global containerboard outlook - fastmarkets risi · 2020. 3. 5. · the gap between us domestic...

Global Containerboard OutlookGleb Sinavskis, Economist, European Paper Packaging

2020 | Fastmarkets | Global Containerboard Outlook

[email protected]

Gleb SinavskisEconomist, European Paper Packaging

Conducts economic analysis of paper packaging markets in Europe, including analysis on industry supply/demand balances, trade dynamics and cost/price developments, forecasting and econometric modeling. He is an author of regular reports such as Paper Packaging Monitor Europe and European Paper Packaging 5- and 15-year Forecasts.

Gleb is a frequent presenter at industry events and was involved in a number of ad-hoc client projects during his time at Fastmarkets RISI. Previously, Gleb worked in the financial services industry. Before that, he had an internship at the United Nations, where he has assisted in the desk research. He has MSc in Business and Economics from Uppsala University and BSc in Economics from Mälardalen University in Sweden.

2020 | Fastmarkets | Global Containerboard Outlook 2

Asia

North America

Europe

Conclusion


Global containerboard demand, 2019

Far East48%

North America18%

Western Europe14%

Emerging Europe7%

Latin America8%

Africa1.86%

Middle East1.50% Oceania

0.98%

Total demand: 170.5 million tonnes


Global containerboard fiber mix

9%

60%

19% 18%

37%

26%

15%

0%

10%

20%

30%

40%

50%

60%

70%

Far East North America WesternEurope

EmergingEurope

Latin America Africa Middle East

VIRGIN CONTAINERBOARD


Global virgin containerboard demand, 2019

Far East18%

North America47%

Western Europe12%

Emerging Europe5%

Latin America13%

Africa2.1%


1.9%

Total demand: 39.5 million tonnes


Global recycled containerboard demand, 2019

Far East57%

North America9%

Western Europe15%

Emerging Europe7%

Latin America7%

Africa1.8%


0.7%

Total demand: 131 million tonnes


Asia (Far East)

2020 | Fastmarkets | Global Containerboard Outlook

Chinese containerboard production declining

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

2015 2016 2017 2018 2019 2020 2021

China Other Asia


Net imports in China will grow, Other Asia to fill a big part of the gap

-400-200

0200400600800

1,0001,2001,4001,6001,800

2017 2018 2019 2020 2021

China (net imports change)

Virgin Recycled0

200

400

600

800

1,000

1,200

1,400

1,600

2017 2018 2019 2020 2021

Other Asia (net exports change)


Chinese RCCM imports increased at the end of 2019 (official stats)


Chinese apparent consumption dragging the whole region down

-3.5%

-2.5%

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%

4.5%

5.5%

-2,000-1,500-1,000

-5000

5001,0001,5002,0002,5003,000

2015 2016 2017 2018 2019 2020 2021

China Other Asia Total Asian APC growth, %


North America


North American capacity is growing faster than demand

-800-600-400-200

0200400600800

1,0001,2001,400

2015 2016 2017 2018 2019 2020 2021

Demand Capacity


US kraftliner exports declined in 2019 across the globe


Net exports from North America to stay flat in 2020?

-800

-600

-400

-200

0

200

400

600

2015 2016 2017 2018 2019 2020 2021


The gap between US domestic unbleached kraftliner and recycled liner (US dollars/tonne)

650670690710730750770790810830850

Sep

2017

Oct

201

7N

ov 2

017

Dec

201

7Ja

n 20

18Fe

b 20

18M

ar 2

018

Apr 2

018

May

201

8Ju

n 20

18Ju

l 201

8Au

g 20

18Se

p 20

18O

ct 2

018

Nov

201

8D

ec 2

018

Jan

2019

Feb

2019

Mar

201

9Ap

r 201

9M

ay 2

019

Jun

2019

Jul 2

019

Aug

2019

Sep

2019

Oct

201

9N

ov 2

019

Dec

201

9Ja

n 20

20Fe

b 20

20

Unbleached kraftliner 42 lb Recycled linerboard 30/31 lb


The gap between US domestic and export prices increased again (US dollars/tonne)

300

400

500

600

700

800

900

Apr 2

009

Jul 2

009

Oct

200

9Ja

n 20

10Ap

r 201

0Ju

l 201

0O

ct 2

010

Jan

2011

Apr 2

011

Jul 2

011

Oct

201

1Ja

n 20

12Ap

r 201

2Ju

l 201

2O

ct 2

012

Jan

2013

Apr 2

013

Jul 2

013

Oct

201

3Ja

n 20

14Ap

r 201

4Ju

l 201

4O

ct 2

014

Jan

2015

Apr 2

015

Jul 2

015

Oct

201

5Ja

n 20

16Ap

r 201

6Ju

l 201

6O

ct 2

016

Jan

2017

Apr 2

017

Jul 2

017

Oct

201

7Ja

n 20

18Ap

r 201

8Ju

l 201

8O

ct 2

018

Jan

2019

Apr 2

019

Jul 2

019

Oct

-19

Jan-

20

US East domestic price Exports to Southern Europe


The gap between US domestic and export prices increased again (US dollars/tonne)

