GLOBAL - Despite declining demand for sack kraft and wrapping paper in many developed countries, global demand is expected to increase by 504,000 tonnes in 2014.
These and other findings were recently released in a new study by RISI.
Global demand for sack kraft and wrapping papers increased 1.5% during 2012 alone to reach an estimated 15 million tonnes. However, in the majority of developed countries, demand for wrapping paper declined or stagnated during the last decade.
North America, for example, saw sack kraft and wrapping consumption decline at a 3.4% average annual rate from 2003-2012, while demand in Western Europe held up relatively well increasing approximately 1.3% annually from 2003-2007, before declining at a 1.7% average annual rate through 2012.
On the other hand, emerging markets Asia, Middle East and Africa sustained 4.4% average annual growth in wrapping demand over the past decade, and wrapping consumption in these developing economies is expected to continue to increase as disposable incomes grow – essentially helping to support growth in global wrapping demand even as stagnant consumption patterns continue in the developed markets.
China’s demand grows
With its demand increasing at an average annual rate of 7.6% over the last decade, Chinese demand for wrapping papers hit an estimated 4.7 million tonnes in 2012 - about 30% of global consumption.
During that same decade, Chinese producers added about 250,000 tonnes of new kraft and wrapping capacity annually. Capacity expansions were carefully planned and China reduced imports of kraft and wrapping papers from approximately 500,000 tonnes in 2002 to just 250,000 tons in 2012.
The study noted though that Chinese net imports of unbleached sack kraft has more than quadrupled in the last seven years.
"Chinese net imports of unbleached sack kraft have increased dramatically over the past decade from just 10,000 tonnes in 2005 to 48,000 tonnes in 2012-2013,” said Ken Waghorne, Vice President of Packaging Papers at RISI.
“Although China has maintained a growing domestic supply, they will continue to rely on foreign imports for high quality virgin kraft papers produced in Western Europe.”
Waghorne also noted that demand growth from other Asian markets is expected to eclipse that of China’s between now until 2019.
“We also anticipate that demand growth in India, Indonesia, South Korea and Taiwan will exceed China's 3.2% growth rate over the next five years," he added.