With falling advertising sales due to global economy downturns, newspapers face new pressures next year as newsprint producers try to push through steep price increases. The world’s second-largest newsprint producers are currently negotiating with customers to increase prices by up to 20%. Newsprint producers believe that recent capacity cuts give them the market power to compensate for years of rising costs, flat prices and falling margins.

Newsprint producers claim to have been under a drastic margin squeeze for several years and see a momentum for increased prices. All of Europe’s big newsprint producers are dealing with losses as demand continues to fall because of the switchover to Internet publication. However, woo, energy, and transport costs have risen significantly.

In response, European producers have committed to cut some 1m tons of capacity – 6% of the total. As cost pressures begin to ease, producers raise margins. European producers are also benefiting form a decline in imported newsprint as North American producers ignore their home markets. North American producers saw even more falling demand because the switch to Internet has taken hold faster, but they have been quicker to consolidate.

Tags: newspaper, newsprint

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