outlook for world market pulp, with a focus on china 2012... · 2013. 5. 17. · outlook for world...
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Outlook for World Market Pulp,
With a Focus on China
Kurt Schaefer, VP Pulp & Recovered Paper
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Pulp Imports into China Have Been Surging BSK and BHK Imports (000 tonnes/month)
0
100
200
300
400
500
600
700
1/06 1/07 1/08 1/09 1/10 1/11 1/12
BSK Imports
0
100
200
300
400
500
600
700
1/06 1/07 1/08 1/09 1/10 1/11 1/12
BHK Imports
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Pulp Demand Has Been “Flat or Down” for
Regions Other Than China World-20 Daily Shipments (thousand tonnes per day)
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Top Paper Company Importers of BHK, 2011 Thousand tonnes per year
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Development of BHK Capacity in China Million Tonnes per Year
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Rizhao Hardwood Chip Import Prices US Dollars per BDMT
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China Hardwood Chip Price Indexes US Dollars per BDMT
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In China, Local Prices Tumbled,
Import Prices Followed (US$ and RMB/Tonne)
500
550
600
650
700
750
800
850
900
950
4,000
4,350
4,700
5,050
5,400
5,750
6,100
6,450
6,800
7,150
6/11 8/11 10/11 12/11 2/12 4/12 6/12 8/12
NBSK Local Price RMB
NBSK Local Price US$ (R)
NBSK Import Price US$ (R)
500
550
600
650
700
750
800
850
900
950
4,000
4,350
4,700
5,050
5,400
5,750
6,100
6,450
6,800
7,150
6/11 8/11 10/11 12/11 2/12 4/12 6/12 8/12
BEK Local Price RMB
BEK Local Price US$ (R)
BEK Import Price ex Discount US$ (R)
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Overall, Producer Pulp Inventories Are
Just Above Normal Seasonally-Adjusted Days of Supply, World-20 (PPPC, RISI)
15
20
25
30
35
40
45
50
55
60
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Average = 32.6 Days
Source: PPPC, RISI
August'12 = 33.6
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Woodfree P&W Demand in Europe Saw a
Strong First Half of 2012
16
18
20
22
24
26
28
30
1/03 1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11 1/12
Uncoated Fine Paper, Euro Graph Deliveries PER DAY 3MMA
Coated Fine Paper, Euro Graph Deliveries PER DAY 3MMA
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Mechanical P&W Demand in Europe Has
Been Remains Weak in 2012
0
5
10
15
20
25
30
1/03 1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11 1/12
Uncoated Mechanical Paper, Euro Graph Deliveries PER DAY 3MMA
Coated Mechanical Paper, Euro Graph Deliveries PER DAY 3MMA
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Recent Developments (Supply)
• Terrace Bay (350,000 BSK): Aditya Birla Signs
Agreement to Purchase and Convert to Dissolving Pulp in
2016. Plan to produce paper grade pulp in the meantime
(October 2012)
• IP Franklin (270,000 BSK - fluff): Started in late June
• Eldorado (1.5 million BHK): November
• Ilim Bratsk (net 500,000 BSK): Start up Delayed to Year
End or perhaps Later
• Russian Wood Export Tariff Has Been Lowered on Wood
to Europe as Russia Enters the WTO
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World Outlook
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2012 Is Another Weak Year for Global Paper and Paperboard Production % Change, World Demand for Paper and Paperboard
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
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World Production of Tissue Papers Million Tonnes
