Selective Cuttings

Newsprint exports continue long-term decline in 2012

February 12, 2013

In 2012, Canada’s total newsprint exports continued their long-term decline. In percent terms, overall exports fell by 16%, including losses to Canada’s largest three export markets: the U.S. (-9%), India (-27%) and Brazil (-6%).

Canadian newsprint exports (2003-2012)

 This combination stacked-area/line graph shows a tight, linear decline in Canadian newsprint exports to the U.S.A. and Overseas over the 2003-2008 period, with a strong dip below this trend over 2009-2011, but a return to it in 2012.

Newsprint exports to the U.S. have been in rapid decline since 2003, though overseas exports had been stable until recently. In 2009 the pace of the decline to the U.S. accelerated then lessened considerably over 2010 and 2011, while overseas markets appreciably expanded.

There has been some debate over whether overseas markets represent a long-term growth opportunity for Canadian newsprint exporters. Some industry representatives have been arguing (largely based on 2010 data) for the long-term growth of overseas markets. Others have argued that the expansion of overseas shipments in 2010, as well as the relatively slower pace of decline in U.S. markets over 2010/2011, represented a bounce-back from the depth of the 2009 slump (which was a result of both structural and cyclical decline), rather than new strength in these markets.  The recently released 2012 data appear to have settled these points, as decline in both U.S. and overseas returned total exports exactly to expectations based on a linear trend from 2003-2008. In fact, other than the collapse of 2009, the total annual decline in exports in 2012 (670 000 tonnes) tied 2007 as the largest year-over-year decline in total newsprint exports on record. A simple linear trend suggests on-going export declines of approximately 520 000 tonnes per year, roughly the output of two mills per year.

When combined with the continued recovery in the lumber sector, this trend reinforces the need to continue to find and develop new product and opportunities for use of pulpwood and wood chips.

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