PULP AND PAPER

Lead author: Michel Valois / Contributing author: Eduard Akim

Introduction and UNECE region overview

The global pulp, paper and paperboard industry experienced general weakness in 2019 compared with 2018 (when pulp prices reached record levels and paperboard demand was strong). The production of graphic paper declined due to closures and reduced consumption, the result of increased electronic communication. In contrast, growth continued in the consumption of sanitary and household papers, certain paperboard products and specialty papers, and pulps, including fluff and dissolving.

Prices for printing and writing papers and newsprint fell in EECCA in 2019 due to weaker demand, but prices for paperboard and tissue were relatively stable. Prices for market pulp fell considerably in 2019 after a rapid rise in 2018.

The production of graphic papers declined throughout the UNECE region in 2019 – by 7.1% in Europe, 0.2% in EECCA and 11.2% in North America. Apparent consumption also fell in the three subregions – by 7.1% in Europe, 10.4% in EECCA and 10.7% in North America.

The apparent consumption of packaging material in 2019 fell in Europe (by 2.8%, the first decline since 2011) and North America (by 1.7%, the first drop since 2013); on the other hand, it increased by 2.4% in EECCA.

Europe

Total pulp production in Europe fell by 0.1% in 2019 (graph 5.1 and table 5.3) due to weaker graphic-paper demand. The apparent consumption of woodpulp fell by 6.0%, enabling a 10.2% rise in exports. Market-pulp production rose by 6.7%, to 15.1 million tonnes, and its apparent consumption fell by 8.4%, to 18.1 million tonnes.

Falling demand for printing and writing paper, and bigger margins on chemical and mechanical pulp, enabled integrated mills to fill machine time by running pulp for the market. As demand for market pulp waned through 2019, however, the additional volumes from integrated players added to overcapacity, and pricing weakness persisted to at least mid-2020.

Europe’s production of paper and paperboard was down by 3.2% in 2019, at 95.6 million tonnes (graph 5.2). Graphic-paper production fell by 7.1% and resulted in machine closures. The production of sanitary and household papers was flat (at -0.8%), and paperboard (packaging material) production dropped by 1.0%.

Europe’s apparent consumption declined in 2019 by 3.9% for paper and paperboard and 7.1% for graphic papers. The consumption of packaging material fell (by 2.8%) in the subregion for the first time since 2011.

Unit values were lower for virtually every traded woodpulp and paper type in Europe in 2019, the result of lower demand (graph 5.3). There was a 17.5% decline in the unit value of woodpulp exports, and the import unit value dropped by 12.8%. Graphic-paper unit values fell by 2.7% for exports and by 1.8% for imports.

Eastern Europe, Caucasus and Central Asia

Chemical woodpulp production fell by 2.6% in EECCA in 2019, the result of higher maintenance outages in the Russian industry (graph 5.4). There was a corresponding drop in apparent consumption of 4.5%, to 4.1 million tonnes.

Paper and paperboard production and consumption was flat in the subregion in 2019 (graph 5.5). The pulp industry grew in parts of the EECCA – such as Belarus – with new capacity, but paper and paperboard production fell by 0.6%, to 10.9 million tonnes. The Russian Federation was by far the biggest paper and paperboard producer in EECCA in 2019, at 9.1 million tonnes.

The production of pulp fell by 4.1% in the Russian Federation in 2019, to 8.2 million tonnes, but paper and paperboard production was up slightly (by 0.6%) (FAOSTAT, 2020).

Containerboard production fell by 11.7% in EECCA in 2019, and the production of flutings was 9.9% lower. Production increased by 6.4% for corrugated medium and by 11.5% for wallpaper. The production of paper bags fell by 30%.

Although the production of newsprint fell by 0.8% in EECCA in 2019, exports grew by 7%; the domestic consumption of this product dropped by 26.3%, to 369,000 tonnes. The production of packaging papers made with recycled grades increased by 11.7% in EECCA in 2019.

Unit values for imported woodpulp and paper declined slightly in EECCA in 2019 – by 1.3% and 3.8%, respectively (graph 5.6). Unit values dropped significantly, however, for exports of woodpulp and paper – by 28.5% and 10.4%, respectively; some of the decline was due to eroding rouble-to-US-dollar exchange rates in 2019, but weakening export markets were a bigger factor.

North America

North American production of woodpulp dropped by 1.6% in 2019 (graph 5.7). Chemical pulp production and apparent consumption fell by 1.9% (to 54.3 million tonnes) and 2.5% (to 45.8 million tonnes), respectively.

North America’s production of paper and paperboard dropped by 4.2% in 2019, to 77.6 million tonnes. The apparent consumption of paper and paperboard continued its downward trend, declining by 3.5% to 71.8 million tonnes (graph 5.8).

The production of graphic papers in North America fell by 11.2% in 2019 as capacity was permanently removed due to falling demand and competition from imports. The production of packaging materials decreased by 2.7%.

