China Calls for a Newsprint Holiday

We heard from a source today that China will shut down all its newsprint machines from February 5th to February the 28th.  Isn’t that interesting. Wonder why.  Energy issue? Profitability concern? High domestic inventories?

This newsprint holiday will take roughly 300,000 tonnes of newsprint out of the market. Some buyers of Chinese newsprint from outside the country have already begun to place additional orders with North American mills, so this event will be of some help to domestic newsprint companies.

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6 responses to this post.

  1. Posted by John Fritts on January 8, 2010 at 6:41 pm

    I know NOTHING about the Chinese “newsprint” market, but the Chinese New Year falls on February 14 this year and it is not unusual for Chinese manufacturers to close several weeks in celebration. The holiday drives me crazy in the “automotive” supplier market. It is a very different culture, still influenced greatly by ancient traditions, combined with communism. The reason for the newsprint holiday may simply be the New Year celebration and nothing to do with commercial drivers. Regardless of the reason(s) the shutdowns will still have a significant impact on global newsprint supply.

    Reply

  2. I appreciate your post and insight. Thanks very much.

    Reply

  3. Posted by Frank on January 8, 2010 at 7:38 pm

    These shutdowns WILL NOT have any impact on the complete oversupply of newsprint unless you put another 0 on the end and its 3 million tons. Abibow has paraylzed the industry, and White Birch and Kruger either seek credit , government, or union relief instead of shutting down high cost machines that need the market to be 650/mt and the canadian dollar under .90 to even break even. What a mess. They cannot or will not grasp the concept that prices will not go up until SIGNIFICANT suppply is PERMENETLY removed. Dollar is up to .97. pulp and waste are going up, yet they do nothing but beg for orders from Gannett, Cox, and McClatchy. The mantra, especially in Canada is, “keep the machines running for postive cash flow”, and that is why it is taking so long to balance capacity with consumption. Amazingly, a successful model is in place, with the uncoated free sheet mills impsoing their will on pricing because of their ability to shut down machines to keep things in balance.

    Reply

  4. Thanks for your comment and I agree that a sustained price advance will not begin until massive permanent closures occur.

    Reply

  5. Posted by Sunil Poddar on January 9, 2010 at 1:53 am

    As far as I have information about Chinese Newsprint Mills closures, they are trying to increase the prices in domestic market as waste paper prices are going up. Last 10 years there was anti dumping duties on newsprint from major countries, so I do not think there will be much import from outside.

    Reply

  6. Thanks for the comment Sunil. Just to clarify, the duties of the last 10 years that you mention – do they still apply to newsprint companies trying to export to China in 2010, as they have in years past?

    Reply

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