Market review
REVIEW OF MARKET DATA 2011 Another solid year for papermakers, 2011 was the first year since 1997 with no mill closures in the United Kingdom. However, evidence of a further dip in demand suggests the remaining 49 mills face a tough operating environment for 2012.
Apparent Consumption of Paper and Board
2011 saw apparent consumption fall to a new low of 10.2 million tonnes, a decline of 4.2% compared to the revised total for 2010 of 10.7 million tonnes. The only positive outcomes were in the relatively booming Tissue Sector, where demand for parent reels grew by 3.1%, and the Coated Mechanical Sector with growth of 3.6% - the latter benefiting from a switch in demand away from higher finish printing grades. The Printings and Writings Sector again saw significant falls in volumes, to 3.7 million tonnes in total and there is some feeling that volumes are unlikely ever to recover with the growing popularity of e-readers and other electronic media. Both Coated Woodfree and Uncoated Woodfree markets fell by more than 7.0% with CW Sheets and UW Cut Sizes both falling by more than 8.0%. Packaging demand also struggled with Corrugated Case Materials declining by around 1.0% and Cartonboard by 8.0%. In the latter case, Recycled Cartonboard consumption fell by more than 11.0% having been affected by the issue of mineral oils. Overall, apparent consumption of paper and board products fell back to levels last seen in the early 1990s having peaked at the millennium with close to 13 million tonnes.
Production and Deliveries of Paper and Board
With no closures, UK papermakers posted a modest growth in output of 1.0% to 4.34 million tonnes. Leading the way once more were the Coated Mechanical and Tissue Sectors with production of parent reels of tissue rising by almost 5.0% to 765,000 tonnes. The announcement by Disley Tissue of a second machine will likely lead to further growth in production although this must be set against consolidation elsewhere in the sector. The growth in output of the Newsprint Sector (+2.7%) is probably attributable to the greater capacity of the new Palm Paper machine compared to the closed Bridgewater Plant (closed February 2010) rather than increased demand which was poor as noted above. Production of Corrugated Case Materials declined by about 40,000 tonnes; like the Tissue Sector this sector is likely to return to growth during 2012 with new capacity having come into production at SAICA’s Manchester mill and the announcement by Smurfit Kappa of the refurbishment of their Townsend Hook mill in Kent.
In Europe, UK growth in production was almost the exception with only Italy and Poland of the larger producers showing similar growth of around 1.0%. Otherwise, of the five largest European producers, Germany, France, Sweden and Finland all saw declines with the latter declining by 4.0%. Overall production in the 19 CEPI countries fell by 1.9% to 94.9 million tonnes. This is comparable to similar declines in other developed economies, USA, Canada and Japan. However, this
is put into perspective by the continuing advance of papermaking in China which grew by an estimated 13.2% during 2011.
For deliveries, 2011 was a very mixed year with domestic sales falling in line with the drop in domestic demand, but exporters capitalising on reviving demand elsewhere despite the economic turbulence in Europe. Happily, from a UK papermaker’s perspective, imports of paper and board fell further and harder than domestic sales, shedding a further 367,000 tonnes of demand and at a 5.1% reduction, twice the level endured by home sales. The latter fell by 2.5% to 3.32 million tonnes (about 33% of total UK demand). Newsprint sales fell by almost 25,000 tonnes in domestic markets and by similar volumes in export markets. Stocks of newsprint have therefore grown significantly (+80% by the end of December 2011 compared to December 2010). The UK’s now almost negligible Printings and Writings Sector endured large falls in sales in UK markets, but the few remaining UK mills with significant capacity saw relatively excellent growth in export markets (+9.1%). Packaging demand having fallen as noted above, both domestic sellers and importers experienced declines in demand of between 3% and 5%. However, the largest factor affecting the drop in overall demand was the closure of the UK’s only remaining converter of liquid food Cartonboard in March 2011. There being no domestic producer of this material, imports fell by almost 100,000 tonnes.
24
Paper - the sustainable, renewable choice
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32