That, combined with much reduced capacity and coupled with soaring energy prices, has resulted in a price shock. In the past 24 months European mills have responded by shutting almost a fifth of their newsprint capacity, says a buyer for a large British newspaper group. The pandemic, with people working from home, meant even fewer newspaper purchases, which depressed demand for newsprint again and increased the pain for paper suppliers. The mills “moved from being price takers to being capable co-participants in a declining market,” says Tim Woods of IndustryEdge, a research firm for Australia and New Zealand’s forestry and paper industries. For JCS Volga, a Russian mill, newsprint used to account for 70% of production now half of what it makes is packaging. UPM, a Finnish firm, announced this year the sale of its Shotton newsprint mill in Wales to a Turkish maker of containerboard and packaging. Many mills are converting machines to make packaging for e-commerce. Norske Skog, a Norwegian pulp and paper firm, said in June it would close its 66-year-old Tasman Mill in New Zealand, for example.

That hesitance has disappeared mills are taking out newsprint capacity and diversifying. Many hesitated to shut massive machines costing hundreds of millions of dollars. Price-taking paper mills suffered in silence. The papers were able to hammer down the cost of newsprint from firms fighting for business as demand declined. Paper mills had the worst of it for years as newspapers reduced pagination, went wholly digital or shut for good. Your browser does not support the element.Įnjoy more audio and podcasts on iOS or Android.

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