U.S. and Canadian newsprint production diverged during June, the most recently reported month. According to the Pulp and Paper Product Council, U.S. newsprint production dipped by 6.7 percent to 423,000 metric tons. The decline for June pushed the six-month total to 2.589 million metric tons, a 13.8 percent drop from last year’s six-month total.
While U.S. production posted a sharp drop, Canadian newsprint production strengthened for the month. According to the PPPC, Canadian newsprint production climbed 2.6 percent to 671,000 metric tons for the month. While production improved for the month, year to date production is still off sharply from figures the same time last year. According to the association, production over the first six months stands at 4.130 million metric tons, a 5.8 percent drop from last year’s total.
Combined, North American newsprint production posted a 1.2 percent decline for June, and a 9 percent drop over the first six months of the year.
Along with the drop in production, North American newsprint producers saw their operating rates continue to erode. For June, helped by the sharp drop in the operating rate at U.S. newsprint mills the average operating rate stands at 86 percent of capacity for both June and the first six months. This compares with last year’s June figure of 88 percent of capacity and last year’s six-month average of 94 percent of capacity.
While overall production is a negative, optimism is seen with the sharp improvement in newsprint shipments. For June, total shipments stand at 1.177 million metric tons, a 2.9 percent jump from last June’s numbers. While shipments for the month are up nicely, for the first six month shipments remain down, by 7.9 percent to 6.72 million metric tons.
With North American newsprint producers looking to push through price increases for their finished product, some consumers may be looking to build inventories before newsprint producers push through their price hikes.