Magazine article Editor & Publisher

U.S. Newsprint Prices Continue to Erode at Start of 2007

Magazine article Editor & Publisher

U.S. Newsprint Prices Continue to Erode at Start of 2007

Article excerpt

The slow and steady downturn in North American newsprint markets continued in January, with statistics released today by the Pulp and Paper Products Council (PPPC) indicating negative January numbers for all but inventories.

At the same time, various sources lately indicated further deterioration in newsprint prices. For Feb. 20, FOEX Indexes Ltd. listed its PIX index for 30-lb newsprint in the U.S. at $605.94/ton, off $1.85/ton from the previous week and down $21.81/ton from the beginning of 2007.

Deutsche Bank said in a Feb. 20 report that the official newsprint price fell $10/ton in January, after dropping $35/ton over the last few months. The Feb. 1 U.S. price for 30-lb newsprint was US$630/tonne, down from $640/tonne on Jan. 1 and $660/ton on Dec. 1.

The Reel Time Report's February issue quoted a January price for 30-lb newsprint of $620/ton, down from the peak of $655/ton last summer. The publication's forecast is for pricing to move lower throughout 2007.

In a Feb. 6 report, Salman Partners indicated a current newsprint price of $612.93/ton, down almost $31/tonne off the high in early June 2006.

Demand still dropping. Prices are falling in tandem with demand. The PPPC's recent report did not contain January consumption data due to a delay in receiving the figures from the Newspaper Assn. of America (NAA). However, preliminary total U.S. demand for January was included and indicated a year-over-year drop of 11.4%, to 705,000 ton.

Because the number of Sundays this January totaled four compared to five last January, the recent statistics are not as dire as they appear on the surface. Sources estimate that an additional Sunday tends to boost consumption by 2%-3%, and should be taken into account when comparing data for the two months.

The PPPC also reported that North American newsprint shipments declined 10.8% in January compared to a year earlier, with domestic deliveries posting a 9.6% year-over-year drop and overseas shipments trailing 17.2% behind last January.

In addition to the decrease for both domestic and overseas shipments, North American imports might be further undermining the market, according to FOEX, which reported imports of newsprint from Asia to North America were up toward the end of 2006. However, PPPC data show North American imports from overseas totaled just 7,000 tons in January, a year-over-year decline of 58.1%.

North American newsprint mills produced just over one million tonnes in January, down 4.2% from January 2006, but the operating rate was up 1.0% from last January, to 95%. …

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