North American newsprint prices are expected to start falling in April, according to sellers and buyers who spoke with Fastmarkets’ PPI Pulp & Paper Week.
“There’s been some pressure to move down prices for newsprint. Late orders in March going into April will be at lower prices,” a supplier told P&PW.
Flat prices for the last six months
UPM Communication Papers earlier last week said it will permanently close a 165,000 tonnes/yr paper machine at its Schongau, Germany, mill by the end of the second quarter. The company also said it will accelerate the earlier announced shutdown of production at its 320,000 tonnes/yr newsprint Steyrermühl mill in Austria by six months, to the end of the second quarter.
“Consumption has definitely continued to shrink. … UPM decided to shut down operations in Europe six months earlier, which tells you how the (global) market is,” a buyer commented.
On a call with analysts on Mar. 15, GreenFirst Forest Products president Michel Lessard said, “(Newsprint) paper prices have decreased slightly from what we saw at the end of the year.” GreenFirst continued to work on ramping up and increasing production on a second paper machine at its Spruce Falls newsprint, and book and packaging paper mill in Kapuskasing, ON, company officials said last week.
The newsprint prices in North America have been flat for the last six months, after increasing by more than 50%, or $315/tonne, over 2021 and the most part of 2022, when the markets were recovering from the Covid-19 pandemic, according to P&PW’s price survey.
Prices for 27.7-lb, 45-g newsprint in March were unchanged over February, according to industry contacts.
Demand for newsprint still weak
Contacts reported in March that demand for newsprint was still soft, as customers still had paper on their floor and were not buying much extra.
“There’s slowdown in our order file. Printers’ demand is less (and) they’re dragging down inventory,” a supplier said earlier this week.
“March demand was definitely better than January and February, but still not great. … Some inventory has been declining,” another producer stated.
Data from the Pulp and Paper Products Council (PPPC) revealed that the North American newsprint mill inventory level increased further in February over January, to 139,000 tonnes, and was 30% higher than February 2022.
“I don’t think my customers are very busy. … They’re working through their inventories right now,” a merchant said.
Mill downtime to offset soft demand
“Newsprint demand was still down (in March), and we took some downtime to offset that,” another paper producer stated.
A different producer confirmed that “mills are adjusting production to orders” by taking downtime, and, he said, “we’re doing that too.”
The Q1 theme was consumer inventory. Q2 is how much additional inventory has to come out of the system and how long it will take.
In the first two months of 2023, North American newsprint demand declined 16% to 196,000 tonnes, compared with January-February 2022 demand, according to the PPPC data. Mill production fell 3.7% to 348,000 tonnes in the period, and the mill operating rate declined from 84% to 80%.
This article was first published in PPI Pulp & Paper Week, the industry’s most trusted pulp and paper market news and prices for North America. Speak to our team to find out more about our news and market analysis services.
