More than 5 Million Metric Tons of Global Newsprint Capacity at Risk of Closure
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RISI, Boston, Mass., USA, reports a high risk of closure for more than 2 million metric tons of the 7 million total metric tons of newsprint capacity in North America over the next five years. These closures, as well as 2.5 million metric tons of shuts in Western Europe and more than 1 million metric tons in Asia, will become necessary as newsprint demand declines across the globe, according to the recently released Global Newsprint Risk of Closure Study.
The study notes that global demand for newsprint has decreased from 39.6 million metric tpy to 31.6 million metric tpy currently, and reveals what the market will look like in 2016.
This soft demand in Europe and North America, combined with new machines coming online in Asia, are creating an increasingly competitive global marketplace. This is particularly bad news for North America, where the export market has become increasingly important, accounting for more than 30% of shipments and rising.
Along with increasing competitive pressures, North American producers continue to struggle with cost inflation. These combined market pressures place 2.93 million of the 7.0 million metric tons of total capacity at the highest risk of closure.
The Global Newsprint Risk of Closure Study uses a range of company and machine risk criteria to identify the newsprint machines most likely to close in the near-term, in North America, Europe, and Asia. The methodology indicates forced and likely proactive closures, as well as potential conversions and divestments.
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