Australian and NZ imports for printing paper are in freefall, with IndustryEdge reporting that Australia’s total imports have fallen 14.4%, whilst NZ imports fell by an even larger 15.7% for the year to June 2023.
IndustryEdge reports that the latest data, which excludes newsprint, follows a deterioration in European and North American market fundamentals for higher-quality papers.
It comes as paper prices have dropped sharply in recent months, with global demand for print and writing paper in structural decline.
And whilst global prices are starting to pick up in the northern hemisphere in preparation for the festive season, the market is in long-term decline in the US and Europe, with sluggish demand also reported in China.
Last month, Wood Central reported that two of the world’s largest forest companies – Canfor and West Fraser Timber, attributed poor financial results to the deteriorating pulp and paper market.
At the same time, the Russian industry is facing an acute crisis in sales, with weakening Chinese demand, high export logistics, sanctions and competition from India, Argentina and Brazil leading to mill closures.
On the supply side, the vast majority of imports rely on European imports, which use China as a waypoint.
Wood Central understands that Russia has in the past accounted for 4% of the global pulp exports – with a significant portion of pulp ending up in the supply chain for European paper products manufactured worldwide.
Until the war, it had a 22% share of the global trade for softwood lumber and pulpwood logs.
Ukraine, where forest product exports have virtually stopped following a blockade in the Black Sea, has historically exported starch and clay, amongst other materials used to produce print paper.
These factors and the long-term decline in demand and consumption of print paper have resulted in a “significant deterioration in global pulp market fundamentals.”
According to Tim Woods, Managing Director of IndustryEdge, the latest numbers reflect falling consumption and demand, with both markets potentially yet to feel the full effects of the European slowdown.
The latest data continues a worrying trend, with IndustryEdge reporting that volumes to May 2023 fell by a similar amount – 14.4% in Australia and 13.2% in New Zealand.
Mr Woods said the falling imports are no surprise, “but the magnitude of the declines is pretty dramatic for Australia and New Zealand.”
On the supply side, both markets have historically imported higher-quality papers used in magazines and catalogues – from European markets – rather than newsprint and copyright, which can be supplied from Southeast Asian markets.
The data also feeds into falling consumption and demand, with the industry under siege following “an acceleration of fifteen years of near-relentless falls in consumption of printing and communication paper grades,” Mr Woods said.
“Imports have continued to fall for most grades, with the June quarter particularly bad in both countries.”
Australian Data
In Australia, imports of printing and communication papers for the year dropped by 290.9 kt – which, according to IndustryEdge, equates to a drop in total imports of 48.8 kt.
In June alone, imports were down 25.5% compared to May – a total of 15.7 kt – representing a 29.5% drop in June 2023 imports over June 2022 and a quarter drop of 24.7% over the June quarter in 2022.
The sole caveat, according to IndustryEdge, “is that imports of A4 copy paper are not being reported and will have pushed the Australian import volumes higher.”
For more information, including a breakdown by product type, view the latest data via IndustryEdge’s Pulp and Paper Edge online data.
New Zealand Data
Unlike Australia, New Zealand does not have a local pulp and paper manufacturing industry, with imports making up the total supply.
“All its printing and communication papers are imported, so there is no hiding from the fact that falling imports feed directly into falling consumption,” Mr Woods said.
In June 2023, imports were up 13.6% compared to the prior month, to total 6.0 kt for the month.
Imports were down 31.8% over the quarter ending June, compared to the same period in 2022, with total imports down 15.7% over the year to June 2023.
For more information, including a breakdown by product type, view the latest data via IndustryEdge’s Pulp and Paper Edge online data.
What does the future have in store for imports?
According to Mr Woods, “These annual numbers will deteriorate further before they flatten out, perhaps by the end of the year,”
“What level they flatten out is a different question and will vary across the grades,” he said.
- This item was first published in Edition 218 of Pulp & Paper Edge (August 2023). Detailed market analysis is provided for subscribers throughout the monthly Pulp & Paper Edge Data and Information Service and via the downloadable data files and analysis tools.
