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Global Paper and Board Outlook Alejandro Mata Economist, European Forest Products October 2013 1

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Global Paper and Board Outlook. Alejandro Mata Economist, European Forest Products October 2013 . Alejandro Mata, Economist, European Forest Products, RISI. Bachelor degree in Engineering, MBA degree earned in 2007 - PowerPoint PPT Presentation

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Page 1: Global  Paper and Board Outlook

Global Paper and Board Outlook

Alejandro Mata Economist, European Forest Products

October 2013

1

Page 2: Global  Paper and Board Outlook

Alejandro Mata, Economist, European Forest Products, RISI• Bachelor degree in Engineering, MBA

degree earned in 2007• Worked in Business and Market

Intelligence functions for one of Europe’s leading paper producers

• Has been analyzing and forecasting the industry since 2009

• Recently joined RISI team• Author of the Paper Trader Europe,

the European Graphic Paper 5-Year and 15-Year Forecasts

2

Page 4: Global  Paper and Board Outlook

World Paper & Board Demand…Is the Global Market in Decline?

96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 120

50

100

150

200

250

300

350

400

450

-15%

-10%

-5%

0%

5%

10%

15%

Volume (L)Percent Change (R)

Million Tonnes

4

Page 5: Global  Paper and Board Outlook

5

Global State of the Industry

Are there any regional differences? Industry segment differences?

Page 6: Global  Paper and Board Outlook

Forecast Change, 2012-2014: +5%

86 mt(21%)

32 mt(8%)

30 mt(8%)

109 mt(27%)

145 mt(36%)

-4% +9%

+1%+6%

+7%

Printing & Writing

Newsprint Tissue

Cartonboard/ Other

Containerboard

Paper & Board Markets – Global

• US economy accelerating

• Euro area out of recession

• Emerging economies growing slower than before

• Newsprint papers declining globally

• Printing & writing: growth in emerging markets, contraction in mature markets

• Tissue and packaging driving growth

The global picture keeps growing!

6

Page 7: Global  Paper and Board Outlook

7

Paper & Board Markets – Comparison

Cartonboard

Containerboard

Tissue

Newsprint

P&W

Paper & Board

-10.0% -5.0% 0.0% 5.0% 10.0% 15.0%

AsiaL.Am.N.A.Europe

Page 8: Global  Paper and Board Outlook

Paper & Board Markets – Europe

+3%

Forecast Change, 2012-2014: -0%

21 mt(21%)

8 mt (9%)

9 mt(9%)

29 mt(30%)

30 mt (31%)

-8% +7%

-5%+3%

Printing & Writing

Newsprint Tissue

Containerboard

Cartonboard/ Other

No growth for the P&B markets as a whole • Newsprint heavily impacted by new media

• Printing & writing grades showing mixed trends, UM doing better than coated grades

• Containerboard and cartonboard supported by economic recovery and inventory restocking

• Eastern Europe driving growing trends

8

Page 9: Global  Paper and Board Outlook

9

Paper & Board Markets – Europe

• Mature vs. growing segments

• Economy impacting segments differently

• New technologies impacting segments differently

• West vs. East

• Saturated vs. unsaturated markets

Page 10: Global  Paper and Board Outlook

10

Different Trends Emerging in the Region

Growing vs. Declining• Demand growth in East vs. contraction in

West

• This applies not only to graphic grades, but also

to packaging and tissue

• Capacity base shifting

• East will become more relevant in defining

trends going forward

* Percent change reflecting 2012 vs. 2011 apparent consumption levels for all paper and board grades.

-3.4%2.4%

Bethanie Ballard
I assumed 2.4 was a percent. There was no percent sign.
Page 11: Global  Paper and Board Outlook

11

While There Is Limited Growth in Western Europe…

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Newsprint Other Packaging Tissue P & W

Western European Apparent Consumption

Page 12: Global  Paper and Board Outlook

12

…Eastern Europe Keeps Showing Better Trends

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000Newsprint Other

Packaging Tissue

P & W

Eastern European Apparent Consumption

Page 13: Global  Paper and Board Outlook

13

Graphic Papers

Page 14: Global  Paper and Board Outlook

Total European Graphic Demand by GradeMillion Tonnes

14

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

10000

20000

30000

40000

50000

60000Uncoated WoodfreeUncoated MechanicalNewsprintCoated WoodfreeCoated Mechanical

Average Annual Growth 2013-2015

News -3.8%CWF -3.6%Cmec -3.7%UWF -1.6%Umec -0.4%

Page 15: Global  Paper and Board Outlook

15

07 08 09 10 11 12 13 14 1550%

60%

70%

80%

90%

100%

110%

120%

Pre-Crisis AverageLong-Term AverageCrisis Period AverageProfitability

Western European Profitability (All Grades)Price/Total Delivered Costs

Note: Total costs include mill operating costs, depreciation, interest, SG&A and delivery.

Page 16: Global  Paper and Board Outlook

07 08 09 10 11 12 13 14 1560%

65%

70%

75%

80%

85%

90%

95%

100%

Pre-Crisis AverageLT AverageCrisis Period AverageOR (with Assumptions)OR (w/o Assumptions)

16

Western European Operating Rates(All Grades)Percent

Page 17: Global  Paper and Board Outlook

Announced Net Newsprint Capacity Changes for 2013-2014 vs RISI Forecast of Demand Growth for the Same PeriodThousand Tonnes

Europe N. America Asia Latin America Global-1,400-1,200-1,000

-800-600-400-200

0200400600

Capacity GrowthDemand Growth

17

Page 18: Global  Paper and Board Outlook

Announced Net P&W Capacity Changes for 2013-2014 vs. RISI Forecast of Demand Growth for the Same PeriodThousand Tonnes

Europe N. America Asia Latin America Global-2000-1500-1000

-5000

50010001500200025003000

Capacity GrowthDemand Growth

18

Page 19: Global  Paper and Board Outlook

19

EU 27+2 China Latin America North America0

50

100

150

200

250

300

350

400

450Fiber Chemicals Fuels Electricity Labor Materials

Cash Manufacturing Costs* (Euro/Tonne) 2Q13 - Newsprint

*Capacity Weighted Average

Page 20: Global  Paper and Board Outlook

EU 27+2 China Latin America North America0

100

200

300

400

500

600 Fiber Chemicals Fuels Electricity Labor Materials

20

Cash Manufacturing Costs* (Euro/Tonne) 2Q13 – Printing & Writing

*Capacity Weighted Average

Page 22: Global  Paper and Board Outlook

World Graphic Paper 5-Year Forecast

Global Newsprint Risk of Closure Studywww.risi.com/gnr

China’s Influence on WorldGraphic Paper Markets in theComing Decadewww.risi.com/chinagraphic

Thank you for your attention!For more information: