Tissue Demand Bounced Back In 2022 Across Most Regions, But China’s Rebound Fell Short Of Predictions.

In the whirlwind of the past years, the global tissue market danced to the chaotic tune of the COVID-19 pandemic sweeping across continents in 2020-21. The first wave brought panic buying and stockpiling, leading to toilet paper triumphs, while the away-from- home (AfH) sector suffered a lockdown blow. The result? A staggering 5.8% surge in global tissue consumption in 2020, a record-breaker in three decades.

But what goes up must come down, and in 2021, the plot took a twist. Tissue consumption dipped in various regions, from North America to Western Europe, the Near and Middle East, Japan, and Oceania—though Latin America stood its ground. Yet, China’s stellar 11% growth saved the day, averting the looming zero-growth scenario, with a final 0.7% uptick in tissue consumption for 2021.

The AfH Impact

The slower growth tale spun from destocking household pantries and supply chains, leading to weaker retail sales. The AfH sector’s full recovery remained elusive. Still, the combined growth of these years landed at 3.2% annually, a norm in the world of tissue consumption. It turns out, the real tissue hit was within the AfH domain, while household usage held its ground, and stock fluctuations played a mysterious role.

China’s Unpredictable Role

Anticipating a return to the 3.3-3.4% yearly growth trend in 2022, we found ourselves in a roller coaster. Tissue consumption seemed to regain its footing in most places—except in the land of the Great Wall. China’s unexpected weakness jolted us, with early whispers suggesting growth below 2% in 2022. Quite the shocker, considering we’d expected a robust 6.5-7.0% surge, lower than 2021’s 11% but still striding the growth path.

Had China performed as anticipated, global tissue consumption would have soared by 3.8% in 2022, painting the year with success. Alas, our data, pending the Annual Report of the China National Household Paper Industry Association (CNHPIA), points to a modest 2.5% global growth. A testament to China’s influence on the grand growth narrative, the global tissue consumption scale tipped from 43.3 million tonnes in 2021 to 44.4 million tonnes in 2022.

2022 Tissue Tales: Region by Region Recap

North America: A Tissue Turnaround

Hold onto your tissues, because in 2022, North America saw a tissue twist worthy of a Hollywood plot. Our figures are locked and loaded, and guess what? The North American tissue scene staged a triumphant comeback. The AfH market shook off its pandemic blues in nearly every corner—except for those forgotten office spaces. With remote work refusing to bid adieu, office occupancy slumped like a deflated balloon. But hey, don’t get it twisted, the At-Home sector wasn’t left out of the tissue tango. Soaring prices gave growth a nudge, though consumers went for smaller packs and slimmer pantry loads. With the final curtain falling, North American tissue consumption showcased a star-worthy 1.5% growth in 2022, dusting off a crumpled 6.5% collapse from 2021. Yet, we couldn’t quite reach the 2020 record heights, leaving us pondering the elusive tissue throne.

Western Europe: The Comeback Crew

Across the pond, Western Europe staged a tissue revival fit for the history books. A whopping 7 million tonnes of tissue took the stage, outshining even the glitz of 2020. The growth sparkled at a dazzling 3.4% from 2021. The AfH sector strutted back into the spotlight, stealing the show with nearly full power. The consumer sector, on the other hand, decided to take a leisurely stroll. The UK? Well, it whipped out a surprise act, but guess what? Most of the applause was for a pre-pandemic encore.

Eastern Europe: Drama and Developments

The East had its share of tissue theater in 2022. A war-torn backdrop between Russia and Ukraine set the stage, but tissues still found their moment in the limelight. Despite a jaw-dropping 23% decline in Ukraine (less than our pessimistic predictions, mind you), tissue consumption defied the odds with a 1.2% growth. Russia was in no mood to miss the spotlight either, with both production and consumption dazzling the audience. Essity didn’t let exit plans dampen its performance, while Hayat Kimya rolled out a grand paper mill premiere right before Russia’s “special operation” in Ukraine. The rest of the region? Just another day in the tissue business.

Latin America: The Pandemic Rebound

Latin America, the pandemic’s dance partner, showed off some serious moves in 2022. Brazil led the way, jiving its way to a strong recovery, while Mexico decided to join in, albeit a tad slower. Other countries? They had their own unique rhythm, leading to a 2.6% groovy growth for the whole ensemble.

Near and Middle East: The Demand Diversion

In the bustling Near and Middle East, tissue demand was playing a game of its own, with a 4.2% growth score. Turkey was the life of the party, flaunting a 5.6% growth, and Saudi Arabia wasn’t far behind, boasting a 4.9% rhythm, thanks to a little oil-fueled boost.

Japan: The Surprise Solo

Over in Japan, tissues had a surprise solo in 2022. With a jaw- dropping 3.2% growth, Japan turned heads with its exceptional performance. A growth rate that defied its usual one-note tune of 1.0% or less.

