- The Washington Times - Monday, August 12, 2002

Newsprint suppliers began raising their prices this month, a move that could cost big publishers millions of dollars annually but is unlikely to lead to higher newspaper prices or advertising rates.
Montreal-based Abitibi-Consolidated Inc., the world's largest manufacturer of the paper used to print newspapers, raised the price of its newsprint by $50 per metric ton Aug. 1.
Other major supplies have announced plans to raise their newsprint prices $50 per metric ton as well.
Last year, the average price of newsprint plunged by $175 to its lowest level in eight years, said Abitibi-Consolidated spokesman Denis LeClerc. Newspapers are reporting higher advertising revenue after last year's recession, and newsprint suppliers see an opportunity to recover some of their losses, he said.
"We think the time is right for this," Mr. LeClerc said.
Prices last increased to $625 per metric ton from $610 in April 2001, before plummeting to $450 last month, said Kathryn MacKenzie, news editor of Pulp and Paper Week, an industry newsletter.
After the $50 increase, the average price will be roughly $500 per metric ton, she said.
"It is not a very volatile market, but it is not very stable, either," Ms. MacKenzie said.
The price increase could cost major publishers millions of dollars annually. McLean-based Gannett Co. Inc., the nation's largest newspaper publisher, used 1.2 million metric tons of newsprint last year.
After the increase, Gannett could spend as much as $138 million on newsprint in one quarter, or $15 million more per quarter than it currently pays, published reports say.
However, major publishers often pay less than the average price for newsprint because they have more buying power, Ms. MacKenzie said.
Labor and benefits are much bigger expenses for major dailies than newsprint, said John Morton, an independent newspaper industry analyst. "You're not going to see everyone jacking up circulation rates or ad rates because of this," he said.
The Washington Times purchases newsprint from several sources and does not plan to raise its circulation rates or advertising rates because of the price increase, said Richard Amberg Jr., general manager.
Last month, the home delivery price of the Monday through Saturday editions of The Washington Post increased from 25 cents to 28 cents per day.
The price rise was not related directly to an increase in the cost of newsprint, said Ted Lutz, vice president and business manager. "For us, it was simply an overall increase in costs," he said.
The move by the newsprint suppliers will test whether the newspaper industry has recovered fully from the recession, some analysts say. "If [the price increase] does stick, I think it's symptomatic of a general trend that the industry is getting stronger," said Frank S. Gristina, an analyst for SunTrust Robinson Humphrey.

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