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Global Pulp Markets

Rising income in China is failing to translate into more consumption of communication paper, while tissue and packaging grades experience more promising growth

Since 2012, the market has experienced a steep decline in growth of paper and board demand and production

Boston – China’s paper industry is quickly transitioning into a slow-growth phase that poses challenges to pulp and wood fiber suppliers to that country. Yet, how the industry is developing varies greatly across different grades of paper. Much of the growth in production is in packaging grades, which primarily use recovered fiber, not virgin wood pulp. Still, furnish shares in China are changing quickly for other grades of paper, which will support a rising trend in imports for bleached hardwood and softwood kraft pulps. These and other findings were recently published in The China Pulp Market in Transition: A Comprehensive Analysis and Outlook, new study by RISI – the leading information provider for the forest products industry.

Since 2012, the market has experienced a steep decline in growth of paper and board demand and production. Production growth has averaged at 3% per year – a striking difference to the 10.9% average growth per year during china’s “golden age” of the paper industry from 2002-2012. Graphic paper consumption is no longer keeping pace with rising income levels in China. However, for tissue and packaging grades, the link between economic growth and consumption is expected to remain strong. In order to project future demand, exporters of pulp into China may be more reliant on “on the ground” information regarding these changes.

“In China’s transitioning markets, exporters of pulp to China will have to count on solid gains of fiber shares as well as in paper and board volumes if they want to justify rapid expansion of market pulp capacity in other regions. During this transition, forecasts for future pulp demand will be heavily dependent on information about the state of furnish shares,” said Kurt Schaefer, the lead study author and Vice President of Fiber at RISI.

“For investors in pulp market projects around the world, the challenge will be projecting where future demand will come from. In the recent addition of the China Pulp study, we try to bring insight into these changes with expanded coverage of furnish share trends and nonwood pulp mill costs and closures.”

The China Pulp Market in Transition study is the most detailed analysis of the market available today. It provides an in-depth look at end-use markets and furnish share trends that will drive future demand. With analysis of the current competitive landscape, the study identifies how changes will shape the future of the industry.

Analysis included in the study:
• 10-year forecast of pulp demand, production, consumption and imports.
• Capacity and production numbers by mill.
• Detailed profiles of key buyers, sellers and traders.
• Analysis of policy trends and new policy initiatives.
• BHK and non-wood pulp production costs in China.
• Comparison of Chinese pulp production cost economics to other key regions.
• Independent estimates of pulp capacity in China, including non-wood pulp capacity.
• Assessment of pulp line closures since the 2012 edition.
• Overview of non-wood pulp in China, including future market potential.

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