Capacity exceeding demand in the Fluff Pulp Market, says Beroe Inc
Source: PR Newswire
RALEIGH, North Carolina, August 29, 2019 - The current global demand for fluff pulp is estimated to be 4,117 MMT, with the capacity far exceeding the demand, according to Beroe Inc, a procurement intelligence firm. Global fluff pulp operating rates have decreased over the past 3 years and are expected to decrease further due to capacity addictions. While the actual discounted prices of fluff pulp are expected to slowly drop, the list price is expected to stay high, making it more attractive than other fibers.
At a global level, the Asia Pacific region has the highest demand growth for fluff pulp, expected to grow at a CAGR of 6-7 percent till 2021, followed by EMEA (CAGR of 3-4 percent), LATAM (CAGR of 2-3 percent) and North America (CAGR of 1-2 percent). Increasing income levels in emerging markets, such as Brazil, Eastern Europe, India, and China, are creating a greater demand for fluff pulp end-use products.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on its recently launched market intelligence platform Beroe LiVE: live.beroeinc.com
Adult incontinence is a relatively new segment but accounts for the largest end-user demand for fluff pulp, expected to grow at 7–8 percent till 2021, while the annual demand growth rate of fluff pulp usage in feminine hygiene products is expected to be 3–4 percent in the same period. Diapers are expected to grow at a CAGR of 2–3 percent till 2021.
SAP (Super Absorbent Polymer) is the biggest threat to the fluff industry with its usage growing considerably in baby diapers because of it’s super high absorbency, it’s lightweight and because it causes fewer rashes than fluff. The advent of drylock technology would give scope to the diaper makers to make disposable items without the use of fluff. DryLock technology provides more comfort to the user and is good for the environment also, as it eliminates the use of wood pulp. These, however, come in a premium range of products, which may not be economical for the developing markets.
- The global fluff pulp market is highly consolidated, with the top four players constituting 85 percent of market share. Of the top 10 producers, six are in North America, one in South America and three in Western Europe.
- Fluff pulp is priced at a premium to a market pulp, enabling manufacturers to lock in extra profits (>15 percent ROI), than producing market pulp.
- Raw material (that includes SBSK wood chips and other chemicals, like chlorine dioxide and calcium oxide) is a major cost component that accounts for 40–45 percent of the total cost of fluff pulp.
- Fluff pulp production does not require technical knowledge and process understanding, unlike cellulose specialty grades and is considered an uncomplicated pulp grade, which can be produced by market pulp manufacturers, with the addition of some equipment.
- The contract period ranges from one to three years. The longer the period of the contract, the higher is the discount allowed.
- There are currently two huge up-and-coming trends that aim to revolutionize the everyday fluff pulp made diaper by throwing technology into the mix, namely diaper alert with a smartphone application, and smart diapers to track health.
The research methodology adopted for the report included:
- Experts with twenty years of domain experience
- Interaction with buyers
- Inputs from supply chain partners
Around 83 percent of the global fluff production is concentrated in Southeast U.S., due to the abundant availability of slash pine and loblolly pine species. The short growing seasons in Europe and Asia, lack of optimal climate condition in Asia, and infrastructure issues in LATAM works in favor of the U.S.
The report also includes:
- Value Chain and Manufacturing Process of Fluff Pulp
- Global Fluff Pulp Market Overview
- Regional Fluff Pulp Market Overview
- Major Players in the Market
- Capacity Expansions and Shutdowns
- US Fluff Pulp Analysis
- Global Fluff Pulp Demand Outlook
- Global Demand by End-use
- Fluff Pulp Market Growth Drivers
- Challenges for Fluff Pulp and Diaper Producers
- Innovations in Diaper Market
Porters Five Force Analysis:
- Porter’s Five Forces Model
- Key Global Fluff Pulp Players Profile
- Cost Break-up of Fluff Pulp
About Beroe Inc.:
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.
To learn more about Beroe Inc., please visit: http://www.beroeinc.com