North American Newsprint Export Orders Decline in March

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By: Debbie Garcia

Export orders for North American newsprint declined in March, adding to the downward demand trend domestically and causing inventories to grow, according to data released today by the Pulp and Paper Products Council (PPPC).

Consumption by U.S. daily newspapers fell 15.2% year-over-year in March, to 463,000 tonnes, and was down 12.8% through the first quarter to 1.383 million tonnes. Total U.S. consumption was somewhat better, showing an 11.1% drop year-over-year in March, to 589,000 tonnes, and an 8.5% decline through the first three months, to 1.775 million tonnes.

The data for March is particularly dismal considering that there were five Sundays while last March had four. This brought the year-to-date Sundays total to 13 vs 12 in first-quarter 2007. Newspapers are fatter on Sunday, tending to increase the consumption volumes.

North American newsprint production also fell. Mills produced 869,000 tonnes in March, down 8.3% from a year ago.

Through the first quarter, production totaled 2.611 million tonnes, a year-over-year decline of 8.9%.

U.S. mills fared better than Canadian mills. U.S. newsprint output of 353,000 tonnes in March, was off just 1.3% year-over-year, bringing the year-to-date total to 1.082 million tonnes, down 4.2% from first-quarter 2007.

Canadian newsprint production, however, fell sharply in March, by 12.6% year-over-year, to 516,000 tonnes, and was down 11.9%, to 1.529 million tonnes, through the first three months vs. a year ago.

The North American mill operating rate was 91% for both March and year-to-date, compared to 93% last March and 94% in first-quarter 2007.

U.S. newsprint mills ran at a rate of 94% in March and through the first quarter vs 91% last March and 93% in the first three months of 2007. Canadian mills, though dropped to a rate of 89% for both March and for the first three months vs. 95% last March and 94% in first-quarter 2007.

North American newsprint shipments fell sharply in March, by 11.5%, to 850,000 tonnes, bringing the year-to-date total to 2.619 million tonnes, a year-over-year drop of 3.9%, PPPC reported.

U.S. newsprint shipments were about flat in March, dropping by just 0.8% from a year earlier, to 355,000 tonnes, but Canadian shipments fell 17.9% year-over-year in March, to 495,000 tonnes, and were off 4.5% through the first quarter, to 1.538 million tonnes.

Despite restrained production, North American newsprint mills were unable to continue the trend in recent months to cut inventories. At the end of March, North American newsprint mills held 355,000 tonnes in stock, up 18,000 tonnes from a month earlier but still 110,000 tonnes lower than a year ago.

U.S. mills were able to reduce inventories last month by 3,000 tonnes, to a level of 53,000 tonnes, but Canadian mill stocks expanded by 21,000 tonnes, to 301,000 tonnes.

Even U.S. users’ stocks grew in March, increasing by 21,000 tonnes, to 794,000 tonnes, which was still 78,000 tonnes below a year ago. Inventories held by U.S. dailies were unchanged from February, ending March at 695,000 tonnes, down 78,000 tonnes from a year ago.

Exports were unable to offer alternate markets for North American producers in March, turning down overall for the first time this year. Overseas shipments in March plunged 26.4% year-over-year in March, to 166,000 tonnes, bringing the year-to-date total to 537,000 tonnes, a mere 2.1% ahead of a year ago, PPPC reported.

U.S. newsprint exports remained ahead of a year ago, with 39,000 tonnes shipped in March, up 7.2% from last March, bringing the year-to-date total to 121,000 tonnes, up 18.6% year-over-year. Canadian newsprint exports, however, fell 32.8% year-over-year in March, to 127,000 tonnes, and were down 1.8% through the first three months, to 416,000 tonnes.

All export markets were down in March but the steepest drops occurred in Western Europe (down 43.3%), Japan (down 29.8%) and non-Japan Asia (down 40.0%). Latin America fell just 3.8%, keeping its year-to-date total still 28.4% ahead of a year ago. All other markets were down year-over-year through the first three months, including Western Europe (down 4.9%), Japan (down 17.4%) and non-Japan Asia (down 16.1%).

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