The general trend pushes up the demand for wood pulp, which is expected to grow at an average annual rate of 2.5% in the future

The general trend pushes up the demand for wood pulp, which is expected to grow at an average annual rate of 2.5% in the future

While the market remains clouded by economic uncertainty, underlying trends will further drive long-term demand for multipurpose, responsibly produced wood pulp.gift chocolate boxes

In 2022, under the negative impact of accelerating inflation, rising interest rates and the conflict between Russia and Ukraine, global economic growth is expected to decline. This also has direct and indirect impacts on the global wood pulp market.

“There may be short-term turbulence in the wood pulp market.” said John Litvay, partner at consulting firm Brian McClay & Associates (BMA).white chocolate boxer

Based on the forecast of slowing global economic growth, BMA lowered its forecast for wood pulp market growth in 2022 and 2023. Consumption growth is expected to be 1.7% per year.

AFRY Management Consulting Director Tomi Amberla agrees that the short-term outlook is more challenging than ever. Inflation, slowing economic growth and global political situation may lead to lower wood pulp demand.box chocolate

“Pulp demand changes every year. It is greatly affected by general economic developments,” he pointed out.

long-term growth and stability

However, experts say that the long-term growth prospects of the wood pulp market have not changed.

“We expect that in the next 10 to 20 years, the demand for wood pulp will grow at an average annual rate of 2.5%.” Litvay said.

In a study last year for the Federation of Finnish Forest Industries, AFRY estimated that the global wood pulp market will grow at a rate of 1-3% per year until 2035. Amberla said that estimate still holds true.

Oliver Lansdell, director of consulting firm Hawkins Wright, said that a key driver of wood pulp market growth is the growth in consumption of tissue paper, especially in emerging markets. Most tissue paper is made from market pulp.chocolate boxed cake recipes

“In the long run, we expect the demand for tissue paper to grow at a rate of 2% to 3% per year.” He estimated.

The general trend supports demand growth

Tissue consumption is closely linked to megatrends such as urbanization and consumer purchasing power, which are still growing, especially in emerging economies.

“Global megatrends are supporting demand growth for basic wood pulp, with increasing use of packaging board and tissue products. This will provide a solid basis for long-term demand growth. Of course, there will continue to be cyclicality from year to year Volatility,” said Amberla.

A prime example of a growth product category is hygiene products made from tissue, such as toilet paper, toilet paper, and handkerchiefs.whitman’s chocolate box

At the same time, with the improvement of living standards of residents in emerging economies, the demand for wood pulp-based paperboard and other packaging materials is also growing. More and more consumers are buying packaged food from grocery stores instead of going to traditional market stalls.

The fast-growing online shopping industry also requires more packaging materials to transport products.

Wood fiber instead of plastic

Lansdell said the global green transition away from fossil raw materials is driving up wood pulp demand. Alternative materials must be renewable and have a lower carbon footprint. Take, for example, the packaging industry, which is looking for solutions to replace plastic in disposable tableware and food packaging.

“People are also looking at fiber alternatives to plastic bottles. Both recycled and fresh fibers are needed for these applications. We will definitely see more wood fiber-based innovations in the next few years,” he said.chocolate frog box

Driving this development is legislation restricting the manufacture of products from fossil sources. For example, the European Union has banned some single-use plastic products, and many countries have restricted the use of plastic bags.

Litvay pointed out that wood pulp-based textile fibers will also play an increasingly important role in the global textile market in the future.

“Demand for sustainably produced textile fibers will continue to grow as petroleum-based materials are replaced with less environmentally harmful alternatives. In addition, cotton cultivation is under pressure as it uses large amounts of water and uses up available space for food production,” he said.box data storage

Textiles made from wood fibers will make their breakthrough in the coming years, agrees Lansdell.

“Finland is a big pioneer in developing new technologies. Although production is still expensive, costs are coming down. The opportunity is huge. Consumers, governments and NGOs want alternatives to polyester and cotton.”

Demand for all wood pulp products

All wood pulp products have bright long-term growth prospects, Amberla said.

“Megatrends will have a positive impact on demand for bleached and unbleached softwood and hardwood pulp.”

Applications such as tissue, packaging materials and office paper require bleached softwood and hardwood pulp. The demand for unbleached wood pulp is driven by packaging, which is necessary to transport online shopping items as well as food.

“Demand for unbleached wood pulp is increasing due to China’s import restrictions on recycled paper. In the production of packaging boards, fresh fiber needs to be replaced,” Litvay pointed out.date night subscription box

Global Greening from Fossil Raw Materials

The transformation is driving up wood pulp demand.

We expect that in the next 10 to 20 years,

Wood pulp demand will grow at an average annual rate of 2.5%.

 Growth Focus on Asian Markets

 In the future, China will play an increasingly important role in the global wood pulp market. China’s share of market pulp consumption has risen to about 40%.

“China’s paper and paperboard industry is already quite large and will continue to grow in the next few years, but at a slower rate. However, there may be insufficient domestic fiber.” Lansdell said.date box subscription

In addition to China, the demand for wood pulp in other emerging economies is also growing. For example, Indonesia, Vietnam, and India all have growing middle classes, albeit at different stages of development.

The Indian Paper Manufacturers Association (IPMA) expects India’s paper consumption to grow by 6-7% in the next few years.

“In the fastest-growing population regions of the world, there is a limited supply of wood. Market pulp is the most economical form of raw material for local paper mills, because it is not economical to transport products such as tissue paper across seas.” Amberla said.

Global demand for wood pulp has also been driven by a decline in the volume of high-quality recycled fiber due to declining consumption of printing and writing paper in Europe and North America, he noted.

“In the manufacture of new products, unobtainable recycled paper must be replaced with fresh fiber.”

Increased fluctuations in the wood pulp market

Predicting wood pulp prices has never been easy, and Amberla said heightened price volatility presents additional challenges. This is mainly due to China becoming one of the world’s largest buyers of wood pulp.

“The Chinese wood pulp market is speculative in nature. Due to the high fluctuations in the output of local wood pulp mills, the growth of China’s own wood pulp production capacity will further increase volatility.”

When prices for domestic lumber raw material and imported wood chips are low, it pays to keep mills running at full capacity. In the case of expensive raw materials, more commercial pulp is used for papermaking in China.date night box

Changes in global wood pulp supply have exacerbated fluctuations in the international wood pulp market. Amberla said the recent supply shocks have been more severe than usual for a number of reasons.

The COVID-19 pandemic has disrupted production and supply chains at some factories in North America and elsewhere. Congestion at major ports and occasional container shortages have also affected pulp shipments.

Climate change is also affecting the wood pulp market. Unusual weather conditions have hampered production plant operations in Canada, for example, and flooding and landslides caused by heavy rains last year disrupted road and rail links in British Columbia.