Global Containerboard Outlook - Fastmarkets RISI · 2018-03-02 · Containerboard Prices in China...
Transcript of Global Containerboard Outlook - Fastmarkets RISI · 2018-03-02 · Containerboard Prices in China...
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Global Containerboard Outlook
Gleb SinavskisEconomist, European Paper Packaging
European ConferenceMarch 2018
Gleb Sinavskis
• Previous experience in the financial services industry
• Masters in Economics from Uppsala University, Sweden
• Author/co‐author of the Paper Packaging Monitor Europe and European Paper Packaging 5‐ and 15‐Year Forecasts
Economist, European Paper Packaging
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• Global Overview• Asia• North America• Europe• Conclusion
Agenda
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Synchronized Global Economic Growth
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Growing Global Population and Urbanization
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Rising Share of E‐Commerce in Global Retail Sales
24.6%23.2%
21.1%19.1%
17.4%16.1%
8.7%10.1%
11.6%13.1%
14.6% 15.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2016 2017 2018 2019 2020 2021
Retail E‐Commerce Sales
Percentage Change
Percentage of Total RetailSales
Source: eMarketer, June 2017
Global Containerboard Demand Growth Is Above Average in 2018‐2019Apparent Consumption, Thousand Tonnes
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
020406080100120140160180200
2011 2012 2013 2014 2015 2016 2017 2018 2019
Virgin Containerboard Recycled Containerboard Demand Growth, %
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Recycled Containerboard Capacity Growth Continues to Outpace VirginCapacity, MillionTonnes
26% 22.5%020406080100120140160180200
2011 2012 2013 2014 2015 2016 2017 2018 2019
Virgin Containerboard Recycled Containerboard
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Global Containerboard DemandAsia has the largest market, followed by North America and Western Europe
48%
18%
14%
8%
7%5%
Far East
North America
Western Europe
Latin America
Emerging Europe
All Other
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Global Virgin Containerboard Demand Is Dominated by North America41 million tonnes in 2017
17%
47%
12%
12%
6%6%
Far East
North America
Western Europe
Latin America
Emerging Europe
All Other
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Asia
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China Continues to Account for More Than 60% of Asian Demand Apparent Consumption, Thousand Tonnes
010,00020,00030,00040,00050,00060,00070,00080,00090,000
100,000
2012 2013 2014 2015 2016 2017 2018 2019
Other Countries
Japan
Thailand
Indonesia
India
Taiwan
South Korea
China
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OCC Price Volatility in ChinaUS Dollars per Tonne
140
190
240
290
340
390
440
490
Jan 2013
Apr 2
013
Jul 2013
Oct 2013
Jan 2014
Apr 2
014
Jul 2014
Oct 2014
Jan 2015
Apr 2
015
Jul 2015
Oct 2015
Jan 2016
Apr 2
016
Jul 2016
Oct 2016
Jan 2017
Apr 2
017
Jul 2017
Oct 2017
Jan 2018
OCC (1.05) Importsfrom Europe (NetPrice)
OCC, Imports fromJapan (Net)
OCC, Imports fromthe USA (Net)
OCC, Post‐Consumer(Domestic, Net Price)
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Containerboard Prices in China Increased Substantially, Driven by Escalating CostsUS Dollars per Tonne
400
500
600
700
800
900
1,000
Jan 20
13Mar 201
3May 201
3Jul 201
3Sep 2013
Nov
201
3Jan 20
14Mar 201
4May 201
4Jul 201
4Sep 2014
Nov
201
4Jan 20
15Mar 201
5May 201
5Jul 201
5Sep 2015
Nov
201
5Jan 20
16Mar 201
6May 201
6Jul 201
6Sep 2016
Nov
201
6Jan 20
17Mar 201
7May 201
7Jul 201
7Sep 2017
Nov
201
7Jan 20
18
Kraft Top Liner, 170 g,East China
Testliner, 140 g, EastChina
High‐Strength CorrugatedMedium, 120 g, EastChina
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Monthly Imports in China in 2016‐2017 by GradeTonnes
0
50,000
100,000
150,000
200,000
250,000
Recycled Liner Recycled Medium Semichemical Medium Kraftliner
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Monthly Imports in China in 2016‐2017 by RegionTonnes
0
50,000
100,000
150,000
200,000
250,000
Jan
Feb
Mar
Apr
May Jun Jul
Aug
Sep
Oct
Nov Dec Jan
Feb
Mar
Apr
May Jun Jul
Aug
Sep
Oct
Nov Dec
Far East & Oceania North America Russia & CISSoutheastern Europe (Turkey) Western Europe Middle East
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Chinese Imports Forecast Has Significant Upward Pressure
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2012 2013 2014 2015 2016 2017 2018 2019
Chinese ImportsMillion Tonnes
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Announced Capacity Additions in China Outpace Demand GrowthChange in Million Tonnes
83%84%85%86%87%88%89%90%91%92%93%
‐1.0
‐0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2013 2014 2015 2016 2017 2018 2019
Demand Capacity Operating Rate
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Other Asian (Excl. China) Operating Rates Trending Up as Both Demand and Exports to China GrowChange in Million Tonnes
