Newsprint Demand Remains Depressed Through First-Half of '06

By: Debra Garcia U.S. consumption of newsprint remained down in June, with daily newspapers using 7.6% less newsprint than in June 2005, and year-to-date consumption of 3.5 million tonnes is down 7.4% from first-half 2005, according to data released by the Pulp and Paper Products Council (PPPC).

Although U.S. dailies consumption is considered a truer picture of the market, total U.S. consumption shows less of a decline. Taking into account usage by commercial printers, total consumption indicates a year-over year decline of 5.7% in June and a 5.4% drop in the year-to-date figure. Total U.S. demand for newsprint totaled just over 4.4 million tonnes through the first six months, a decline of 5.4% from 2005?s first half.

North American newsprint production fell 6.3% year-over-year for both June (952,000 tonnes) and first-half 2005 (nearly 6.0 million tonnes). U.S. mills actually saw a sharper decline in June (down 6.4%) than Canadian mills (down 6.2%), although the six-month total newsprint production for the U.S. (nearly 2.4 million tonnes) was down just 4.1% while Canada (3.6 million tonnes) fell by 7.7%.

Lower production, however, helped reduce North American newsprint inventories, which dropped by 33,000 tonnes during June, according to the PPPC. However, this was still 6,000 tonnes higher than a year earlier.
Consumer stocks of newsprint remain low, however, with all U.S. users? inventories at the end of June down 7,000 tonnes compared to a month earlier but 88,000 tonnes lower than a year ago. Daily newspaper inventories rose 11,000 tonnes in June but still remained 64,000 tonnes below levels of a year ago.

North American newsprint exports remained depressed in June, showing a 17.2% drop from a year earlier. This brought the year-to-date figure to just over 1.0 million tonnes, down 17.0% from first-half 2005. With the exception of Latin America, all markets showed a decline.

Comparing Jan.-June 2006 to a year ago, newsprint shipments to Latin America were up by 15.2% while they fell sharply to the other major markets, including Western Europe (down 46.5%), Japan (down 36.3%), and non-Japan Asia (down 20.2%).

Both 2005 and 2006 had the same number of Sundays for both the month of June and the first half.

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