-200

-100

0

100

200

300

400

Apr 2

009

Jul 2

009

Oct

200

9Ja

n 20

10Ap

r 201

0Ju

l 201

0O

ct 2

010

Jan

2011

Apr 2

011

Jul 2

011

Oct

201

1Ja

n 20

12Ap

r 201

2Ju

l 201

2O

ct 2

012

Jan

2013

Apr 2

013

Jul 2

013

Oct

201

3Ja

n 20

14Ap

r 201

4Ju

l 201

4O

ct 2

014

Jan

2015

Apr 2

015

Jul 2

015

Oct

201

5Ja

n 20

16Ap

r 201

6Ju

l 201

6O

ct 2

016

Jan

2017

Apr 2

017

Jul 2

017

Oct

201

7Ja

n 20

18Ap

r 201

8Ju

l 201

8O

ct 2

018

Jan

2019

Apr 2

019

Jul 2

019

Oct

-19

Jan-

20

Gap with Europe


North American kraftliner export prices vs cash cost curve (including delivery to Milan)


European kraftliner capacity is competitive, except for some high-cost facilities


Latin American mills are highly competitive on a global scale


Europe


Supply is outpacing demand in Western Europe

-200

0

200

400

600

800

1,000

1,200

2015 2016 2017 2018 2019 2020 2021

Demand Capacity


Western European RCCM net exports are rising

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2016 2017 2018 2019 2020 2021

Virgin Recycled


Western European RCCM exports outside Europe


European monthly RCCM exports to China


European brown RCCM capacity (in red) is cost competitive compared to Chinese capacity (in blue)


But Southeast Asia countries are also very cost competitive


Western European virgin containerboard imports from outside Europe are dropping


Kraftliner capacity will stay fairly stable until late 2020

-200-150-100

-500

50100150200250300

2015 2016 2017 2018 2019 2020 2021

Demand Capacity


Emerging Europe sees better demand growth, but supply is being added as well

0

100

200

300

400

500

600

700

800

900

2015 2016 2017 2018 2019 2020 2021Demand Capacity


Many projects in the pipeline in Western EuropeCompany Location Country Capacity Year Quarter Grade

Heinzel Laakirchen Mill Austria 450 2017 4 Recycled

Leipa Schwedt Mill Germany 450 2018 2 White top and brown recycled

Burgo Avezzano Mill Italy 200 2018 2 Recycled

International Paper Madrid Mill Spain 380 2018 3 Recycled

BillerudKorsnäs Gruvön Mill Sweden 550 2019 2 White liners, virgin cartonboard

Wizpaper Wizernes Mill France 180 2019 3 Recycled

Smurfit Kappa Facture France 45 2020 1 White top kraftliner

Papier- und Kartonfabrik Varel Varel Germany 60 2020 1 White top and kraft top testliner

Burgo Verzuolo Mill Italy 600 2020 1 Recycled

Pro-Gest Mantova Mill Italy 400 2020 H1 Recycled

Hamburger Spremberg Germany 500 2020 H2 Recycled

Progroup Sandersdorf-Brehna Germany 750 2020 H2 Recycled

Stora Enso Oulu Finland 450 2020 H2 Virgin


Emerging Europe has a lot of projects as well

Company Location Country Capacity Year Quarter Grade

Varaka Kagit (Albayrak Group) Balikesir Turkey 300 2019 1 Recycled

Arkhangelsk PPM Novodvinsk Russia 80-90 2019 2 Kraftliner

L-Pack Lipetsk Russia 180 2019 2 Recycled

Schumacher Myszkow Poland 250-300 2019 2 Recycled

OBF Sokol Russia 162 2019 3 Recycled

Ilim Group Bratsk Russia 110 2019 4 Kraftliner

Bukoza Hencovce Slovakia 70 2020 White top kraft top testliner

Kipas Kagit Söke Turkey 720 2020 2 Virgin and recycled cartonboardand white linerboard

Mondi Ruzomberok Slovakia 300 2020 4 White top kraft top testliner

Hamburger Kutahya Turkey 480 Recycled

Kipas Kagit Söke Turkey 480 Recycled

Ilim Group Ust Ilimsk Russia 600 2021 H2 Kraftliner


For high-cost recycled liner machines Italian prices are already very low...


... especially when including transportation costs


Variable production cost development in Western Europe

200220240260280300320340360380400

2015 2016 2017 2018 2019 2020 2021Testliner 2 Kraftliner 175+


Conclusions


Recycled containerboard will grow faster than virgin globally

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2015 2016 2017 2018 2019 2020 2021

Recycled Virgin


World containerboard capacity is outpacing demand

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

2015 2016 2017 2018 2019 2020 2021

Demand Capacity


Global containerboard summary

• Capacity will continue to outpace demand globally in 2020

• RCCM demand growth outpacing virgin containerboard

• Lower production costs will provide support for RCCM producer margins

4.4 million tonnes

Difference between global capacity and demand growth in 2020


Thank you!


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