Global Containerboard Outlook

Transcription

1 Global Containerboard Outlook With a focus on the European market RISI European Conference March 2017 Gleb Sinavskis Associate Economist, European Paper Packaging

2 Gleb Sinavskis Associate Economist, European Paper Packaging Previous experience in the financial services industry Masters in Economics from Uppsala University Co author of the European Packaging Paper 5 Year and 15 Year Forecasts 2

3 Agenda Asia North America Latin America Africa, the Middle East, Oceania Europe Conclusions 3

4 Global Containerboard Demand Asia has the largest market, followed by North America and Western Europe 8% 7% 5% Far East North America 14% 47% Western Europe Latin America Emerging Europe 19% All Others 4

5 Share of Virgin Containerboard in Demand Varies by Region Share of Virgin in Regional Containerboard Demand 70% 60% 50% 40% 30% 20% 10% 0% Far East North America Western Europe Latin America Emerging Europe All Others 5

6 Global Capacity Will Grow Mostly in Recycled Containerboard Global Capacity, Thousand Tonnes 250, , , ,000 50,000 27% 22.6% Virgin Containerboard Recycled Containerboard 6

7 Global Virgin Containerboard Demand Is Dominated by North America 6% 6% 17% Far East North America 12% Western Europe Latin America Emerging Europe 12% All Others 47% 7

8 Asia 8

9 Capacity Growth in Asia Is Expected to Outpace Demand in % 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Demand Capacity Operating Rates

10 China Continues to Account for More Than 60% of Asian Demand Apparent Consumption, Thousand Tonnes 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 Other Countries Vietnam Japan Thailand Indonesia India Taiwan South Korea China 10,

11 OCC Prices in China Increased Dramatically in Late 2016 Euros per Tonne OCC (1.05) Imports from Europe (Net Price) OCC, Imports from Japan (Net) OCC, Imports from the USA (Net) OCC, Post consumer (Domestic, Net Price) 0 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Feb 11

12 Net Exports of Recycled Containerboard in Asia Are Expected to Grow in 2017 Net Exports, Thousand Tonnes 1, , , ,000.0 Virgin Containerboard Recycled Containerboard 12

13 North America 13

14 Operating Rates in North America Are Rising as Demand Is Outpacing Capacity Growth Change in Thousand Tonnes, Percent 1,400 1,200 1, Demand Capacity Operating Rates 98.0% 97.5% 97.0% 96.5% 96.0% 95.5% 95.0% 94.5% 94.0% 93.5% 93.0% 92.5% 14

15 North American Containerboard Capacity Growth Is Dominated by Recycled Grades Thousand Short Tons Company Location Country Capacity Date Grade SP Fiber Technologies Newberg Mill USA Q1 Recycled Linerboard SP Fiber Technologies Newberg Mill USA Q1 Recycled Medium International Paper Valliant Mill USA Q2 Recycled Medium WestRock Newberg Mill USA Q4 Recycled Linerboard Alsip MiniMill Alsip mill USA Q4 Recycled Medium WestRock Newberg Mill USA Q4 Recycled Medium WestRock Coshocton Mill USA Q4 Semichemical Medium Pratt Paper Valparaiso Mill USA Q4 Recycled Containerboard WestRock Uncasville Mill USA Q1 Recycled Medium Kruger Trois Rivieres Mill Canada Q2 Recycled Containerboard 15

16 Recycled Containerboard Is Gaining More Market Share in North America Over Time Apparent Consumption, Thousand Tonnes 35,000 30,000 25,000 20,000 15,000 10,000 5, Kraftliner Semichemical Medium Testliner Recycled Medium 16

17 Accident at International Paper s Pensacola Mill in Cantonment, Florida An explosion on the evening of January 22 caused significant structural damage to the pulp digester and the power house Paper capacity is 486,000 metric tonnes per year of lightweight fully virgin kraft linerboard RISI currently estimates a reduction in capacity of 270, ,000 tonnes due to the accident This is expected to affect North American exports to Europe and global kraftliner supply/demand balances 17

18 Net Exports of Virgin Containerboard from North America Are Expected to Drop in 2017 Change in Net Exports, Million Tonnes Virgin Containerboard Recycled Containerboard 18

