Paper Packaging Practice June Copyright 2015 RISI, Inc. All rights reserved.

Transcription

1 Global Containerboard Outlook Ken Waghorne, VP Paper Packaging Practice June

2 Today s Agenda Regional Containerboard Markets Asia Europe Western Eastern North America Latin America Rest of World Global Summary 2 2

3 Asian Demand for Containerboard Far Surpasses Other Regions (2014) China World Total 152 MM Tonnes Up 19% from % 21% 19% 8% 5% Asia Total Europe North America Latin America All Other

4 Asian Demand Increased 31 Million Tonnes During the Last 10 Years, and Recycled Grades Captured All the Growth Consumption in 2004: 40.7 Million Tonnes 3% 14% Consumption in 2014: 72.0 Million Tonnes 1% 8% 83% 91% 4 4 Kraftliner Recycled Semichem.

5 While China Dominates the Discussion of the Asian Markets, the Other Countries Have Recorded Significant Growth 80 Millio on Tonnes China South Korea Japan India Indonesia Thailand Rest of Asia

6 The Chinese Industry Was Slow to Recognize the Maturing Chinese Market, Creating Disruptions in the Market 25.0% Demand Growth 20.0% Capacity Growth 15.0% 10.0% 5.0% 0.0% 6

7 Most Countries Outside of China Are Expected to Grow at Faster Growth Rates Than China in Rest of Asia Pakistan Philippines Singapore Malaysia Hong Kong Thailand Indonesia India Taiwan South Korea Japan China % 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Average Annual Growth

8 Asian Containerboard Markets Outside China Will Likely Remain Balanced Compared to China in Growth, Million Tonnes and Operating Rate (%) Rest of Asia 100.0% % % % % % % % % % 0.5 China 75.0% Demand Capacity Operating Rate (Right) 100.0% 97.5% 95.0% 92.5% 90.0% 87.5% 85.0% 82.5% 80.0% 77.5% 75.0% 8 8

9 Net Imports into the Asian Market Will Grow Just 100,000 Tonnes in China Rest of Asia

10 Looking Closely: Western Europe % 21% 35% 20% 5% 36% 19% 4% 6% 40% 41% 38% Recycled: 72% in 2001, 77% in 2014 By 2016 recycled will be 78% 2001 In 2016 demand will still be below the precrisis period Recycled Medium Testliner Kraftliner Semichemical Medium 10

11 Looking Closely: Emerging Europe % 35% 19% 33% 9% 40% 17% 8% 14% 35% 35% 34% 2001 Recycled: 67% in 2001, 75% in 2014 By 2016 recycled will be 76% By 2010 demand was above pre-crisis period Recycled Medium Testliner Kraftliner Semichemical Medium 11

12 In Both Regions, Capacity Expansion Should Exceed Demand Growth 2.0 Western Europe 2.0 Emerging Europe Demand Capacity 12

13 Recycled Grades Flowing from Left to Right Within Europe: From Western to Emerging g Europe Outside Europe: To the Middle East and Africa 3,000 2,500 Western Europe, Net Exports Trade Surplus Emerging Europe, Net Imports Trade Deficit 2,000 1,500 1,

14 Virgin Grades Flowing from Right to Left Within Europe: From Emerging Europe to Western Europe Outside Europe: North America Is an Important Supplier to Western Europe 1,400 1,200 1, Western Europe, Net Imports Emerging g Europe, Net Exports Trade Deficit Trade Surplus

15 European Profitability Still Good Relative to Graphic Paper Kraftliner Testliner Newsprint UWF CWF

16 The Last Decade Was Difficult for North American Producers as Outsourcing Hurt Manufacturing Consumption in 2004, Consumption in 2014, 31.4 Million Tonnes Million Tonnes 21% 17% 48% 27% 52% 35% Kraftliner Recycled Semichem.

17 North American Containerboard Producers Have Learned to Keep Capacity in Line with Demand % Growth h, Million Tonnes % 90% 85% 80% Opera ating Rate Production -2.0 Capacity 75% Operating Rate % 17

18 Profit Margins (Prices/Variable Costs) in North America Are at the Highest Sustained Level in More Than a Decade Southern Kraftliner Recycled Liner

19 North America Is Well Positioned to Meet Future Growth in Global Kraftliner Demand Share (R) Exports 32% 29% es Mi illion Tonn % 23% 20% Share of Produc ction % % 19

20 Brazil and Mexico Have the Largest Markets in Latin America, But Robust Growth Extends Throughout the Region Millio n Tonnes Argentina Chile Rest of Latin America Mexico Brazil

21 Latin American Capacity Expansion Tailed Off in 2014, But So Did Demand Production Capacity Operating Rate 100% 95% 90% Growth Million To onnes % 80% 75% 70% Op perating Ra ate % % % 21

22 Brazil Is the Only Net Exporter in Latin America, and Sells Throughout the World Kraftliner Exports, Thousand Tonnes f 2016f Argentina Other South America Central & North America Europe Africa Rest of World Total Exports

23 The Rest of Latin America Relies on Imports to Meet Demand, Mainly from the United States Tonnes Net Impor rts, Million

24 Africa and the Middle East Are Both Markets with Growing Containerboard Demand, While Oceania Is Much More Mature Million Ton nnes Avera age Annua al Growth, Africa Middle East Oceania Demand Capacity Demand Capacity

25 Net Imports into Africa Will Grow in , But Conditions Will Remain Challenging g in the Middle East Middle East Africa Millio on Tonne es

26 Oceania Is a Net Exporter of Mainly Virgin Containerboard, But Is Not Expected to Add to Supply in Net Import ts, Million Tonnes

27 Bottom Line: Developing Markets Will Continue to Provide All Growth in Global Containerboard Demand 180 Developed Economies 150 Developing Economies Global Growth (R) % 12% 9% 90 6% 60 3% 30 0% %

28 Profit Margins (Prices/Variable Costs) in North America Are Well Above Those in Other Regions Southern Kraftliner European Testliner US Recycled Liner Chinese Kraft Top Copyright 2014 RISI, Inc. All rights reserved.

29 Take Home Points on Global Containerboard The Asian market remains one of the fastest growing markets in the world Despite the dramatic slowdown in Chinese demand Europe is oversupplied at the moment New capacity from conversions from graphic paper Latin America will remain a growing net importer of containerboard Even with a gradual increase in exports from Brazil North American producers continue to have capacity available for sale to the export market But lower profitability for exports could reduce willingness to sell into export markets 29 29

30 Thank you for your attention! Much of the information in this presentation is updated regularly in the following: World Containerboard 5-Year Forecast i 30 30