Rod Young, Chief Economic Advisor, RISI
Dec. 3, 2012
After a second consecutive year of only 1% growth in 2012, world paper and board demand is predicted to rise 3% in 2013. Accelerating economic growth will be a significant factor in this positive forecast, although we are showing only a modest acceleration. More important will be our assumption that consumer inventories will stabilize, or even rise, as underlying consumption improves. Also, we are expecting that the graphic paper share losses to electronic alternatives will relent to some degree next year. Therefore, growth in global paper and board demand will move closer to the increase in the general economy compared to 2011-2012.
We are far from getting excited about the growth prospects for graphic papers despite our assertion that share losses will moderate, at least in the short term. World newsprint usage is projected to register yet another year of decline in 2013, just not as rapidly as in the previous two years. Global printing and writing paper demand is predicted to register positive growth of 2%, after a flat performance in 2011-2012. Despite this small rebound, printing and writing paper consumption will remain 7 million tonnes below the peak reached in 2007. Newsprint usage will be 9 million tonnes lower in 2013 as compared to 2007, which translate into a huge 23% drop.
The growth engines for the world paper and board industry will continue to be tissue and packaging. World tissue consumption is forecast to increase 4.5% in 2013, or slightly above the annual pace of the previous three years, and will be 6 million tonnes above its 2007 level or 22% higher. Global containerboard demand is predicted to rise 4% in 2013, following 2.5% annual growth in 2011-2012, with the growth relative to 2007 being 23 million tonnes or an 18% gain. Other paper and board usage, led by boxboard and specialty papers, is also expected to advance 4% in 2013, compared to 2% annual increases in 2011-2012. Other paper and board demand will be 9 million tonnes above 2007 in 2013, translating into an 11% rise.
Both tissue and paper packaging have strong underlying dynamics that will support higher usage over the long term as well as the short term. World tissue consumption is being led by rising consumer incomes in the developing world, especially in China. Per-capita income in China has reached a level where there is usually accelerating per-capita usage of tissue products and this is proving to be the case once again. Paper packaging, particularly containerboard, is driven by continuing growth in consumer products, a lack of viable competitive products, and strong environmental credentials. Further gains in global trade are also highly supportive.
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Rod Young, Chief Economic Advisor, works out of RISI's Bedford, MA, USA office, Email: firstname.lastname@example.org