19 Latin America 19

20 Demand Growth in Latin America Accelerates as Brazilian Economy Recovers Change in Thousand Tonnes, Percent % Demand Capacity Operating Rates 89.0% 88.0% 87.0% 86.0% 85.0% 84.0% 83.0% 82.0% 20

21 Brazil and Mexico Account for More Than 70% of Latin American Demand Mexico will outpace Brazil in ,000 Brazil Argentina Chile Mexico Rest of Latin America 12,000 10,000 8,000 6,000 4,000 2,

22 Net Imports in Latin America Are Set to Grow in the Future Change in Net Imports, Thousand Tonnes Virgin Containerboard Recycled Containerboard 22

23 Africa, the Middle East and Oceania 23

24 African Demand Has the Best Outlook Apparent Consumption, Thousand Tonnes 4,000 3,500 3,000 2,500 2,000 1,500 1, Middle East Africa Oceania 24

25 Net Imports to Grow for Both the Middle East and Africa, Oceania to Export More Net imports, Thousand Tonnes 1, Middle East Africa Oceania 25

26 Europe 26

27 Containerboard Expansion Projects for in Europe Thousand Tonnes Company Location Country Capacity Year Quarter Metsä Board Husum Mill Sweden Aviretta Ettringen Mill Germany Modern Karton Çorlu Mill Turkey Stora Enso Varkaus Mill Finland Parenco Renkum Mill Netherlands EcoPaper Zarnesti Mill Romania Rafael Hinojosa Sarria de Ter Mill Spain Papierfabrik Schoellershammer Düren Mill Germany Pro-Gest Mantova Mill Italy Leipa Schwedt Mill Germany International Paper Madrid Mill Spain H2 Heinzel Group Laakirchen Mill Austria H2 Hamburger Spremberg Mill (?) Germany or Turkey or 2018 Burgo Avezzano Mill Italy (?) 27

28 Capacity Expansions Will Be Concentrated in the Central Part of Europe 28

29 Total Containerboard, Western Europe Demand Growth Is Slowing Down in 2016 and % % 93.0% MILLION TONNES % 2.5% 1.7% 1.8% 92.0% 91.0% 90.0% 89.0% % Capacity Demand (APC) Production Operating Rate 87.0% 29

30 Western European Virgin Containerboard Operating Rates Increasing in 2017 as Imports Decline % % 4.6% 2.4% 1.1% 96% 94% MILLION TONNES % 90% 88% 86% Capacity Demand Production Operating Rate 84% 30

31 Western European Recycled Containerboard Operating Rates to Decline Toward 2018 due to Capacity Boom 96% 24 95% 22 94% 93% MILLION TONNES % 2.0% 1.5% 2.0% 92% 91% 90% 89% 14 88% 87% Capacity Demand Production Operating Rate 86% 31

32 Trade Trends in Western Europe Virgin Containerboard Imports to Decline in Net Exports of Containerboard 2.0 MILLION TONNES Virgin Containerboard Recycled Containerboard 32

33 Western European Kraftliner Operating Rates vs Variable Production Costs Production Costs Unbleached Linerboard (Kraftliner 175+ gsm) Operating Rates Kraftliner EUROS PER TONNE

34 Western European Recycled Liner Operating Rates vs Variable Production Costs EUROS PER TONNE Production Costs Testliner 2 Operating Rates Testliner

35 Containerboard Demand Growth in Emerging Europe to Accelerate Toward MILLION TONNES % 3.8% 3.9% 4.5% Capacity Demand (APC) Production 35

36 Dynamic Changes in Regional Net Imports in Emerging Europe Net Imports, Thousand Tonnes 1,000 Eastern Europe Central Europe Southeastern Europe

37 Conclusions 37

38 Global Demand Growth to Accelerate in 2018 after Slowdown in 2017 Apparent Consumption, Thousand Tonnes 180, % 160, , , ,000 80,000 60,000 40, % 3.0% 2.5% 2.0% 20, Kraftliner Sem. Medium Rec. Liner Rec. Medium Demand Growth, % 1.5% 38

39 Take Home Points on Global Containerboard Global demand growth will slow in 2017, but will improve in 2018 Emerging markets to accelerate toward 2018 Massive capacity expansions to happen in recycled containerboard across the globe Putting pressure on fiber costs Globally tighter supply/demand balances in virgin containerboard in the near term Higher operating rates in this segment 39

40 Thank you! 40