Fluff Pulp

Global Fluff Pulp Market Outlook

• The top three producers of fluff pulp control approx. 80 percent of global production

• Asia and the Middle Eastern markets are expected to drive demand for fluff pulp in the coming years

• NA is a well-matured region, showcasing lower growth rates, characterized by no increase in demand and end-uses demand already ripe

Fluff Pulp Regional Market Overview

The availability of fluff pulp has started to increase globally during the past 1–2 months, and is expected to remain high along with dip in demand levels in the coming months.

• Asia is the largest demand market for fluff pulp and is expected to remain the largest buyer. It is a net importer of fluff pulp. China is one of the leading countries with the highest demand for fluff pulp in the region. The demand for Asia-Pacific is anticipated to grow at a CAGR of about 3–4 percent until 2027 owing to the increasing consumption of personal hygiene products. The increasing working women population coupled with low penetration rate of diapers will drive the demand of fluff pulp until 2027

• Since the outbreak of the pandemic, the demand for hygiene products has increased. Also, the demand for sanitary napkins and diapers has increased, which led to more demand for fluff pulp in the global market

• The demand is expected to be low in most of the months of 2023, since it is expected that buyers will be reducing their order volumes to pressure the suppliers  

Fluff Pulp Global Demand by Application

• Fluff pulp is a niche category with limited end uses. These end uses have high growth prospects, which is making fluff pulp sought after by the US producers

• Expected increase in the usage of these end-use products, post the outbreak of pandemic, the greater demand for hygiene products will be triggering the demand growth of fluff pulp globally

Downstream Demand Outlook

• Adult incontinence is the largest end-user segment for fluff pulp and the demand from the segment is expected to grow further in the coming years, due to an increasing need and demand for hygiene products

• The annual growth rate of fluff pulp usage in feminine hygiene products is expected to grow continuously in the coming years. The demand from Asia is expected to rise more compared to other regions

• By 2022, these end uses are foreseen to consume only 89.5 percent of the world’s fluff pulp; a small drop in market share, but an indicator of long-term trends that have been in place for several years

Reasons for Grade Shift to Fluff Pulp Production –US

• Less technical knowledge and process understanding required, as the commodity is a “one size fits all” category

• As the manufacturers can swing to producing BHK or BSK or fluff pulp as per the market dynamics, enabling the manufacturers to diversify

• Due to steady growth of 4-5 percent from 2014 through 2019, driven by Asia and Middle East

• Due to premium pricing compared to other market pulp grades, resulting in higher returns (>15 percent ROI)

Steady Growth

• Growing demand globally with expected 2-3 percent CAGR from 2020 to 2025

• U.S. manufacturers capitalizing on the availability of raw material (slash and loblolly pine), with 83 percent of the production concentrated in the U.S.

• Growing disposable income and ease of use, urging emerging middle class population to switch to disposable products

• Innovation and increased penetration by disposable product manufacturers’ drives the consumption of their products, and thereby the consumption of fluff pulp

Uncomplicated Production

• Fluff pulp production does not require technical knowledge and process understanding, unlike cellulose specialty grades

• It is considered an uncomplicated pulp grade, which can be produced by market pulp manufacturers, with addition of some equipment like drying unit, reel, and winder rebuilds

• The “one size fits all” attribute, enables manufacturers to swing between market and fluff pulp, helping them to leverage on the supply-demand imbalance

• Fluff pulp requires an ISO brightness of 84-87, lesser than the paper grade’s ISO brightness of 89-90. This results in a significant reduction of chlorine dioxide required for the bleaching process and hence less chemical cost

Premium Pricing and Swing Capacity

• Fluff pulp is priced at premium to market pulp, enabling manufacturers to lock in extra profits (>15 percent ROI), than producing market pulp

• Among 5.5 MMT of U.S. fluff pulp capacity, ~2 MMT are swing capacities

• With a decline in paper consumption, due to advent of digital technologies, many manufacturers are converting their market pulp lines to swing production, to produce both fluff pulp or market pulp, depending on the market dynamics