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China Boosts Imports of Chemical Wood Pulp to Meet Growing Demand for Paper Packaging


China Boosts Imports of Chemical Wood Pulp to Meet Growing Demand for Paper Packaging

IndexBox has just published a new report: ‘China – Chemical Wood Pulp – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, China increased its chemical wood pulp imports by +10% y-o-y to 24M tonnes. It was driven by rising demand for paper packaging and tableware amid the pandemic and further stimulated by a sharp fall in import prices last year. Brazil, Indonesia and Canada are the major suppliers, providing 57% of the total import volume. Bleached sulphate pulp accounted for 95% of total wood pulp imports into China

Chemical Wood Pulp Imports into China by Country

Chemical wood pulp imports into China amounted to 24M tonnes in 2020, growing by +10% against the previous year’s figure.  A sharp fall in pulp prices last year also encouraged importers to increase purchases. In value terms, chemical wood pulp imports fell by -9.5% to $12B in 2020 (IndexBox estimates).

In 2020, Brazil (7.2M tonnes) constituted the largest chemical wood pulp supplier to China, with a 30% share of total imports. Moreover, chemical wood pulp imports from Brazil exceeded the figures recorded by the second-largest supplier, Indonesia (3.5M tonnes), twofold. The third position in this ranking was occupied by Canada (2.9M tonnes), with a 12% share.

In 2020, the highest increases in terms of chemical wood pulp volume supplied to China were registered in Indonesia (+25.2% y-o-y), Brazil totalled (+14.6% y-o-y) and Russia (+10.2% y-o-y). By contrast, Canada reduced its export volume to China by -3.6% y-o-y.

In value terms, Brazil ($3.3B) constituted the largest supplier of chemical wood pulp to China, comprising 28% of total imports. The second position in the ranking was occupied by Canada ($1.6B), with a 14% share of total imports. It was followed by Indonesia, with a 13% share.

The average chemical wood pulp import price stood at $507 per tonne in 2020, falling by -17.8% against the previous year. A drop in demand for chemical wood pulp from printing and writing paper mills became the main reason for the price reduction.

Average prices varied somewhat amongst the major supplying countries. In 2020, the countries with the highest prices were the U.S. ($582 per tonne) and Canada ($569 per tonne), while the prices for the product from Indonesia ($448 per tonne) and Brazil ($467 per tonne) were amongst the lowest.

Chemical Wood Pulp Imports by Type

In 2020, bleached sulphate pulp (23M tonnes) was the main type of chemical wood pulp supplied to China, with a 95% share of total imports. Moreover, bleached sulphate pulp exceeded the figures recorded for the second-largest type, unbleached sulphate pulp (1.1M tonnes), more than tenfold.

In value terms, bleached sulphate pulp ($11.4B) constituted the largest type of chemical wood pulp supplied to China, comprising 95% of total imports. The second position in the ranking was occupied by unbleached sulphate pulp ($560M), with a 4.7% share of total imports.

Source: IndexBox Platform


Robust Demand for Wood Pulp and Construction Materials Buoys the Global Roundwood Market

IndexBox has just published a new report: ‘World – Industrial Roundwood – Market Analysis, Forecast, Size, Trends and Insights. Here is a summary of the report’s key findings.

The global industrial roundwood market is estimated at a huge figure of approx. $312B, which equals to near 2B cubic meters. In 2020, despite a slowdown in the market growth due to the pandemic, the roundwood market is buoyed by robust global demand from the packaging and construction industries. The increase in online sales as a result of the pandemic has boosted the market for cardboard packaging and wooden pallets for shipping. In 2021, the decline in mortgage lending rates spurred the U.S. real estate market to record growth. Given the social isolation and working from home, the construction of new suburban single-family dwellings posts solid gains, leading to an increase in demand for lumber and wood-based panels, as well as for those used in furniture manufacturing. Similar trends are more or less relevant for many countries in the world.

Driven by increasing demand for industrial roundwood worldwide, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +1.5% for the period from 2019 to 2030, which is projected to bring the market volume to 2.4B cubic meters by the end of 2030.

Despite the strong performance of the downstream industries against the pandemic, the roundwood industry faced both pandemic-related and environmental challenges. In 2020, in addition to supply chain disruptions and reduced working hours for timber industry workers, wildfires have destroyed large areas of Australian and American forests. The European industry continued to suffer from beetle infestations which damage the roundwood harvests.

Increasingly, there are speculations that the rise in wildfires and beetle epidemic is caused by climate change and inappropriate forestry management in past. If the impact of climate change will be confirmed, the consequences of global warming could seriously threaten the industry with a decline in the raw material base in the long term.

Sustainability at all stages of the value chain is becoming a key long-term market trend. Agreements to reduce greenhouse gas emissions such as The European Green Deal, the Paris Climate Agreement and The United States-Mexico-Canada Agreement (concerning the environment chapter) should promote the development of a market for biodegradable and wood-based packaging. The European Council is developing a new forestry strategy with a key goal of ensuring sustainability due to effective afforestation, forest preservation and restoration in the EU.

Announced Limitations on Roundwood Exports from Russia to Shift Supply Chains on the Asian Market

A shift in the global roundwood market may appear after the announced possible ban on the export of coniferous logs and valuable hardwood logs in Russia in 2022. The Russian government is purposefully planning to reduce the export volume of unprocessed timber and export more value-added products. The consequences should affect, first of all, China, which should be able to look for new suppliers of softwood. This could lead to increased competition between Oceania, Europe and America in the global sawlog market. In the medium term, the replacement of roundwood with sawn timber from Russia may become another option for Chinese importers.

Global industrial roundwood exports amounted to 224M cubic meters in 2019. In value terms, industrial roundwood exports declined slightly to $16.2B (IndexBox estimates). New Zealand (42M cubic meters) and Russia (29M cubic meters) were the key exporters of industrial roundwood in 2019, resulting in near 19% and 13% of total exports, respectively. They were distantly followed by the Czech Republic (19M cubic meters), Germany (15M cubic meters), the U.S. (14M cubic meters) and Uruguay (12M cubic meters), together achieving a 27% share of total exports. In value terms, New Zealand ($2.2B), the U.S. ($1.7B) and Russia ($1.4B) appeared to be the countries with the highest levels of exports in 2019, with a combined 33% share of global exports.

Source: IndexBox AI Platform