Newsprint Price Increases Begin To Bite Into US Newspaper Earnings

By: E&P Staff

Philip M. Stone | Follow The Media

North American newsprint pricing is up some 22% this year, sitting this week at $621.52 for standard 30-lb newsprint, and that $111 per metric tonne hike since January is beginning to bite in spite of newspapers using less.

Producers had wanted the price increases to be much more, and they were able to contract the North American markets a bit by higher exports, but those are now falling back, meaning more supply in the North American market so could pricing stabilize, even drop a bit?

The FOEX Indexes price has stayed pretty stable for the past eight weeks – up only some $5 – indicating it’s not easy getting prices up. Producers are still 20% shy of where they want to be – at the 2009 January price of $749. Consequently, producers will continue to do what they can to keep supplies short to get prices up – for instance, look for extended production breaks between Christmas and New Year.

But according to Gracia Martore, Gannett President and CEO, newsprint producers won’t have an easy time getting prices much higher. She told financial analysts in a telephone conference call following the announcement of Gannett’s poor newspaper Q3 earnings, “Here in North America a pattern of regional fragmentation persists, with a continuing east-west price divide; in fact, an announced increase for October failed to garner support, confirming that market conditions remained inconsistent across the U.S… Looking to the fourth quarter, we expect fourth quarter newsprint usage prices will be higher than a year ago, but consumption is expected to be lower once again. “

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