The production of newsprint fell by 13.9%, to 3.4 million tonnes. Low prices and poor profitability resulted in capacity rationalization. Production dropped by 17.6% for uncoated mechanical paper (to 2.3 million tonnes), by 8.7% for uncoated wood-free paper (to 6.7 million tonnes) and by 9.0% for coated papers (to 4.5 million tonnes). The production of sanitary and household papers rose by 0.7%, to 7.7 million tonnes.

North America’s apparent consumption of graphic paper dropped by 10.7% in 2019, to 16.8 million tonnes, with the digitalization of communication continuing to affect the sector negatively. The apparent consumption of newsprint declined by 15.7%, to 2.1 million tonnes. There were drops in apparent consumption of 17.6% for uncoated mechanical paper (to 2.3 million tonnes), 5.9% for uncoated wood-free paper (to 7.0 million tonnes) and 11.3% for coated papers (to 5.3 million tonnes).

Apparent consumption grew by 0.9% for sanitary and household papers (to 7.9 million tonnes) but dropped by 1.7% for packaging materials (to 45.7 million tonnes) – the first decline in this product category since 2013. Apparent consumption rose by 1.1% for cartonboard (to 6.3 million tonnes) but decreased by 2.2% for case materials (to 31.4 million tonnes) and by 1.5% for wrapping papers (to 2.3 million tonnes).

Traded woodpulp declared unit values were lower across all grades in North America in 2019, the result of lower apparent consumption (graph 5.9 and table 5.3). Woodpulp declared unit values declined by 13.2% for exports and by 3.1% for imports. Declared unit values for graphic paper edged up by 0.6% for exports and by 6.4% for imports. 

Extraregional influences on the UNECE

• CHINA

Paper production and consumption increased in China in 2019, despite a large drop in recovered-paper imports (China Paper Association, 2020). Overall, output reached 107.7 million tonnes, up by 3.2% compared with 2018. Consumption rose by 2.5%, to 107 million tonnes.

China’s production of newsprint and coated printing and writing paper declined in 2019 by 21.1% (to 1.5 million tonnes) and 3.6% (to 6.8 million tonnes), respectively. Consumption dropped similarly, by 17.7% for newsprint (to 1.95 million tonnes) and by 10.3% for coated printing and writing paper (to 5.4 million tonnes).

Chinese production of uncoated printing and writing paper increased by 1.7% in 2019 (to 17.8 million tonnes). Boxboard production and consumption also grew – by 5.6% (to 14.1 million tonnes) and 4.8% (to 12.8 million tonnes), respectively.

China’s containerboard sector posted growth in 2019 after years of rationalization. Mills in China produced 21.9 million tonnes of linerboard and 22.2 million tonnes of fluting in 2019, up by 2.1% and 5.5%, respectively, compared with 2018; consumption followed a similar trend.

China imported only 10.4 million tonnes of recovered paper in 2019, a drop of 39.2% (6.7 million tonnes) compared with 2018, due to import quotas and in anticipation of a total ban starting in 2021. China imported 920,000 tonnes of recycled pulp (replacing production from recovered paper) in 2019, three times as much as in 2018 (China Paper Association, 2020). China’s market-pulp imports reached a record high of 26.2 million tonnes in 2019. The country also imported 6.2 million tonnes of paper and paperboard in 2019 (table 5.1).

• BRASIL

Brazil produced 19.7 million tonnes of pulp (integrated and market) in 2019, down by 6.6% compared with 2018, and 10.5 million tonnes of paper and paperboard, up by 1.0%. The lower pulp production was due mainly to production curtailments as a result of unfavourable market conditions, including slower demand as consumers destocked. Brazil exported 15.3 million tonnes of pulp in 2019 (table 5.2) (Ibá, 2020).

Brazil’s pulp imports rose by 40.6% in 2019, due mainly to the need for softwood kraft pulps (used for fluff pulp to make personal-hygiene products), of which the country has a limited supply.

• CHILE

Chile’s exports of pulp, paper and paperboard fell by 1.6% in 2019, due mainly to slower demand. The country’s aggregate pulp exports fell by 1.4%, to 4.6 million tonnes, with bleached radiata-pine pulp down by 6.6% and unbleached radiata-pine pulp down by 5.7%. Bleached eucalyptus kraft pulp exports rose by 4.3%.

Chile’s newsprint exports fell by 14.1% in 2019 due to lower demand from publishers. Paperboard exports were down by 1.5% on weaker global demand.

UNECE subregional data summary and forecast

Table 5.3 summarizes data on woodpulp and paper production, consumption, trade and declared value of cross-border trade for the period 2015–2019. Additional information and the complete forest products database is available at www.unece.org/forests/fpamr2020-annex.

Initial data supplied by UNECE member States (all figures are year over year) indicate the production of paper and paperboard will decline in the UNECE region by 2.6% in 2020 and 2.0% in 2021. Subregionally, the forecast is for paper and paperboard production to decline in Europe by 4.8% in 2020 and remain steady (+0.1%) in 2021; increase in the EECCA by 1.0% in 2020 and by 1.6% in 2021; and North America to shrink by 1.1% in 2020 and 4.3% in 2021.

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