Derek Mahlburg, Graphic Papers Economist, RISI
Oct. 29, 2012
Newsprint demand in most major world regions is declining rapidly, and the few remaining growth markets are slowing, which is expected to result in a retreat of 1.6% for 2012 and continued losses over the next few years. Most dramatically, North American newsprint demand has dropped 63% from its most recent peak of 13.1 million tonnes in 1999, while Western European demand has fallen 26% and surpassed the North American market simply by virtue of deteriorating less quickly.
Although a slower migration to digital media by consumers enabled print newspapers to hold on longer in Western Europe, we expect austerity measures and the continued penetration of digital media to help Western European demand declines catch up to those of North America.
It is no secret that newsprint demand in developed economies has been in a state of permanent retreat for some time, but until 2008, growth from developing regions, especially Asia, allowed global newsprint demand to grow or at least remain flat. However, this trend has likely ended, as countries like Japan and South Korea have already joined the march downward, and China has shown little sign of reclaiming its mantle as the chief engine of newsprint demand growth.
This leaves rapidly expanding countries like India and Malaysia as the main drivers of Asian demand growth, and given the small size of the world's remaining markets, global newsprint demand growth as well. Even with the greatly reduced North American and Western European markets, the developed Western markets, along with Asia, account for over 80% of global newsprint demand. Pockets of healthy demand growth can be found in Latin America, the Middle East, Eastern Europe and Africa, but even added to the growth from emerging Asian economies, this is not nearly enough to make up for the continued retreats in North America and Western Europe.
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Derek Mahlburg, Economist for North American Graphic Papers and co-author of the monthly Paper Trader, works out of RISI's Charlottesville, VA, office and can be reached at firstname.lastname@example.org.
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