Overcapacity of Chinese boxboard drives down global operating rates, placing competitive pressures on North American and Western European suppliers
Global boxboard demand has advanced by 2-3% annually on average since the early years of the last decade, which compares favorably to many other segments of the pulp and paper industry that are stagnant or in decline.
Despite the steady global demand gains, China’s boxboard industry has experienced unprecedented production growth over the last decade. Explosive capacity expansion reversed the nation’s former trade deficit of boxboard to a surplus that exceeded 1 million tonnes in 2014. Growing Chinese boxboard shipments to critical markets in Asia, Africa and the Middle East have proven disruptive to key virgin boxboard exporting regions like North America and Western Europe. These and other findings were recently published in the World Boxboard Study, a new analysis from RISI – the leading information provider for the forest products industry.
“On the supply side, China has risen as a major player in the global boxboard industry due to a tremendous build-out in boxboard capacity since 2002. Domestic demand growth has been strong, advancing 9% annually from 2002-2014, but this has lagged behind 12% production growth in this market over the same period,” said Dustin Jalbert, Economist of Packaging Paper at RISI and the lead author on the study.
“Investment has been particularly concentrated in virgin boxboard grades over the last five years—bolstering capacity of these grades. Chinese suppliers are capturing commodity boxboard markets in nearby regions, placing competitive pressures on North American and European virgin boxboard suppliers dependent on exports for continued growth. The glut of boxboard from China has understandably raised concerns over new European projects coming on line over the next two years and how this capacity will be absorbed into market,” continued Jalbert.
In the World Boxboard Study, Jalbert and other analysts provide an outlook for the global market over the next five years. The study includes grade-level demand, supply and trade analysis of the global cartonboard market.
Included in the World Boxboard Study:
A global grade classification system to enable a holistic view of the global market
Grade-level demand, supply and trade analysis of the global cartonboard market
Global trade patterns for each major grade, and a list of upcoming projects by region
Analysis of world regions that will experience the strongest growth during the next five years
Analysis of the impact on traditional and high-end cartonboard suppliers as new capacity enters the global market
Regional cost curve analysis for select grades and regions (USA, Western Europe, China), along with integrated pricing analysis
Revised history from 2012 edition, including improved estimates on the poly coated board market sizing