Global Newsprint: March Inventory Data Disappoint Analysts

as reported by Dow Jones newswire
Nearly all segments of March's newsprint inventory and production data from the Pulp and Paper Products Council were disappointing for industry analysts.
"Mill inventories are out of control," said Kevin Mason, paper and forest products analyst for Equity Research Associates. "Dailies [newspapers] are cutting back and trying not to buy [newsprint], but consumption just falls off the map."
Inventories at all U.S. users of newsprint declined 4.5% in March from a month earlier to 679,000 metric tons from 711,000 tons in February and was off 15.0% from the 799,000 a year ago. This might be supportive if it weren't for the fact that total U.S. consumption fell 28.5% from a year ago, the analysts said.
As a result, newsprint price declines accelerated in April with list prices falling by as much as $40 a metric ton, said Mark Wilde, market analyst for Deutsche Bank.
Wilde and Mason keyed in on news the world's largest newsprint company Abitibi-Bowater was in chapter 11 bankruptcy proceedings.
Abitibi-Bowater controls about 40% of North American newsprint production.

"More companies can be expected to go bankrupt," Mason added.
The industry still may have 1.5 million tons of potential production idled for the rest of 2009, and more will need to come out in 2010,