By: James McLaren, special from Forestweb
(Forestweb) Newsprint was down again in every way in February — in production, shipments, consumption, and prices — except in total inventories, which rose more than the 10-year average. Statistics released last week by the Pulp and Paper Products Council (PPPC) in Montreal showed U.S. newsprint demand down 16.9% in February compared with a year earlier and consumption down 3.6%.
Total North American production in February was down 12% to 1.065 million tonnes, PPPC reported, and shipments were down 16.7% to 993,000 tonnes, compared with the relatively strong market of February 2001.
Total inventories among users were down 30,000 tonnes in February from the previous month. Most of that was among daily newspaper publishers. Stocks piling up at mills however led to a total inventory increase of 42,000 tonnes, PPPC reported, which “is right in line with the 10-year average increase of 39,000 tonnes.” At the end of February, North American mill stocks increased by 72,000 tonnes month-over-month to 495,000 tonnes, or 6.5% above the 10-year average. In the year-ago comparison, overall total inventories of 1.170 million tonnes in February were down 17.8% and at -7% were below the historical average for a sixth consecutive month.
Earlier this month Reel Time Report estimated average newsprint prices at $450/tonne in March, down $10/tonne from February and 29% below year-ago levels. One market observer noted that Canadian and U.S. producers continued to take significant downtime, but a drop in offshore exports and continued weak domestic demand continued to cause pressure on prices. He said inventories don’t appear excessive but in the context of a shrinking market are “alarming.”
PPPC reported total North American newsprint shipments in February were off by just under 17%, due principally (80%) to a contraction in North American demand. Though deliveries to overseas markets also fell significantly, they accounted for only a fifth of the decrease in North American shipments.
North American sales fell in all the major offshore markets with the exception of Japan (+12.8%). Shipments to Western Europe and other Asian countries suffered the most important setbacks, registering year-over-year decreases of 33% and 39% respectively, and accounted for almost 100% of the drop in overseas shipments.
In February, newsprint consumption in the U.S. fell 3.6% year-over-year, the smallest decrease registered since the end of 2000, PPPC said. The disparity between consumption (-3.6%) and demand (-16.9%) in the U.S. can be explained by the fact that consumers were building significant inventories in February 2001. Moreover, ad linage in U.S. dailies in January was down only 2.3%, the smallest decrease in 11 months. Whereas housing starts and retail sales in the U.S. continued showing healthy growth in February, vehicle sales were slightly down (though compared to a strong February 2001) and consumer confidence remained below 100, though it seems to have steadied in the 95 range. In February, U.S. dailies saw their inventories shrink 4% (-38,000 tonnes) from the preceding month to 39 days of supply.
NORTH AMERICAN NEWSPRINT STATISTICS
|Feb.||% change||Year-to-date||% change|
|Source: Pulp and Paper Products Council, Montreal. From Forestweb.|