Senior Management Symposium 10 April 2017

Transcription

1 Senior Management Symposium 10 April 2017 Pulp: 70% of your tissue costs, but what s happening in the pulp market? Pierre Bach Research Manager Hawkins Wright UK Pierre joined Hawkins Wright in 2014 and has been providing research and editorial support to the Pulp & Paper team. He is co-author of our monthly multi-client publication Pulpwatch, and also makes regular contributions to The Outlook for Market Pulp and Forest Energy Monitor reports. He travels widely, both in the course of market research and also a speaker at industry gatherings and association meetings. Currently, his main research interests include the tissue and printing and writing paper markets in the Middle East, North Africa and South Asia.

2 Pulp: 70% of your tissue costs, but what s happening in the pulp markets? Market pulp demand Global P&B production Furnish trends & pulp demand drivers Market pulp supply Production costs New projects, capacity growth Long-term balance Looming oversupply? Implications for tissue sector All data sourced from Hawkins Wright multi-client reports: Outlook service for market pulp Defining the China market for pulp, paper and board Outlook service for dissolving pulp Pulpwatch Tissue World - Milan (April 2017) Pierre Bach Research Manager pierre.bach@hawkinswright.com

3 Pulp: 70% of your tissue costs, but what s happening in the pulp markets? Market pulp demand Global P&B production Furnish trends & pulp demand drivers Market pulp supply Production costs New projects, capacity growth Long-term balance Looming oversupply? Implications for tissue sector Tissue World - Milan (April 2017) Pierre Bach Research Manager pierre.bach@hawkinswright.com

4 Global P&B production by region and by sector Million tonnes Million tonnes Newsprint Mechanical Woodfree Sanitary Carton Packaging Others North America Japan Middle East & Africa Other Far East CEPI East Europe Latin America China

5 Global tissue production 40 Million tonnes by region China Other Far East Latin America Middle East & Africa East Europe Japan CEPI e North America

6 Global fibre furnish trends Other 3% Paperboard 13% Newsp rint Fillers 4% Integrated pulp 27% 200 Market pulp Recycled fibre Integrated pulp 300 Million tonnes Corrugating materials 42% Market pulp 14% Nonwood pulp 2% million tonnes Tissue 9% Printing & writing 25% Recovered fibre 52% 50 0 NSPT 7% P&B Fibre 0

7 Bleached chemical pulp demand growth China vs ROW 3,000 China Rest of world Thousands of tonnes 2,000 1,000-1,000 China, 10 year average: 1.2Mt/yr ROW, 10 year average: -0.2Mt/yr -2,000-3,

8 Drivers of market pulp consumption growth China, 2016 v ,400 1,200 1, Total demand growth Tissue Displacement domestic pulp 000s t Viscose sector Export P&B Domestic P&B demand

9 Market pulp demand growth forecast , by grade Million tonnes BEKP NBSK Asian HW Southern pine Other SW Birch SMHW NMHW

10 Pulp: 70% of your tissue costs, but what s happening in the pulp markets? Market pulp demand Global P&B production Furnish trends & pulp demand drivers Market pulp supply Production costs New projects, capacity growth Long-term balance Looming oversupply? Implications for tissue sector Tissue World - Milan (April 2017) Pierre Bach Research Manager pierre.bach@hawkinswright.com

11 Market pulp capacity growth annual and cumulative Total capacity (million tonnes) Annual change in BCP capacity BSKP BHKP Illustration of supply growth based upon existing capacity announcements Annual change in capacity (million tonnes)

12 Pulp: 70% of your tissue costs, but what s happening in the pulp markets? Market pulp demand Global P&B production Furnish trends & pulp demand drivers Market pulp supply Production costs New projects, capacity growth Long-term balance Looming oversupply? Implications for tissue sector Tissue World - Milan (April 2017) Pierre Bach Research Manager pierre.bach@hawkinswright.com

13 Forecast: looming oversupply? 70, % 98% 65,000 96% thousand tonnes 60,000 55,000 94% 92% 90% 88% Ratio % 50,000 86% 45,000 40,000 Illustration of supply/demand balance based upon existing capacity announcements and demand forecast % 82% 80%

14 Fibre consumption in the global tissue market ,000 45, Forecast ,000 Non-wood 35, s t 30,000 25,000 20,000 Virgin fibre RCF 15,000 10,000 Global tissue production 5,000

15 End-use markets for pulp 2015 and Packaging, 2020 Packaging, 8% Uncoated Uncoated 8% WF, 17% WF, 15% Specialty, 15% Coated WF, 9% Coated WF, 12% Specialty, 15% Mechanical & NSPT, 3% Fluff, 10% Mechanical & NSPT, 2% Fluff, 10% Tissue, 35% Tissue, 41%

16 Pulp: 70% of your tissue costs, but what s happening in the pulp markets? Market pulp demand Global P&B production flat, except in tissue and packaging Market pulp growing vs. RCF and integrated pulps China & tissue! Market pulp supply Supply increasing in low-cost regions, especially in eucalyptus pulp Unprecedented 5-year period of capacity increase Long-term balance Looming oversupply 10Mt of supply growth vs. 5.5Mt of demand Downward pressure on market pulp prices likely to accelerate trend Tissue World - Milan (April 2017) Pierre Bach Research Manager pierre.bach@hawkinswright.com