Global Containerboard Outlook
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Gleb Sinavskis, Economist, European Paper Packaging
1
Asia
North America
Europe
Conclusion
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Asia (Far East)
Chinese containerboard production goes down
2019 | Fastmarkets | Global Containerboard Outlook March 2019 4
-3,000
-2,500
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
2,500
2015 2016 2017 2018 2019 2020
China Other Asia
Net imports in China will grow, Other Asia to fill a big part of the gap
-2,000
-1,800
-1,600
-1,400
-1,200
-1,000
-800
-600
-400
-200
0
2017 2018 2019 2020
China
Virgin Recycled0
200
400
600
800
1,000
1,200
2017 2018 2019 2020
Other Asia
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Chinese apparent consumption dragging the whole region down
2019 | Fastmarkets | Global Containerboard Outlook March 2019 6
-3.5%
-2.5%
-1.5%
-0.5%
0.5%
1.5%
2.5%
3.5%
4.5%
5.5%
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
2015 2016 2017 2018 2019 2020
China Other Asia Total Asian APC growth, %
Chinese prices were declining in the second half of 2018
300
400
500
600
700
800
900
1,000
1,100
Kraft top, East China 170 g Testliner, East China 140 g Corrugated medium, East China 120 g
2019 | Fastmarkets | Global Containerboard Outlook March 2019
North America
2019 | Fastmarkets | Global Packaging Outlook March 2019
North American capacity is growing faster than demand
2019 | Fastmarkets | Global Containerboard Outlook March 2019 10
0
200
400
600
800
1,000
1,200
1,400
1,600
2015 2016 2017 2018 2019 2020
Demand Capacity
Net exports from North America will rise
2019 | Fastmarkets | Global Containerboard Outlook March 2019 11
-200
-100
0
100
200
300
400
500
600
700
800
2015 2016 2017 2018 2019 2020
Recycled Virgin
The gap between US domestic and export price to Southern Europe is increasing again
300
400
500
600
700
800
900
Aug
2010
Oct
201
0D
ec 2
010
Feb
2011
Apr 2
011
Jun
2011
Aug
2011
Oct
201
1D
ec 2
011
Feb
2012
Apr 2
012
Jun
2012
Aug
2012
Oct
201
2D
ec 2
012
Feb
2013
Apr 2
013
Jun
2013
Aug
2013
Oct
201
3D
ec 2
013
Feb
2014
Apr 2
014
Jun
2014
Aug
2014
Oct
201
4D
ec 2
014
Feb
2015
Apr 2
015
Jun
2015
Aug
2015
Oct
201
5D
ec 2
015
Feb
2016
Apr 2
016
Jun
2016
Aug
2016
Oct
201
6D
ec 2
016
Feb
2017
Apr 2
017
Jun
2017
Aug
2017
Oct
201
7D
ec 2
017
Feb
2018
Apr 2
018
Jun
2018
Aug
2018
Oct
201
8D
ec 2
018
Feb
2019
US East domestic price Export to Southern Europe
2019 | Fastmarkets | Global Containerboard Outlook March 2019
The gap between US domestic and export price to Southern Europe increased again
Apr 2
009
Jul 2
009
Oct
200
9Ja
n 20
10Ap
r 201
0Ju
l 201
0O
ct 2
010
Jan
2011
Apr 2
011
Jul 2
011
Oct
201
1Ja
n 20
12Ap
r 201
2Ju
l 201
2O
ct 2
012
Jan
2013
Apr 2
013
Jul 2
013
Oct
201
3Ja
n 20
14Ap
r 201
4Ju
l 201
4O
ct 2
014
Jan
2015
Apr 2
015
Jul 2
015
Oct
201
5Ja
n 20
16Ap
r 201
6Ju
l 201
6O
ct 2
016
Jan
2017
Apr 2
017
Jul 2
017
Oct
201
7Ja
n 20
18Ap
r 201
8Ju
l 201
8O
ct 2
018
Jan
2019
-300
-200
-100
0
100
200
300
2019 | Fastmarkets | Global Containerboard Outlook March 2019
What export price is too low for US mills?
2019 | Fastmarkets | Global Containerboard Outlook March 2019
There is still some room between North American export prices in Europe and North American mill cash costs
2019 | Fastmarkets | Global Containerboard Outlook March 2019
European kraftliner capacity is competitive versus North America when taking transportation into account
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Europe
Supply is outpacing demand in Western Europe
2019 | Fastmarkets | Global Containerboard Outlook March 2019 18
3.9%
1.7%1.5%
1.2%
0
200
400
600
800
1,000
1,200
2015 2016 2017 2018 2019 2020
Demand Capacity
Kraftliner demand will slowly grow due to imports; capacity will stay fairly stable until late 2020
-100
-50
0
50
100
150
200
250
300
2015 2016 2017 2018 2019 2020
Demand Capacity
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Recycled containerboard is expecting a lot of capacity; will projects actually happen?
0
200
400
600
800
1,000
1,200
2015 2016 2017 2018 2019 2020Demand Capacity
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Many projects in the pipeline in Western Europe
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Company Location Country Capacity Year Quarter Grade
Heinzel Laakirchen Mill Austria 450 2017 4 Recycled
Leipa Schwedt Mill Germany 450 2018 2 White top and brown recycled
Burgo Avezzano Mill Italy 200 2018 2 Recycled
International Paper Madrid Mill Spain 380 2018 3 Recycled
Pro-Gest Mantova Mill Italy 400 2019 Recycled
Burgo Verzuolo Mill Italy 600 2019 4 Recycled
DS Smith Porcari Italy 460 Recycled
Cartiere del Polesine Adria Italy 315 Recycled
Hamburger Spremberg Germany 500 2020 H2 Recycled
Progroup Sandersdorf-Brehna Germany 750 2020 H2 Recycled
Emerging Europe has a lot of projects as well
2019 | Fastmarkets | Global Packaging Outlook March 2019
Company Location Country Capacity Year Quarter Grade
Varaka Kagit (Albayrak Group) Balikesir Turkey 300 2019 1 Recycled
OBF Sokol Russia 162 2019 2 RecycledArkhangelsk Novodvinsk Russia 80-90 2019 2 Kraftliner
L-Pack Lipetsk Russia 180 2019 2 Recycled
Schumacher Myszkow Poland 250-300 2019 3 Recycled
Kipas Kagit Söke Turkey 720 2019 4Virgin and recycled cartonboard and white linerboard
Ilim Group Bratsk Russia 100 2019-2020 Kraftliner
Bukoza Hencovce Slovakia 70 2019-2020 White top kraft top testliner
Mondi Ruzomberok Slovakia 300 2020 H2 White top kraft top testliner
Hamburger Kutahya Turkey 480 2020-21 Recycled
Kipas Kagit Söke Turkey 480 2020-21 Recycled
2019 | Fastmarkets | Global Packaging Outlook March 2019
High-cost recycled liner machines have cash costs of about €300/tonne
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Conclusions
World containerboard capacity is outpacing demand
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2015 2016 2017 2018 2019 2020Demand Capacity
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Global containerboard summary
By 5.4 million tonnes
• CAPACITY WILL OUTPACE DEMAND GLOBALLY IN THE NEAR TERM
• MORE GLOBAL KRAFTLINER SUPPLY AVAILABLE GOING FORWARD
• EUROPEAN CONTAINERBOARD DEMAND GROWTH WILL DECELERATE IN 2019-2020
Global containerboard capacity will outpace demand in the next two years
2019 | Fastmarkets | Global Containerboard Outlook March 2019
Thank you!