Pulp

Global Pulp Market Overview

Market Overview (2022E)

Global capacity: 100.53 MMT

Global demand: 62.95 MMT

• The global pulp demand is expected to increase at a CAGR of 3–5 percent until 2027

• The largest overall end-use segment for market pulp globally is now tissue paper. It is expected that tissue will be strong, following global population growth, a relatively better economic outlook, and the continued move toward western consumption habits in the emerging markets. Other end-use sectors, which are expected to grow, include absorbent hygiene products

• Many suppliers, like Suzano, UPM, have announced capacity expansions to meet the long-term demand. The demand for wood pulp is expected to increase further, due to the growing preference for sustainable packaging

• The hardwood market is expected to be firmer than softwood during the forecast period. Due to significant capacity additions in the latter and a diminishing demand, hardwood is expected to gain a lot of traction in the coming years

Downstream Demand Analysis

• The global pulp demand increased during H1 2022 globally, due to lower supply and shipment delays. But the demand is expected to be low throughout 2023 from across end-user industries and regions

• The world’s demand for all tissue paper is expected to remain high, with growth in premium and ultra-premium grades, the ones that use 100 percent market pulp. Bathroom tissue is the biggest growth area, with China using so much more of it than before, along with its growing demand for other items, such as paper towels, wipes, facial tissue, and diapers

• Demand is also strong in some other emerging markets, like Indonesia, Vietnam, Turkey, and Mexico, and these products use virgin fiber and is more than compensating for the reduced demand for printing and writing-grade pulp

• The Asian demand is also strong for Old Corrugated Cardboard (OCC). The global pulp demand is also receiving a boost because paper recycling is about to peak, with developed economies in North America, Europe, and Japan, consuming less printed paper than in the past

Pulp Global Market Demand by End-Use Application

• The world’s demand for all tissue paper is expected to remain high throughout the year, with growth in premium and ultra-premium grades, the ones that use 100 percent market pulp. Also, many tissue mills have increased their production capacities, especially in Asia, which will thereby drive the demand for wood pulp in the coming years

• Bathroom tissue is the biggest growth area, with China using so much more of it than before, along with its growing demand for other items, such as paper towels, wipes, facial tissue, and diapers

• Demand is also strong in some other emerging markets, like Indonesia, Vietnam, Turkey, and Mexico, and these products use virgin fiber and are more than compensating for the reduced demand for printing and writing-grade pulp

Non-wood Fiber Market

The demand for non-wood fiber based paper and packaging is rising, due to sustainability concerns among market players. The demand is high particularly among food and beverage market players for making non-wood based cartonboard, cupstocks, and other similar products. The demand from other end-user industries, like FMCG, beauty and personal care, and pharmaceutical industries, is also expected to increase, due to the growing preference for more sustainable and biodegradable packaging.

• The demand for non-wood pulp is maximum for producing printing paper, kraft paper, cigarette paper, and cupstocks, as the fiber content in the non-wood pulp is lesser than wood pulp, thus, making it unsuitable for producing cartonboard

• Asia is one of the key sourcing regions for non-wood pulp with China as the major supplier for non-wood pulp, like bamboo pulp, cereal stalk pulp, and grass pulp

• The demand for non-wood fiber packaged products is higher among food and beverage users over other industry users

• Grass fiber is mainly used to produce paperboard, while bamboo pulp is majorly used for tissue and making biodegradable sanitary napkins

• Grass offers several ecological benefits over mechanical pulp like, it emits less CO2 (lower greenhouse effect), while producing grass boards and is completely biodegradable and compostable

Growth Drivers and Constraints: North America

Drivers

• Export Demand: Export demand had increased in early months of 2022 compared to 2021, as demand from China increased during the period, due to an increase in demand from certain end-users, but due to logistics challenges and increase in shipping costs backend the price hike in North America

• Energy Costs: North American producers have improved access to natural gas as a fuel compared to other regions. Apart from this, they have started using alternate forms of fuel, like biomass

• Industry Consolidation: Increased M&A activity and switching production line between different products are done by the North American producers to remain profitable and avoid mill closures

Constraints

• Increasing Demand for recycled fiber: Due to the growing concerns over sustainability, the demand for recycled fiber is on rise in North America. Most of the end-user industries, including tissue producers and paper and board users have increased the usage of recycled fiber. The trend is expected to increase further in the coming years

• Demand from Export Markets may Decrease: Chinese manufacturers/industry suppliers are investing in old/idled/shutdown or financially troubled mills in North America and Europe, and thereby, reducing their costs and securing fiber for their needs. This might hamper export demand in the future

Product Innovations in the Pulp Industry

Project/Technology

Renewable formability

• This new cellulose fibre-reinforced plastic composite has a high renewable material content. It is designed for injection molding, extrusion and thermoforming applications. Up to 50 percent of its raw material is renewable

• The granulates offer smooth and reliable processability. A specially selected mixture of virgin plastic completes the mouldability of granulates for a wide range of end products with precise details. In addition, it has unlimited dyeing possibilities and great paint ability

• The composite can be used to replace plastic in many applications, from furniture to consumer electronics

3D bowl and dish

• Forming 3D shapes purely from cellulose is now a reality. This all-cellulose pulp can be hot-pressed with water to create rigid and water-resistant 3D shapes, which are 100 percent renewable and biodegradable

• These applications show the enormous potential of cellulose composite materials as an alternative to fossil-based materials

Cost Structure Analysis: Pulp

• Most of the softwood pulp mills are located in North America and Europe due to close proximity to raw material (wooden timber). Thus, supply is dominated by these regions, however, the demand for global pulp market is dominated by Asia, predominantly China. Thus, the prices majorly depend on the China’s demand

• Timber: Timber constitutes the major portion of raw material and overall cost of pulp. The kind of timber used for production of pulp directly impacts the cost and properties of pulp. However, market fluctuations in timber prices has minimal impact on cost of production of pulp, as most of the pulp mills are backward integrated and have their own forestry

• Timber prices in past few months had declined (in Europe) as the demand for timber logs from major end-user industries reduced due to outbreak of pandemic in Europe. Furthermore, with downtime of sawmills, the availability of market timber became challenging in Europe

• Construction industry is the largest end user segment of timber and hence any demand pull from the segment will lead to increase in cost for the pulp industry

• Utility Cost: Pulp industry is one of the most energy and water intensive industries, thereby, contributing to significant share to cost of pulp production

• Asian countries have the highest fiber cost due to the reliance on raw materials import from Americas

• Labor (Manufacturing Sector): Labor rates in US and Europe are amongst the highest in the world and have a considerable impact on the product’s cost. However, developing region like that of APAC is characterized by cheap labor force and constitutes a very smaller portion in the entire cost of production

Why You Should Buy This Report

The pulp market report provides information about the global and regional industry trends including a regional market snapshot of Europe, North America, and Asia. It lists out the market drivers and constraints, pulp prices overview and trends, and offers Porter’s five forces analysis of the pulp market. Important facts and figures both regionally and globally of the paper & pulp, fluff pulp, kraft pulp, wood pulp, hardwood pulp, and softwood pulp aspects of the pulp markets have been discussed in detail. The report includes the historic as well as projected pulp market price facts and figures for the near future with the underlying reasons. So, learn all about pulp market outlook 2021. The report does a cost structure and pricing analysis and provides information about best practices and provides a profile of the key market players. Further, it presents the innovations and new research and developments that will potentially have a significant effect on the pulp industry.