chief executive said Wednesday.
The hike will be justified because newspaper advertising sales have been growing, and the company’s customers are predicting improved ad linage in the second half of the year, said John Weaver, Abitibi’s president and chief executive. Customers have said they are expecting to pay more for newsprint, he added.
North American newsprint prices are currently about $505 a ton.
Weaver also said the company, which is the world’s largest newsprint manufacturer, doesn’t plan to restart its Sheldon newsprint mill in Houston this year. A restart requires greater newsprint demand and pricing, Weaver said. The mill has been shut down since late December.
Abitibi plans to take about 200,000 tons of newsprint downtime in the third quarter, similar to the 226,000 tons of newsprint downtime it took in the second quarter, he said.
Weaver also said Abitibi plans to take further downtime at its Lufkin, Texas, mill this summer, after it was shut down for a period in June due to high energy costs in the Lone Star state.
As for the company’s lumber operations, Weaver said Abitibi is looking to move more of its operations into value-added remanufactured products rather than shut mill capacity due to low lumber pricing. In the second quarter, lumber prices were down 15% compared with the previous year, but have recently begun to rebound thanks to the higher Canadian dollar, some capacity reductions across Canada, and Canada-U.S. lumber trade talks that are “progressing well,” Weaver said.
Shares of the company were at $6.58 early Wednesday afternoon, down 2 cents, or 0.3%, on the New York Stock Exchange.