Outlook for Global Recovered Paper Markets

Transcription

1 Outlook for Global Recovered Paper Markets Latin American Conference August 2016 Kurt Schaefer VP, Fiber Hannah Zhao Senior Economist, Recovered Paper Copyright 2016 RISI, Inc. Proprietary Information

2 Global OCC Market OCC Import/Export Prices US Dollars per Tonne OCC US West Export (FAS) OCC N. German Export (FAS) OCC China Import (CIF) OCC N. German Export in Euros Copyright 2016 RISI, Inc. Proprietary Information 2

3 Global OCC Market Domestic OCC Prices 240 US Avg. (US$/Tonne) (L) German Avg. (Euro/Tonne) (L) 2, China Domestic OCC (RMB/Tonne) (R) Brazil Avg. (Real/tonne) (R) 2, , , Copyright 2016 RISI, Inc. Proprietary Information 3

4 Global ONP and Mixed Paper Markets US ONP#8 US Mix #2 China ONP IM (CIF) China Mix IM (CIF) Brazil ONP (Real/Tonne) R US Dollars per Tonne Copyright 2016 RISI, Inc. Proprietary Information 4

5 Falling Newsprint Consumption Can ONP supply meet the demand from the recycled cartonboard and molded pulp sectors? North America Western Europe Asia Other Million Tonnes Copyright 2016 RISI, Inc. Proprietary Information 5

6 High Grades RCP Market Sorted Office Paper Prices SOP US China IM (CIF) SOP Brazil (Real/Tonne) R 1,200 1,100 1,000 US Dollars per Tonne Copyright 2016 RISI, Inc. Proprietary Information 6

7 Major RCP Trade Flows MT MT MT MT Copyright 2016 RISI, Inc. Proprietary Information 7

8 US RCP Market Domestic Demand vs. Net Exports % Million Tonnes Domestic Demand Net Exports Recovery Rate (R) 60% 50% 40% 30% Net export share 2000: 22% 2004: 27% 2008: 36% 2012: 41% 2014: 39% % 2015: 40% % Copyright 2016 RISI, Inc. Proprietary Information 8

9 Western European RCP Market Domestic Demand vs. Net Exports Domestic Demand Net Exports Recovery Rate (R) 80% 70% Net export share Million Tonnes % 50% 40% 30% 2000: 6% 2004: 11% 2008: 16% 2012: 16% 2014: 14% 2015: 15% % Copyright 2016 RISI, Inc. Proprietary Information 9

10 Chinese RCP Market Domestic Collection vs. Imports Domestic Collection Net Imports Import share Million Tonnes Apparent Paper Recovery Rate Import Share : 10% 2000: 20% 2005: 49% 2009: 44% 2013: 39% 2014: 36% 2015: 37% China is still far from being self sufficient in terms of RCP despite continuously falling imports Copyright 2016 RISI, Inc. Proprietary Information 10

11 Other Asian RCP Markets Domestic Collection vs. Imports Million Tonnes Domestic Recovery Net Imports Recovery Rate 60% 55% 50% 45% 40% Net import share 2000: 29% 2010: 18% 2014: 19% 2015: 19% Net imports rose continuously in The import share grew again after declining last decade, driven by growing demand from India, Vietnam and other developing countries in this region. Copyright 2016 RISI, Inc. Proprietary Information 11

12 Major Players in Latin America RCP Net Imports, Thousand Tonnes Mexico El Salvador Colombia Chile Venezuela Argentina Cost Rica Honduras Brazil Guatemala Copyright 2016 RISI, Inc. Proprietary Information 12

13 World RCP Markets in Asian demand China Slower paper and board (PAB) output growth and RCP demand growth Lower recycled fiber share in certain PAB sectors: cartonboard and tissue Continued expansion in recycled containerboard capacity Regulation New VAT rebate policy may promote more RCP usage Copyright 2016 RISI, Inc. Proprietary Information 13

14 World RCP Markets in Asian demand Other Asia Faster PAB output and RCP demand growth than China, especially in the emerging economies India, Thailand, Indonesia, Vietnam Paper packaging sector will post major RCP consumption gain More than 3 million tonnes of new recycled containerboard and cartonboard capacity in Copyright 2016 RISI, Inc. Proprietary Information 14