84%
85%
86%
87%
88%
89%
90%
91%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2013 2014 2015 2016 2017 2018 2019
Demand Capacity Operating Rate
North America
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North American Box Market Shows Strong GrowthPercentage Change of Shipments
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2011 2012 2013 2014 2015 2016 2017 2018 2019
PERC
ENTAGE CH
ANGE
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Operating Rates in North America to Stay HighChange in Thousand Tonnes, Percent
92%
93%
94%
95%
96%
97%
98%
99%
‐500
0
500
1,000
1,500
2011 2012 2013 2014 2015 2016 2017 2018 2019
Demand Capacity Operating Rates
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North American Net Exports of Containerboard Will IncreaseChange in Net Exports, Million Tonnes
‐200‐150‐100‐50050
100150200250
2014 2015 2016 2017 2018 2019
Virgin Containerboard Recycled Containerboard
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North American Prices Rose, Gap Between Domestic and Export Prices Decreased SignificantlyUS Dollars per Short Ton
380
430
480
530
580
630
680
730
Q2‐2013
Q3‐2013
Q4‐2013
Q1‐2014
Q2‐2014
Q3‐2014
Q4‐2014
Q1‐2015
Q2‐2015
Q3‐2015
Q4‐2015
Q1‐2016
Q2‐2016
Q3‐2016
Q4‐2016
Q1‐2017
Q2‐2017
Q3‐2017
Q4‐2017
Feb 2018
US East, Unbleached Kraftliner, 42lb, Open Market
China, Unbleached KraftLinerboard, 175 g+
Southern Europe, UnbleachedKraft Linerboard, 175+ g
Central/South America,Unbleached Kraft Linerboard(FAS), 42 lb
Europe
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Recycled Containerboard, Western EuropeOperating rates will remain above 94% through 2019
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1.6% 3.9% 2.7% 1.8%
91.0%
92.0%
93.0%
94.0%
95.0%
96.0%
97.0%
98.0%
99.0%
18
5,018
10,018
15,018
20,018
25,018
30,018
2015 2016 2017 2018 2019
MILLION TONNES
Demand (APC) Capacity Operating Rate
Virgin Containerboard, Western EuropeOperating rates will stay close to 98% in 2018‐2019
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3.6% 3.9% 2.1% 2.6%
87.0%
89.0%
91.0%
93.0%
95.0%
97.0%
99.0%
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
2015 2016 2017 2018 2019
MILLION TONNES
Demand (APC) Capacity Operating Rate
Net Trade Trends in Western EuropeVirgin containerboard net imports to increase slowly
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‐1.0
‐0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2015 2016 2017 2018 2019
MILLION TONNES
Virgin Containerboard Recycled Containerboard
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Germany: Prices Rose to Record Levels in 2017Euros per Tonne
450
500
550
600
650
700
750
Q1‐2013
Q2‐2013
Q3‐2013
Q4‐2013
Q1‐2014
Q2‐2014
Q3‐2014
Q4‐2014
Q1‐2015
Q2‐2015
Q3‐2015
Q4‐2015
Q1‐2016
Q2‐2016
Q3‐2016
Q4‐2016
Q1‐2017
Q2‐2017
Q3‐2017
Q4‐2017
Feb 2018
Testliner 2, 140 g,Germany
UnbleachedKraftliner, 175 g+,Germany
Italy: Prices of Kraftliner Skyrocketed due to Higher Import PricesEuros per Tonne
300350400450500550600650700
Q1‐2013
Q2‐2013
Q3‐2013
Q4‐2013
Q1‐2014
Q2‐2014
Q3‐2014
Q4‐2014
Q1‐2015
Q2‐2015
Q3‐2015
Q4‐2015
Q1‐2016
Q2‐2016
Q3‐2016
Q4‐2016
Q1‐2017
Q2‐2017
Q3‐2017
Q4‐2017
Feb 2018
UnbleachedKraftliner, 175+ g,Italy
Testliner 2, 140 g,Italy
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Price Gap Between Kraftliner and Testliner IncreasesEuros per Tonne
0
50
100
150
200
250
Gap Between Kraftliner 175+ and Testliner 2
Italy Germany
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Variable Production Costs Will Rise for KraftlinerYear‐over‐Year Percentage Change
‐5%
‐3%
‐1%
1%
3%
5%
7%
2015 2016 2017 2018 2019
Kraftliner 175+ Testliner 2
Containerboard Demand Growth in Emerging Europe Will Accelerate in 2018‐2019
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5.5
6.5
7.5
8.5
9.5
10.5
11.5
12.5
13.5
2015 2016 2017 2018 2019
MILLION TONNES
Demand (APC) Production
5.5%
Conclusions
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80%82%84%86%88%90%92%94%96%98%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019
Western Europe Emerging Europe Far East Latin America North America
North American Operating Rates Should Remain High Through 2019And remain well above the rest of the world
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Take Home Points on Global Containerboard
• Elevated global demand growth will continue in 2018‐2019 Demand growth is solid in both emerging and developed markets
• Chinese policies are reshuffling trade flows in both PfR and recycled containerboard A lot of uncertainty surrounding China’s policies still exists
• Continued tighter supply/demand balances in virgin containerboard in the near term Higher operating rates in this segment
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For more information on RISI’s global paper packaging and containerboard coverage, visit www.risi.com.
Thank you!Questions?
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