NEWSPRINT USE FALLS SHARPLY IN APRIL

By: Jim Rosenberg Publishers' Inventories Are Growing


U.S. dailies used 727,000 metric tons of newsprint in March, 9.7%
less than a year earlier, according to the Newspaper Association
of America (NAA). Preliminary figures show a 13.3% drop in April.

End-of-month publishers' inventories in March totaled a little
more than 1.1 million tons, representing a 46-day supply -- up
16.9% from the 951,000 tons (34 days) in March a year ago. While
projections show April stocks dropping to just under 1.1 million
tons, that is 20.9% higher than the year-earlier figure.

For all U.S. newsprint users, April consumption fell 16.3%, to
903,000 tons, and stocks rose 17%, to almost 1.42 million tons,
according to Montreal's Pulp and Paper Products Council.

While neither the NAA's Nick Nocella nor former Times Mirror Co.
newsprint negotiator Bernard Bottomley could remember a decline
in consumption as steep as that projected for April, both
analysts cautioned that this year's negative numbers result from
comparing consumption in today's very poor ad environment to the
record volume used in early 2000.

"I don't know that in the history of newsprint we've ever seen a
number that dramatic," said Bottomley. But the first quarter of
2000, he added, "was extraordinarily strong" for newspapers,
which used record or near-record volumes of newsprint at least
through April.

He said it was late spring before a general and gradual decline
in advertising began setting in. For that reason, Bottomley
foresees for "the second half of this year ... a more modest set
of comparisons."

Nocella said a truer picture emerges when April figures are
averaged for the past five and 10 years, showing respective
decreases of a little more than 8% and 6%. What would really
"raise a red flag," he said, is April figures that fail to exceed
those for March. In fact, month-to-month consumption did rise, by
17,000 tons.

Bottomley confessed to being "a little surprised at the 13.3%"
fall-off in April. Talks with publishers, he said, make him
pessimistic about May when compared to an April he thought would
show an improvement over March. "I don't think they're going to
look good when we see the May numbers," he said.

With publishers' stocks sticking at around 1.1 million tons and
no upturn in consumption predicted, Bottomley thinks mill
inventories will rise. He said he believes it's only a question
of when producers will roll back the remaining $25 of their March
1 $50-per-ton price hike. His prediction? Probably by the end of
this month.



Jim Rosenberg (tech@editorandpublisher.com) is a senior editor covering newspaper technology for E&P.



Copyright 2001, Editor & Publisher.