2010 2011 2012 2013 2014
North America 7.9 8.1 8.2 8.3 8.5
% chg 1.4 1.6 1.4 1.5 2.0
Europe 8.0 8.2 8.5 8.8 9.1
% chg 4.0 3.1 3.8 3.1 3.2
China 5.2 5.8 6.4 6.9 7.4
% chg 9.5 10.9 9.4 8.7 7.1
Total World 29.1 30.4 31.7 33.1 34.4
% chg 4.2 4.3 4.5 4.3 4.2
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Per Capita Tissue Consumption Kg/Person, per Capita Real GDP, US Dollars
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World Production of P&W Papers Million Tonnes
2010 2011 2012 2013 2014
North America 22.7 21.5 20.6 20.3 20.0
% chg 2.1 -5.3 -3.9 -1.6 -1.4
Europe 35.9 34.9 33.7 33.2 33.5
% chg 8.1 -2.9 -3.3 -1.5 1.0
China 22.6 24.6 26.1 27.7 29.2
% chg 7.5 8.8 6.4 6.1 5.5
Total World 110.3 109.6 109.8 111.9 114.7
% chg 5.8 -0.7 0.2 1.9 2.5
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Additional Market Capacity from Integrated
Producers
• US South Integrated Producers Shift to Market Pulp
– Domtar (Plymouth, 220k BSK/Fluff) --Late 2010
– Domtar (Ashdown, 100 BSK/BHK) -- July 2011
– MeadWestvaco (Evadale, 180k BSK roll pulp) -- August 2011
– International Paper (Franklin, 270k BSK/Fluff) -- June 2012
– We Are Also Seeing More Market Pulp Shipment from the Nordic
Countries, Where Paper Production is Falling
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Large Projects on the Horizon
• Major projects through 2014 add 5 million tonnes
– BHK --- 4.3 million tonnes (not including Oji – China)
– BSK --- 740,000 tonnes
• South America Projects Past 2013
– Guaiba
– Klabin
– Fibria 3L
– Veracel II
• Asia Projects for 2015-16 ?
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But Conversions to Dissolving Pulp Will Take
Papergrade Capacity Out of the Market Announced conversion, thousand tonnes, including swing (*)
Mill Country Papergrade
Capacity
Change
DP
Capacity
Year
Cambara Brazil -35 (Fluff) 25 2011
Lenzing* Czech Rep. -180 (SIT) 140 2011
Vida Sweden -30 (SIT) 30 2011
Tembec France -40 (Fluff) 25 2011
Sun Paper* China -250 (BHK) 200 2011
Fujian Qingshan* China -150 (BKP/UKP) 120 2011
Fortress Specialty Canada -260 (BHK) 200 2011
Hunan Juntai* China -350 (BSK/BHK) 300 2011
Jilin Shixian China -60 (SIT) 40 2011
Jilin Chenming China -60 (BSK) 40 2011
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Continued…. Announced conversion, thousand tonnes including swing (*), previously idled (**)
Mill Country Papergrade
Capacity
Change
DP
Capacity
Year
Sodra Sweden -170 (BHK) 150 2012
Lee & Man* China -165 (BHK/BSK) 140 2012
Stora Enso Finland -200 (BSK) 100 2012
Schweighofer Austria -160 (SIT) 130 2012
Paper Excellence** Canada -380 (BSK/BHK) 250 2013
Rayonier USA -270 (Fluff) 190 2013
Sappi S. Africa -250 (BKP/UKP) 210 2013
Sappi USA -420 (BHK) 330 2013
Fortress Specialty Canada -300 (BSK) 235 2013
Total 3.7 million 2.9 million
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2012-14 Forecast Key Points
• Weak economic growth means that China inventory
swings are dominating other factors, especially for BSK,
in 2012
• BSK demand will be stronger in the second half of 2012,
BHK demand will be weaker.
• RISI is expecting a solid increase in Chinese BHK
demand in 2013/14 and a strong economic environment
in 2014 worldwide
• The market could very well absorb the next three pulp
mills (Eldorado, Montes Del Plata, Maranhao) more
smoothly than many are expecting.
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World Pulp Monthly
www.risi.com/wpm
Just published:
The China Pulp Market:
A Comprehensive Analysis
and Outlook
www.risi.com/chinapulp
Thank-you for your attention!
For more information: