outlook for global recovered paper marketsoutlook for ......title microsoft powerpoint - hannah zhao...

Outlook for Global Recovered Paper MarketsOutlook for Global Recovered Paper Markets

Hannah ZhaoHannah ZhaoSenior Economist, Recovered Paper

June 2015

1 © Copyright 2015 RISI, Inc. | Proprietary Information

Global OCC Market

$280OCC Export/Import Prices

$240

$280

e

• Chinese OCC imports dropped by 8% in the first

$160

$200

s pe

r Ton

ne quarter after falling by 6% in 2014

$120

$160

US

Dol

lars • Chinese OCC

imports from North America declined b 13% hil

$80

U

OCC China Import (CIF)OCC US West Export (FAS)

by 13% while imports from Western Europe i d b 9%

$0

$40

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

OCC US West Export (FAS) OCC N. German Export (FAS)OCC N. German Export in €

increased by 9%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Global OCC Market

Domestic OCC Prices

2,000

2,400

200

240US AVG (US$/tonne)-LGerman AVG (Euro/Tonne)-LChina Domestic OCC (RMB/tonne)-R

• Domestic demand/supply

1,600

2,000

160

200• Dependency

on trade

1,200120• OCC recovery

rate

80080 • Exchange rate

0

400

0

40

2006 2007 2008 2009 2010 2011 2012 2013 2014 20152006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Global ONP MarketChinese ONP imports continued to drop by about 4% in the first quarter after falling by 15% in 2014; recent newsprint capacity shut in Western Europe

$

$300US ONP#8Chi IM (CIF)

$220

$260

nne

China IM (CIF)Germany 1.11Germany 1.11 in €

$140

$180

lars

per

To

$100

$140

US

Dol

l

$20

$60

$2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

© Copyright 2015 RISI, Inc. | Proprietary Information4

Global Mixed Paper MarketChinese mixed paper imports dipped by 4% in the first quarter after increasing by 7% in 2014, with most of the decrease coming from the USA

$240

$280US MixChina IM (CIF)

$200

$240

onne

China IM (CIF)Germany 1.02Germany 1.02 in €

$120

$160

ars

per T

o

$80

$120

US

Dol

la

$0

$40

$02006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Sorted Office Paper MarketChinese imports of high grades increased by about 13% in the first quarter, and most of the increase was from Western Europe

$325

$375SOP-US SOP-UK

China IM (CIF) SOP-UK in £

$275

Tonn

e

China IM (CIF) SOP UK in £

$175

$225

Dol

lars

per

$75

$125US

D

$25

$75

2006 2007 2008 2009 2010 2011 2012 2013 2014 20152006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Data sources: RISI and Letsrecycle.com


2012 20142012 2014

9.58.5MT

17.716.5MT 4.94.6MT

1.81.7MT


Chinese RCP Domestic Collection vs. Imports

0 6080 Import share

0.50

0.60

70

80Domestic CollectionNet ImportsApparent Paper Recovery RateImport Share

Import share

1995: 10%

2000: 20%

0.4050

60

onne

s

2000: 20%

2005: 49%

2009: 44%0.30

30

40

Mill

ion

To 2009: 44%

2013: 39%

2014: 36%

0.10

0.20

20

30 0 36%

China is still far from being self-sufficient in terms

0.000

10 sufficient in terms of RCP despite continuously falling importsimports


Change in Chinese RCP Imports from Different Sources, 2014/2013

30

1015202530

10-505

10

cent

-25-20-15-10

Perc

-45-40-35-30

-50

• Chinese imports declined 6% in 2014. Imports from North America Japan and Western Europe dropped by 3% 15% and

9

America, Japan and Western Europe dropped by 3%, 15% and 5%, respectively.

© Copyright 2015 RISI, Inc. | Proprietary Information

US RCP Exports, Changing Destinations, 2014/2013

60

30405060

nt

102030

Perc

e

-100

• Total US net exports increased marginally by less than 1% in 2014 after dropping by 6% in 2013. Exports to China fell by 3%, but exports to Mexico and most other Asian buyers, such asbut exports to Mexico and most other Asian buyers, such as India, South Korea, Indonesia and Thailand, all increased.


Western European RCP Exports, p p ,Changing Destinations, 2014/2013100

75

100

25

50

rcen

t

0

25

Per

-50

-25

• Western European exports to China and Indonesia dropped by 3% and 6%, respectively, in 2014, but exports to India, Thailand and Vietnam all increased significantly.


Japanese RCP Exports, Changing Destinations, 2014/2013100

75

100

25

50

erce

nt

-25

0

Pe

-50

25

Si il t N A i d W E J t t Chi• Similar to N. America and W. Europe, Japanese exports to China dropped by 15% in 2014, but exports to South Korea, Thailand, Vietnam and India all increased.

• Will the trade flow changes seen in 2013-2014 continue in the future?


Other Asia: RCP Domestic Collection vs. Imports

60%50.0 Net import share

55%40.0

Domestic Consumption

Net Imports

Recovery Rate

Net import share

2000: 22%

2005: 18%

50%30.0

nes

2010: 15%

2013: 15%

45%20.0

Mill

ion

Tonn

2014: 16%

Net imports rose by

40%10.0

M 1 million tonnes in 2014. The import share grew again

ft d li i l t

35%0.0

after declining last decade, driven by growing demand from India Vietnamfrom India, Vietnam and others.


World RCP Markets in 2015-2016

• Asian Demand– China’s New Normal

• Slower paper and board production growth• Lower recycled fiber share• Capacity closure campaign

Other Asia– Other Asia• Faster than China? How fast?• Can this region catch up with China? When?g p• Emerging economies: India, Thailand, Indonesia, Vietnam• Developed countries and regions: South Korea and

T iTaiwan



• Asian demand– Japan

• RCP demand will stabilize or even increase, especially in the containerboard sectorthe containerboard sector

• North America– Announced new recycled fiber based containerboardAnnounced new recycled fiber based containerboard

lines in North America, particularly the USA, in 2014-2015

– Expected RCP demand growth in 2015-2016 • Western Europe will remain fairly flat in 2015-2016

– Expanding containerboard sector will see increasing RCP demand, but the developments in other paper and board sectors will drag total RCP demand downboard sectors will drag total RCP demand down



• How much more recycled it b dd d t th

RCP Usage Rate in Containerboardcapacity can be added to the

global containerboard sector? RCP usage rate

ContainerboardRegion 2014

Western Europe 96%– RCP usage rate• 90% worldwide in 2014

compared to 86% in 2009; how

Western Europe 96%Eastern Europe 84%China 112%

high can it go?– Planned new recycled

containerboard lines

Japan 96%Other Asia 111%Latin America 87%containerboard lines

worldwide– Cost

North America 49%Oceania 63%World 90%

• Will current low prices for bulk grades, including OCC, be long lasting or temporary?

World 90%

long-lasting or temporary?


OCC and Wood Fiber Cost in US South

$200

$150e

Wood Fiber Costs

OCC Fiber Cost$150

per T

onne

$100

Dol

lars

p

$50US

$0



• How about high grades of RCP? o about g g ades o C– Tissue sector

• Recycled fiber, virgin wood or even non-wood pulp? – Packaging paper and board sector

• White top– Cost comparison between recycled and virgin fiber

• New wood pulp linesSupply of high grades– Supply of high grades

• Falling printing & writing paper consumption


High Grades and Virgin Pulp

1 000$640Prices in the US Market

800

900

1,000

$520$560$600$640

SOP #37Envelope cutNBHK

600

700

800

$400$440$480$520 NBHK

400

500

600

$240$280$320$360

200

300

400

$120$160$200$240

0

100

200

$0$40$80

$120

$2000 2003 2006 2009 2012 2015


Asian Paper and Board Output and RCP Usage Rate

0 75

0.80200CNT OtherTissue P&WNews RCP Usage Rate

0.70

0.75150

nes

0.65100

illio

n To

nn

0.6050

M

0.50

0.55

02000 2002 2004 2006 2008 2010 2012 2014 2016


Asian Paper and Board Production

20142004 2014

27%

42%32%

China

Japan

59%14%

p

Other Asia

26%

2004: 124 Million Tonnes 2014: 183 Million Tonnes


Asian Recovered Paper Consumption and RCP Usage Rate

0.80150ONPOCCHigh Grades

0 60

0.70

90

120

nes

MixedRCP Usage Rate

0 50

0.60

60

90

lion

Tonn

0.40

0.50

30

60

Mil

0.3002000 2002 2004 2006 2008 2010 2012 2014 20162000 2002 2004 2006 2008 2010 2012 2014 2016


Asian Recovered Paper Consumption

20162012 2016

30%27% China

J

57%13%

60%13%

Japan

Other Asia13%

2012: 125 Million Tonnes 2016: 137 Million Tonnes


International Trade of RCP Will Remain Big Relative to Demand

• China will continue to import huge amounts of recovered paper

Sl i b t till i RCP d d– Slowing but still growing RCP demand– Domestic collection growth

• More packaging materials circulated domestically• More packaging materials circulated domestically, improving quality, better control and stable supply

– Importsp• New regulation on RCP imports, uncertainties of imports,

quality issues


International Trade of RCP Will Remain Big Relative to Demand

• New big importers– India, Thailand, Vietnam

• Fast growing demand and very low paper recovery rates• Fast-growing demand and very low paper recovery rates• Suppliers

– North America, Western Europe, Japan, Oceania…North America, Western Europe, Japan, Oceania… • Can they export more?


RCP Net Exports/Consumption Change in the Key Markets Between 2014 and 2016

4

Domestic Consumption2

Net Exports

12

n To

nnes

0n To

nnes

0Mill

io

-1M

illio

n

-2 -2


Global RCP Markets: What Lies Ahead?

• RCP pricingC p c g– World paper collection (recovery) rate will rise slowly,

but developments by region and grade will vary– Collection and processing costs– Other

• Virgin fiber prices, exchange rates, trade …

Gl b l d d/ l i b l• Global demand/supply imbalance– Trade will remain a big part of the global RCP market

R l d d i i fib b l ld id– Recycled and virgin fiber balance worldwide


Thank you for your attention!

Outlook for Global Recovered

For more information:

Paper Marketswww.risi.com/recoveredpaper

The China Recovered Paper Market: A Comprehensive Analysis and Outlookand Outlook www.risi.com/chinarcp

World Pulp and Recovered PaperWorld Pulp and Recovered Paper 5-Year & 15-Year Forecastswww.risi.com/forecasts

World Recovered Paper Monitorwww.risi.com/wrpm


outlook for global recovered paper marketsoutlook for ......title microsoft powerpoint - hannah zhao...

Documents