15 World RCP Markets in Latin America: slow growth in RCP demand Most of the RCP demand growth will come from the packaging sector, especially containerboard About 300,000 tonnes of recycled CNT capacity gain in Brazil and Mexico in Western Europe and North America Western Europe: steady demand thanks to expanding recycled containerboard capacity North America: increased demand in Recycled capacity gain in 2015 and 2017 Copyright 2016 RISI, Inc. Proprietary Information 15

16 Latin American Paper and Board Output and RCP Usage Rate CNT Tissue News Other P&W RCP Usage Rate Million Tonnes Copyright 2016 RISI, Inc. Proprietary Information 16

17 Latin American Paper and Board Production % 23% 49% Brazil Mexico Other LA 28% 24% 48% 2014: 21.2 Million Tonnes 2018: 22.7 Million Tonnes Copyright 2016 RISI, Inc. Proprietary Information 17

18 Latin American RCP Consumption and RCP Usage Rate Brazil Mexico Other LA RCP Usage Rate Million Tonnes Copyright 2016 RISI, Inc. Proprietary Information 18

19 Latin American RCP Consumption % 33% Brazil 30% 32% Mexico Other LA 37% 38% 2014: 13.4 Million Tonnes 2018: 14.6 Million Tonnes Copyright 2016 RISI, Inc. Proprietary Information 19

20 International Trade China will continue to import a lot of RCP Slowing but still growing RCP demand Domestic collection growth More packaging materials circulated domestically, improving quality, better control and stable supply Currently not low recovery rate means limited growth potential Beijing may put more control on RCP imports, both quality and quantity Copyright 2016 RISI, Inc. Proprietary Information 20

21 International Trade New big importers: Other Asia India, Thailand, Vietnam, Indonesia Fast growing demand and relatively low paper recovery rates Suppliers North America and Western Europe may be able to export more RCP, while Japan and Oceania will see little export increase New potential suppliers Latin America and Middle East? Copyright 2016 RISI, Inc. Proprietary Information 21

22 World Containerboard Production Virgin OCC Consumption Recycled UKP Consumption OCC Recovery Rate 0.86 Million Tonnes Copyright 2016 RISI, Inc. Proprietary Information 22

23 World Containerboard Markets Will the share of recycled grades continue to rise? RCP usage rate: 90% worldwide in 2014 Planned new recycled lines and converted capacity from graphic paper sector (Europe, North America and China) Current low OCC prices should be temporary RCP Usage Rate in Containerboard Region W. Europe 95% 96% E. Europe 75% 85% China 107% 112% Japan 95% 96% Other Asia 107% 109% Latin America 86% 88% N. America 45% 48% Oceania 75% 63% World 86% 90% Copyright 2016 RISI, Inc. Proprietary Information 23

24 Estimated OCC and Wood Fiber Cost in US South Wood Fiber Cost OCC Fiber Cost US Dollars per Tonne Headbox softwood fiber and OCC costs, excludes costs other than fiber costs (chemicals, energy, labor, maintenance, overheads, etc.) Copyright 2016 RISI, Inc. Proprietary Information 24

25 World OCC Markets Where will the new demand growth come from? Europe, Asia, North America OCC availability in different regions Limited growth in the developed regions Improving Chinese domestic collection Latin America: currently still less efficient recycling system Current demand/supply imbalance will continue Copyright 2016 RISI, Inc. Proprietary Information 25

26 World OCC Markets How high will the OCC recovery rate have to go to meet the projected OCC demand growth? Other issues OCC quality issues: increasing mixed paper usage in world containerboard production will result in a lower yield rate Risks associated with world economy Copyright 2016 RISI, Inc. Proprietary Information 26

27 Thank you! For more information: OCC/UKP Market Analysis and Outlook ukp Outlook for Global Recovered Paper Markets The China Recovered Paper Market: A Comprehensive Analysis and Outlook World Pulp and Recovered Paper 5 Year & 15 Year Forecasts World Recovered Paper Monitor Copyright 2016 RISI, Inc. Proprietary Information 27