World newsprint prices soar as producers battle for survival

By Kevin Conley, Senior Economist, Graphic Papers, RISI

CHARLOTTESVILLE, VA, April 24, 2008 (Viewpoint) - Although several world regions managed to see positive growth, global newsprint demand retreated 1.2% in 2007, dragged under by weak demand in western Europe and a double-digit decline in North America. Further weakness in North America and western Europe, combined with the downward pressure from moderating global economic growth, will prevent world newsprint demand from staging any rebound in 2008.

Despite the lack of growth in global demand in 2008, rising production costs and the rapid tightening of supply has pushed newsprint prices sharply higher in most world markets. The financial collapse of the newsprint industry in 2007 has led to unprecedented levels of capacity closures. Compared to 2007, global newsprint capacity is expected to drop 2.6% in 2008, representing a single-year record reduction of 1.1 million tonnes of newsprint supply from the world market.

This is an excerpt from a full story that is available in RISI's Pulp & Paper News Service.