World’s boxboard industry confronts slumping demand, risks of oversupply


Global studies find slowing growth and excess capacity, but some regional bright spots

Boston, October 01, 2019 (Press Release) – After more than a decade of growing global demand for paper packaging, the world’s boxboard industry now faces risks of excess capacity, as demand slumps in key markets. Boxboard producers in Asia, Europe, and the Americas face region-specific challenges as well as risks threatening growth worldwide. These challenges and opportunities are explored by the World Boxboard Study, a comprehensive global research product from Fastmarkets RISI, comprised of three studies covering key regions for boxboard.

“Even after the 2008 economic crisis, the fundamentals were still in place for packaging demand to keep growing,” said Ken Waghorne, Fastmarkets RISI Vice President for Global Packaging, including growth in incomes, population, and urbanization. “But since 2017, boxboard has faced headwinds on the demand side in Asia, Europe, and the Americas,” he continued.

“When combined with the fiber-supply disruption of China’s RCP import controls, plus rapid capacity expansion, the boxboard industry faces challenges in terms of fiber costs, sales growth, operating rates, and profits,” Waghorne said.

These global trends are complicated by regional conditions, which is why industry authority Fastmarkets RISI has produced separate studies for Asia, Europe, and the Americas. Region-specific trends in the boxboard space include:

  • Led by China, boxboard demand in Asia grew at an average rate of more than 5% annually in 2004-2017. It’s now the world’s largest market – but China’s demand fell about 6% in 2018. Producers in China are raising exports to the rest of Asia to keep plants humming, but other Asian countries will play a larger role in growth in 2019-2023.
  • More than 80% of European boxboard consumption is concentrated in 10 countries. Growth potential is limited in these mature markets, and Brexit and other macroeconomic risks add to the risks of oversupply.
  • Until recently, US waste paper fueled China’s boxboard production – some of which was then exported to the US. As China’s producers scramble for other fiber sources, Brazil and Chile are positioned to boost their own exports to US markets.

The three regional components of the World Boxboard Study provide grade-level demand, supply and trade data and analysis of global cartonboard markets. The forecasts for Asia, Europe, and the Americas are built around a proprietary grade classification system that enables comparative analysis worldwide.

For more information, visit www.risi.com/worldboxboard

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About Fastmarkets RISI

Fastmarkets is the leading price reporting, analytics and events organization for global commodities markets, including the forest products sector, as Fastmarkets RISI. Businesses working in the pulp and paper, packaging, wood products, timber, biomass, tissue, and nonwovens markets use Fastmarkets RISI data and insights to benchmark prices, settle contracts and inform their strategies worldwide. Along with objective price reporting and industry data, Fastmarkets RISI provides forecasts, analysis, conferences and consulting services to stakeholders throughout the forest products supply chain.

About Fastmarkets

Fastmarkets is the leading price reporting, analytics and events organization for the global metals, mining and forest products markets. Fastmarkets’ core activity in pricing drives transactions in commodities markets around the world and is complemented by news, industry data, analysis, conferences and insight services. Fastmarkets includes brands such as Fastmarkets MB, Fastmarkets AMM, Fastmarkets RISI and Fastmarkets FOEX (previously known as RISI and FOEX, respectively). Its main offices are in London, New York, Boston, Brussels, Helsinki, São Paulo, Shanghai, Beijing and Singapore. Fastmarkets is a part of Euromoney Institutional Investor PLC, a listed company on the London Stock Exchange. Euromoney is a leading international business-to-business information group focused primarily on the global commodities, banking, and asset management markets.

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For Press Enquiries, please contact:

Alan Petrillo
Marketing Manager/Special Studies

P: 781-778-7592
E: apetrillo@fastmarkets.com

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