U.S. Tariffs Threaten Newsprint Producers—The U.S. Department of Commerce has issued preliminary countervailing duties, averaging 28.7 per cent, on imports of Canadian newsprint. Rising newsprint prices suggest that producers have been able to pass on a portion of their cost increases to their customers. However, the production outlook for Canadian newsprint remains poor, as higher prices are likely to accelerate the transition in the U.S. from print to digital newspapers.
Strong Financial Performance—Robust price gains across several paper product categories, including pulp and newsprint, have provided a significant boost to industry revenues. Combined with a moderate increase in production, this has left the industry in its best financial position since 2000.
Limited Spare Capacity to Meet Rising Demand—New orders have trended upward since 2013 and now stand at their highest levels in over a decade. With the industry operating at close to full capacity, its ability to capitalize on a growing order book will depend on greater investment.