North American Newsprint Consumption On a Downward Spiral

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By: Debra Garcia

North American newsprint consumption continued on its downward spiral in August, overshadowing overall healthy improvement in export orders, according to a new study by the Pulp and Paper Products Council (PPPC).

U.S. daily newspapers consumed 8.2% less North American newsprint in August than a year earlier, although last August had one additional Sunday. This brought the year-to-date figure to just over 5 million tonnes, a drop of 4.9% from a year earlier. Both eight-month periods had 35 Sundays.

Total U.S. consumption fell by an even larger 9.1% in August versus last August, bringing the year-to-date figure to just under 6.2 million tonnes, a year-over-year drop of 5.3%. Total U.S. demand reached 762,000 tonnes in August, down 6.4% year-over-year, bringing the year-to-date figure to just over 6.2 million tonnes, off by 6.6% from the same eight-month period in 2004.

Canadian demand, however, was up by 2.0% in August compared to a year ago, and was down by just 1.2% through the first eight months compared to the same period in 2004.

According to the PPPC, the latest data shows that ad linage in U.S. daily newspapers continues to slide. A 1.2% decline in July brought year-to-date ad linage to 1.5% below a year ago.

In August, the mean grammage for North American domestic shipments was 47.3 g/m2 and reached 47.6 g/m2 after eight months.

U.S. dailies held 28,000 tonnes more newsprint in inventory at the end of August than a year earlier. This was the equivalent of 43 days of supply, three days less than the prior month, which was in line given the seasonal pick-up expected in the coming months, the PPPC commented.

A 17.8% year-over-year increase in overseas shipments in August helped to offset some of the decline in domestic demand. However, not all export destinations improved. While August shipments to Western Europe (+19.0%) Latin America (+12.5%), and non-Japan Asia (+25.3%) were all up sharply deliveries to Japan plummeted 27.5%. Through the first eight months overseas shipments reached nearly 1.7 million tonnes, 5.1% ahead of a year ago.

Total North American shipments reached just over 1.million tonnes in August, down 1.6% from a year ago. This brought the year-to-date figure to nearly 8.5 million tonnes, down 4.0% from the same eight-month period in 2004. While overseas shipments were up sharply, domestic shipments fell 5.5% year-over-year in August and were down 6.1% year-to-date.

The biggest drops in domestic shipments were to the U.S., where levels fell year-over-year by 6.4% in August and by 6.6% year-to-date, while deliveries to Canada were up 2.5% in August and down 1.3% year-to-date.

North American newsprint mills produced just over 1 million tonnes in August, down 2.8% from a year earlier. This brought the year-to-date figure to just over 8.5 million tonnes, a year-over-year decline of 4.4%.

The North American operating rate was 94% in August compared to 95% a year earlier, and stood at 95% through the first eight months of 2005 compared to 96% for the same period in 2004.

U.S. production dropped year-over-year by 4% in August and by 4.1% year-to-date, while Canadian production was off 1.7% in August and by 4.6% year-to-date. U.S. mills ran at 95% in August, 1% lower than last August, but the year-to-date operating rate was up year-over-year by 1% to 96%. For Canadian mills, however, operating rates were down year-over-year in August (93%), by 1% and year-to-date (94%), by 2%.

North American mill inventories rose just 8,000 tonnes in August due to an increase in stocks designated for the export market. At 354,000 tonnes, inventories are 5.1% below the five-year average, the PPPC reported.

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