Low-cost Russian newsprint is biting a big piece out of North American producers’ traditional export markets in Asia and Latin America – especially India.

The Russian shipments, offered at prices reflecting the Ukraine sanctions and the ruble’s 50 per cent drop against the U.S.dollar, added to a rough 2015 start for the North American newsprint industry, analysts said Wednesday.

January domestic shipments were down 16 per cent year-to-year (and down 10.1 per cent from December, 2014) while actual demand dipped 15 per cent from a year earlier, accelerating from the 2014 level of 9 per cent, according to the industry’s January statistics..

The North American industry’s total offshore shipments dropped 18.4 per cent from a year earlier, with Asia (excluding Japan) down 29.3 per cent and Latin America down 10.5 per cent.

“Trade sources reported a huge influx of cheap Russian newsprint showing up in Asia following the ruble’s collapse due to the Ukraine sanctions,” said Paul Quinn, forest products analyst with RBC Dominion Securities Inc.

Prices have declined to unprofitable levels for most North American firms.

North American producers have shut down 1.14 million tonnes (net of restarts) of capacity, much of it in Quebec, in the 13 months to January 30, 2015, following 1.7 million net tonnes of shutdowns in 2010-2013. Selling prices have continued to weaken due to lower overall demand.

The sharp drop in the Canadian dollar –  pulp and paper sells in U.S. dollars globally –  is providing Canadian producers with a respite, but Quinn forecasts more newsprint machine changeovers to containerboard to reduce newsprint capacity.

Low-cost Russian exports of papermaking softwood pulp, especially from one massive new mill, are having a strong impact in Asia and in the Chinese market, he said. Hardwood pulp prices are being held down by future capacity increases in Russia, Europe, Scandinavia, Asia and Latin America.