Navigating The Intricacies Of The 2023 Paper World

This content is being republished with the consent of Fisher International and ResourceWise. Read more about Pulp and paper industry at ResourceWise. Nov 16, ‘23

Welcome to the rollercoaster that is the 2023 global economy – a tale woven with global events and policy acrobatics, leaving us all a bit dizzy about what’s next. Among the industries caught in this whirlwind, the pulp and paper sector has been doing its own acrobatics, juggling prices and demand like a circus performer.

As we gear up for the next act in the new year, let’s rewind and dissect how the different grades of pulp and paper danced through the year.

Containerboard:

Containerboard, the rockstar of the pulp and paper scene, maintained its headlining status, commanding about 39% of the annual production capacity. Since 2020, it’s been strutting its stuff with a Compound Annual Growth Rate (CAGR) of 3.67%. What fueled this swagger? Everything from sustainability buzz to the e-commerce explosion during lockdowns in 2020 and 2021.

But, wait, the party took a breather in 2022. How’s our headliner holding up in 2023?

According to AF&PA, US containerboard production took a little dip in Q1 2023, down 10% compared to Q1 2022. Q3 played it cool with just a 1% production decrease from a year ago but down 8% compared to the same period last year. Mill inventories even did the limbo, slipping below 400,000 short tons in 1Q2023 for the first time since September 2021.

Containerboard companies spilled the tea:

• Smurfit Kappa saw European containerboard prices doing the limbo in the first half of 2023, doing the price-drop dance due to lower prices for recovered fiber and energy, plus a dip in demand from corrugated box producers.
• International Paper shared tales of a soft-demand environment for corrugated boxes and containerboard in North America during Q2 2023. It’s like the demand had a snooze button, affecting earnings in North America.
• Oji Holdings had its own containerboard blues, reporting a sales volume decline in domestic markets in 1Q2023.

But hey, in North America, major producers took some downtime to ‘right-size’ their inventories. It’s like hitting pause on the containerboard expansion projects – but fear not, they’re back in the game now.

Printing And Writing Paper:

Printing and writing paper, the rebel with a 13% global capacity share, has been on a bit of a rollercoaster with a -1.68% CAGR since 2020. Despite a momentary capacity boost in 2022, it’s been on a downhill ride since 2013.

But hold on, the rebel has comrades in Asia! In countries like China and India, printing and writing paper is having a moment. ITC, BILT Graphic Paper Products, and Andhra Paper in India even cranked up their prices by INR 1,000-3,000 a ton – because why not? The demand is skyrocketing, thanks to the education sector and the e- commerce extravaganza.

India, in particular, is making waves – a 214% surge in imports of uncoated printing and writing paper in Q1, with Indonesia, Singapore, and China playing the role of paper merchants.

Tissue And Towel:

The tissue and towel sector, the underdog with a 9% global capacity share, is the unexpected hero of the pulp and paper story, with a stellar 4.25% CAGR since 2020.

China’s flexing with a 3 million ton capacity growth in 1H 2023, while Turkey and Mexico are doing their own flexing with increases of around 153 thousand tons and 149 thousand tons, respectively. These three are the cool kids on the block in 2023.

Cascades, The Navigator, Kimberly-Clark, and Clearwater Paper – the Avengers of the tissue world – are reporting blockbuster results. Tissue sales and volumes are soaring, making the tissue and towel sector the unexpected superstar.

Market Pulp:

Market pulp, the second-biggest player with a 16% global capacity slice, has been quietly doing its thing with a 1.87% CAGR since 2020. What’s interesting is that Latin America is stealing the spotlight in production instead of the usual Asia Pacific region.

In South America, BEK pulp is having its moment, with some companies going all in with 100% BEK pulp for various grades. Meanwhile, Western Canada and Scandinavian countries are sticking to their NBSK pulp.

Brazil’s on fire! Pulp exports reached 9.1 million tonnes in H1 2023, a 1.5% increase from the same period in 2022. China’s feeling the pulp love with a whopping 25.4% surge in exports, and North America’s not far behind with a 19.9% rise.

The Latin American pulp party is just getting started, with new projects popping up. Brace yourself for some pulp price rollercoaster – more players, more competition, and the potential for supply and demand antics.

And that, dear readers, is the pulp and paper saga of 2023 – a plot thick with ups, downs, and unexpected twists. Stick around with Coniferous, because the next chapter promises even more paper shenanigans. Don’t miss the paper trail!