News

Evidence that newsprint prices are falling across Europe is gathering after both a manufacturer and a user reported first-quarter drops.

Results for the first three months of the year from Swedish papermaker Holmen claimed that the price of newsprint had fallen in the past year by 4%, while deliveries were down by 2% year-on-year.

In its results, which showed a slight increase in overall turnover and a drop in pre-tax profit, the Swedish company described the market for newsprint as “weak” and said that profits had been hit by higher input costs and the weak dollar.

Operating profit for Holmen’s newsprint and magazine paper division, Holmen Paper, was £6.8m (SEK80m) for the period, exactly half of the figure a year earlier, on turnover which was stable at £215m (SEK2.5bn).

“The deterioration [in profit] was due to lower selling prices, higher cost of wood and a weak US dollar… However, higher volumes had a favourable effect on the result,” the company said in its statement.

The drop in newsprint prices comes despite the industry’s wider efforts to tighten supply and push up prices through mill closures. Holmen itself is planning to close a paper machine representing 110,000 tonnes of capacity at its Hallsta mill in Sweden.

Meanwhile, UK publisher Daily Mail & General Trust said in its first-half results that its newsprint prices had fallen in January this year, although the drop offset a rise a year earlier.

The publisher, which is also behind freesheets Metro and London Lite, said, however, that it considered volatility in newsprint prices to be a risk for the second six months of the year.