Newsprint production, demand, prices and trends

Emmy D’Silva rocks the house at the Kochi Printers Summit

Emmy D’Silva at the Wan-Ifra Indian Printers Summit in Kochi

Emmy D’Silva received the only standing ovation at the Indian Printers Summit in Kochi last week. This was because he kept the audience of newspaper production and advertising personnel alert and awake with his cogent blend of facts, experience, and good humor. He likened the purchasing of the vital lifeblood of the printed newspaper, newsprint – to a mixture of informed trend-watching and risk-taking based on an organization’s projections of its demand and its ability to predict forward prices and its cash generation.

Firstly, D’Silva contrasted the sinking global demand for newsprint with the still somewhat buoyant Indian demand, which has also taken a serious hit over the past years and not just during the pandemic. Global demand for newsprint is now approximately one-third of the 33.9 million tons in 1995, at 11.45 million tons. Simultaneously, Indian demand rose from 712 thousand tons in 1995 to 2.53 million tons in 2018, and then fell drastically in 2019 and further declined to a low of 1.06 million tons in 2020, gradually recovering to 1.37 million tons in 2022. Thus while the Indian news media recovery is still not as rosy as some claim, it is nevertheless still somewhat bucking the global trend of digital media dominating the news industry in print.

However, D’Silva showed that there is currently an excess global newsprint capacity of 2 million tons, and explained that the shutdown of these machines and mills and changeovers to more lucrative varieties of paperboard are inevitable. His global demand projections show small declines in demand in 2023; and then some steadiness till 2026, and 2027, when demand is expected to fall by 3.2% and 5.8% respectively.

The Indian newspaper currently imports about 64% of its consumption while the balance is sourced locally. While the global mills are in the main at 79% of their operating capacity – only Japan, Korea, Canada, and the US mills at 86% and 88% of capacity utilization are healthy. The Indian newsprint mills are closer to 50% in their operating to capacity ratio. 

D’Silva expects mills below 80% operating capacity to shut down their newsprint machines. According to him, anything less than 85% utilization is perilous for newsprint manufacturers – another reason that he is not optimistic about the newsprint opportunity for domestic producers. (The other reason is their inability to economically produce anything lighter than 45 gsm paper, while the publishers require 40 to 43gsm newsprint to be viable and some are even experimenting with 39gsm.)

D’Silva forecasts that newsprint prices will remain fairly benign till 2027. He expects the 2023 price of US$ 678 per ton to decline to US$ 623 in 2024 and then to rise to US$ 653 in 2025, again to rise to US$ 683 in 2026, and then to slightly fall to US$ 664 in 2027. He pointed out that varying prices of oil or energy are critical for all purchases both because of their use in the production of paper and its logistics. There are considerable logistical costs, including warehousing and the current US$ 30 customs duty that transform a mill cost of US$ 490 to a landed cost of US$ 705 to the Indian newspaper plant.

His key message at the end of the highly interactive presentation was once again – to paraphrase his words, “Remain loyal to your newsprint suppliers and their local distributors. They serve you well with their buffer stocks and warehouses and logistical help. You must look after them well and it is important for your business to keep the newsprint manufacturing mills running viably with your own fair and businesslike dealings.”

Several grammatical corrections have been made to this article on 6 October 2023 by the author.

In 2024, we are looking at full recovery and growth-led investment in Indian printing

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. It created the category of privately owned B2B print magazines in the country. And by its diversification in packaging, (Packaging South Asia), food processing and packaging (IndiFoodBev) and health and medical supply chain and packaging (HealthTekPak), and its community activities in training, research, and conferences (Ipp Services, Training and Research) the organization continues to create platforms that demonstrate the need for quality information, data, technology insights and events.

India is a large and tough terrain and while its book publishing and commercial printing industry have recovered and are increasingly embracing digital print, the Indian newspaper industry continues to recover its credibility and circulation. The signage industry is also recovering and new technologies and audiences such as digital 3D additive printing, digital textiles, and industrial printing are coming onto our pages. Diversification is a fact of life for our readers and like them, we will also have to adapt with agility to keep up with their business and technical information needs.

India is one of the fastest growing economies in nominal and real terms – in a region poised for the highest change in year to year expenditure in printing equipment and consumables. Our 2024 media kit is ready, and it is the right time to take stock – to emphasize your visibility and relevance to your customers and turn potential markets into conversations.

– Naresh Khanna

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