Australia’s market for printing and communication paper grades continues to stumble as demand falls away from even the most resilient of paper grades: copy paper. The latest data shows this is a global experience, not a local event, but that does not make the journey easier to navigate, especially with supply lines being disrupted and changing constantly. Source: IndustryEdge
In 2023, Australia’s total consumption of printing and communication paper grades (including newsprint) fell 11.4% compared with the prior year, sliding to 680,000 tonnes. More than 88,000 tonnes of consumption evaporated for the year, feeding into total decadal losses of 962,000 tonnes.
As Figure 1 shows, declines in consumption have been continuous and brutal. However, there are other elements to consider. Not least is that in 2023, for the first time, production was less than imports. In fact, net local sales plunged to a record (at least 80 years) low of 41% of total supply.
Fig. 1: Australian Demand for Printing & Communication Papers: 2013 – 2023 (ktpa)
An annual average decline in demand of 8.4% over a decade is hard enough, but the supply chain has, for the most part, contended with that. Overseas mills, agents and merchants generally work closely to ensure supply and demand are balanced. Inventories are managed tightly and held at the right points in the supply chain – neither too far upstream or downstream – ensuring there are few gluts or shortages.
Market complexities are greater because there are several ‘main grades’ and of course, many variations, SKUs and brands on offer. Figure 2 shows 2023 demand for the main grades and the annual average rates of decline for each, over the last decade.
Fig. 2: Australian Demand for Printing & Communication Papers by Main Grade*: 2023 (ktpa & %)
Though of little comfort, it is relevant that Australia is not alone.
In 2022-23, as Figure 3 shows, European printing and communication paper demand slumped by massive margins, with the losses continuing throughout the second half of the year. By comparison, the Australian experience appears mild, for now.
Fig. 3: European Printing Paper Demand by Grade: FY June ’22 v FY June ’23 (‘000 tonnes & %)
The demand declines may seem common, but 2023 delivered a different experience. Production tumbled to be a smaller proportion of total supply than imports for the first time, because production of one of the main grades ceased in the early part of the year.
Under fibre supply constraints that seemed unresolvable, Opal ceased manufacturing Uncoated Woodfree paper grades, including copy paper, typically the most resilient of all grades.
As a result of that change, all Australia’s supplies of copy paper (and reels and sheets of the same grade) are imported.
Total supply was around 125,000 tonnes, with imports more than half. Imports leaped to a six-year high and will rise further to supply the total market.
The scramble for supply and for position in the Australian market – still a high-value supply point in the global market – saw the patterns of trade change dramatically. Freight costs increasingly dictate supply from Asia. Figure 4 makes clear that China (55%) and Indonesia (30%) are the dominant suppliers. We can anticipate Asian producers to supply greater than 80% of copy paper into the future.
Fig. 4: Australian Copy Paper Imports by Country: 2013 – 2023 (ktpa)
As the year ends and 2024 commences, a softening Australian economy is expected to shed more consumption, making competition more intense across the main grades, and between them. The supply chain can expect the main supply lines to continue to support the market with an offering that will be increasingly imported.
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