AS reported by RISI
AbitibiBowater told North American customers it would increase the price of newsprint by $60/tonne during the first quarter of 2008, through a series of $20/tonne monthly increments in January, February and March. Contacts said the company's motivation for making the announcement this far ahead was to give its newsprint customers reasonable notice of what to expect.
AbitibiBowater is the world's largest newsprint manufacturer and owns about 45% of North American production capacity. It is midway through a 30-day strategic review of its assets that is widely expected to result in significant capacity closures. Sources said that while buyers were "not delighted" by the announcement a lot of understanding existed concerning the company's financial predicament. The price of newsprint has fallen 17% in the past year, and since the AbitibiBowater merger was announced on January 29 the company has lost about two-thirds of its equity value.
Some producer sources also characterized the North American newsprint market as having become noticeably tighter lately, and forecast that rebating of the $25/tonne fall increase that producers have struggled since September to implement would be less widespread in November than many customers anticipated.
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