Pulp Market Intelligence

Industry Outlook & Drivers

Global Pulp Industry Outlook

• Europe, North America, and Asia, have newer capacity coming up in 2018, owing to the positive demand from the market. Tissue demand is estimated to grow by 3.7 percent in 2018
• The hardwood market is expected to be firmer than softwood from 2016 to 2020. 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

Global Pulp Market Overview

• The global pulp demand is expected to increase at a CAGR of 1.5–2.5 percent until 2019
• 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

Down Stream Demand Analysis

• Global pulp demand increased by 2 percent in 2017, on the back of accelerating consumption of tissue and packaging paper, offsetting declining demand for printing and writing grades

• The world's demand for all tissue paper hit 37.1 million tons in 2017, 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). 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

Non-wood Pulp Production

• Non-wood pulp produced using sustainable and environment-friendly methods will also become a fiber source for pulp in North America and Europe
• Forestry regulations and faster growth of non-wood fibers, compared to wood trees, will drive the technology development in the non-wood fiber pulping process
• The non-wood portion of paper typically varies from 20 percent to 90 percent and can be up to 100 percent, depending on the grade of paper and required quality
• There are many possible combinations and they can be adjusted to meet the market requirements

Pulp Market Overview

Raw Material Availability 

There are abundant plantations, predominantly softwood fibers. There are enough mills with superior technology in the region to convert fiber into pulp

International Trade

North American players primarily export their softwood fiber to China and European region. The export of pulp to China is expected to decrease in the future due to high inventory levels and lower domestic prices

Major Suppliers

GP Cellulose, Paper Excellence, Weyerhaeuser, Domtar, West Fraser, Resolute Products, and Canfor Pulp are the major pulp suppliers in North America.

Industrial Structure

The North American pulp industry is highly competitive with a high degree of backward integration and less differentiation, in terms of products. Currently, it operates with excess capacity

Future Outlook

The domestic demand might not be as promising as the export market. The US market majorly depends on the economic and industrial conditions in China