By: Debra Garcia North American newsprint markets continue on a downward course, with everything but mill inventories and exports losing ground from a year ago, August statistics from the Pulp and Paper Products Council (PPPC) indicate.
Released on Sept. 25 without the latest U.S. consumption figures, the data nonetheless shows that total U.S. demand for newsprint fell 11.6% year-over-year in August, reaching just under 5.2 million tonnes through the first eight months of 2007, 11.1% below a year ago.
The number of Sundays in August for both years was the same, but there was one additional Sunday during
January-August 2006 vs 2007.
In August, North American newsprint mills produced 942,000 tonnes, which was 3.0% less than last August, and the year-to-date total of 7.6 million tonnes was down 4.3% from January-August 2006, the PPPC reported.
The North American newsprint operating rate was 95% in August, 1% above a year earlier. Through the first eight months of 2007, the rate was unchanged from a year ago.
Operating rates in August were higher in the U.S. (97%) than in Canada (93%), but on a year-to-date basis there was only a 1% difference between mill operating rates in the U.S. (95%) and Canada (94%).
Newsprint exports remained strong in August, reaching 223,000 tonnes, 7.3% ahead of last August. For
January-August 2007, North American newsprint exports totaled nearly 1.6 million tonnes, 9.0% more than a year earlier, according to the PPPC.
The key export growth area was Western Europe, up 69.9% on a year-to-date basis. No other markets came close and most were down year-over-year. The exceptions were Latin America (up 0.3%) and ?Other? (up 18.5%).
North American newsprint imports from overseas remain down, totaling just 58,000 tonnes through the first eight months of this year, 45.3% below a year ago, the PPPC reported.
Given the market conditions, North American newsprint producers have not been successful in implementing price hikes this year. A $25/tonne September increase reportedly has failed, with prices actually heading in the other direction.
According to Mark Wilde, industry analyst with Deutsche Bank, prices slipped $10/tonne in August and another
$5-$10/ton in September. However, he expects this erosion might end soon given that newsprint prices are low, the Canadian dollar is strong, and chip costs in British Columbia are surging.
A strike of forestry workers in British Columbia is causing chip shortages leading to some outages at mills, including those of newsprint producers Catalyst Paper Corp. and Howe Sound Pulp and Paper Ltd.
The expected completion of the merger of Abitibi-Consolidated Inc. and Bowater Inc. in the fourth quarter could also lead to the newly combined company deciding to permanently close additional newsprint capacity, according to various reports.
Comments
No comments on this item Please log in to comment by clicking here