China’s Tissue Tango with the Pandemic: A Surprising Performance

Hold onto your tissue boxes, folks, because China’s tissue scene decided to break out some unexpected dance moves in the midst of the pandemic. Just when we thought we had the routine down, the pandemic crashed the party with major lockdowns, travel hurdles, and an economic slowdown – all creating a greater-than-anticipated impact on China’s tissue production. Cue the dramatic reveal: Chinese tissue production sashayed forward by a mere 3.2% in 2022, as revealed by the one and only Dr. Cao Zhenlei, the director of CNHPIA. While China’s tissue exports got their groove on in 2022, domestic consumption was playing it cool, with a sluggish growth rate of 1.9%. But here’s the twist: those sneaky stock levels might have played their part, hinting that actual tissue usage might have been playing a game of hide-and-seek with the measurements.

Venturing into the Asian Far East, we witnessed a tissue growth performance that could give other regions a run for their money – a sprightly average growth rate of 4.5% in 2022. Even a little hiccup in the largest market, South Korea, couldn’t rain on the tissue parade. Countries like Indonesia, India, the Philippines, Taiwan, Thailand, and Vietnam brought their A-game, serving as the pillars of regional growth.

Oceania, led by the charismatic Australia, decided it was high time to make a comeback. With a triumphant return to the record consumption levels of 2020, Oceania strutted its stuff, flaunting a jaw-dropping growth spurt of over 11% in 2022. Talk about making a grand entrance back into the spotlight!

Skipping over to the African continent, where growth figures seem to be playing a bit of hide-and-seek themselves. With a wink and a nod, we’ve got some early hints pointing to a 4.2% growth in 2022. Although some foreign trade figures are still giving us the cold shoulder (except for a select few leading countries – South Africa, Algeria, and Egypt, you rock!), the African stage seemed to have some vibrant moves to showcase.

Now, let’s peer into the crystal ball for a glimpse of the tissue terrain in 2023. Hold onto your optimism hats, because the outlook isn’t exactly donning rose-tinted glasses. The Western world might be in for a slower tempo of economic activity, though the doomsday predictions of a full-blown recession might not steal the show in 2023. As for China, well, it’s set to reclaim its growth throne in the tissue demand department. And let’s not forget our emerging economic stars – many are preparing to step into the limelight with their own growth stories. Drumroll, please, for our brand-spanking- new projection: a 2.8% growth in global tissue demand for 2023, a tad below the long-term growth line. Remember, folks, predicting the future is like dancing blindfolded – you never know what move is coming next!

China’s Packaging Price Parade: Recycled Rumba and Fine Paper Flamenco

Step right up to witness the mesmerizing dance of China’s packaging prices! In a plot twist that left us all guessing, recycled packaging board prices decided to tango their way down once again, while the aristocrats of the paper world – ivory board and fine paper – took center stage with a daring price hike performance. It’s a saga of supply, demand, and the ultimate quest to stop the downward spiral in its tracks.

In a move that can only be described as a price-pocalypse prevention strategy, Chinese producers fired up their engines with price hikes, determined to fend off the looming price decline beast. Ah, the drama! Amidst the clinks and clanks of containerboard and cartonboard machinery, some mills chose to bow out temporarily, curbing their production efforts to add a dash of suspense to the narrative.

July, the heralded peak season for China’s packaging industry, should have been a fiesta of board demand, but alas, the music seemed to have lost its beat. Reports from the frontlines told tales of tepid packaging demand, with industrial activity hitting a sour note due to slumping exports and retail sales that would put a snail to shame. Even in this world of packaging pyrotechnics, there’s no escaping the cool breeze of a property market slump.

Recycled containerboard, once a star in the show, faced its own spotlight crisis. Prices dipped and danced, a RMB rollercoaster that left even the bravest mills contemplating downtime. And let’s not forget the real MVPs of the packaging party – the ivory board and fine paper crew. With prices plunging into the abyss, they rallied the troops and initiated a counterstrike, raising their flags (and prices) high.

But the tale doesn’t end there, dear audience. We find ourselves in a world where recycled fiber-based grayback coated duplex takes a spin, making markdowns that could leave even seasoned investors dizzy. As the saga unfolds, the plot thickens: virgin fiber-based kraftliner prices took a dive, and the stage lights dimmed on the once-dazzling import figures.

And who can forget the ivory board’s dramatic entrance? After a price plunge that had us all gasping, the knights in shining armor – APP China, Sun Paper, and Shandong Chenming Paper Holdings – rode in with trumpet fanfare and announced hikes to rescue the kingdom. Huzzah! The oversupply dragon was momentarily appeased, and the pricing slide was brought to a halt.

Amid the chaos, UFP producers aimed to play their part, wielding their price hike banners high. The march of fine paper went on, with prices finding their rhythm after a tumble earlier in the year. It seems the fine paper fiasco might just be finding its grand finale.

But wait, there’s more! Newsprint import prices took a spin in the spotlight, with Russia’s dominance facing a challenge from the bold newcomers, Canada and Europe. A new duet emerged, and the
market responded with price cuts and curious price tags that left traders buzzing.

Behold the packaging price spectacle that has kept us all on the edge of our seats! A ballet of prices, twists, and turns that has left us both baffled and intrigued. And fear not, for Coniferous is here to ensure you stay in the loop with the latest updates on this captivating performance of packaging economics. The show must go on, and so shall our commitment to keeping you informed!

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