Global Paper Supply Forecast for 2016

Posted February 18, 2016 in Pulp and Paper Industry by Elizabeth Tischer

 

In August 2015, analysts released information pertaining to the global paper and pulp industry for 2016. The initial data indicated that buyers should expect prices in the paper and the packaging markets to increase in a modest manner in 2016. For the past several years, prices have been low and predictable. Price hikes have only included single digits and oil prices have been unusually very low. Oil is considered to be a driver of finished and manufactured goods and directly impacts certain plastics and various resins that are used to create products in the paper and pulp industry. When oil prices are low, the products produced in the paper and pulp industry and other industries are typically low. If you have a vested interest in the global paper supply forecast for the year 2016, continue reading this conclusive report for more information.

 

Predictions for the Paper and Pulp Market

 

According to information obtained from the company IBIS World, price increases in the single-digits should be expected from now until the year 2018. Coated papers are expected to have a 1.5% increase while flexible packaging paper is expected to have an exceptionally high increase of 2.6%. These forecasts have been impacted by numerous factors. Examples include high levels of construction and a consistent improvement in the United States Economy. These two factors, alone, have greatly increased the demand of paper products. As various industries continue to require paper goods for their manufacturing and production processes, the price of paper would likely increase due to higher demands.

 

Key Markets in the Paper and Pulp Industry

 

For the purpose and intent of the information contained in this report in regard to the global paper supply forecast for the year 2016, we are going to include information pertaining to four unique key markets in the paper and pulp industry. These include the following:

 

  1. 1.     Coated Papers – The papers that are included in this paper and pulp key market include those that are typically used in labeling, shipping, packaging, printing, and publishing. Additionally, the boxes used for foods and beverages are considered to be coated paper products.
  2. 2.     Flexible Packaging Papers – The papers included in this key market are those that are composed of polyethylene, polyester, nylon, and polypropylene.
  3. 3.     Molded Fiber Papers for Packaging – The papers of this key market are composed from organic wood fibers. Products commonly created from these types of wood-based fibers are egg cartons, inserts for boxes, and trays that are designed to carry cups.
  4. 4.     Packaging and Paperboard Papers – This key market includes products that are created through the means of layered paper and include paper products that are bleached and even unbleached. Examples include paperboard, packaging paper, boxboard, fiberboard, containerboard, and finished packaging supplies.

 

Coated Papers Analysis

 

Currently, products that fall under the coated papers market are averaging $1,378.00 per ton; however, prices have fluctuated between as low as $1,000.00 per ton to $1,600.00 per ton. Since the year of 2013, the prices of coated paper products have increased, annually, at a rate of 1%. The demand for these products is consistently increasing because of the fact that consumers are spending more money and more construction activities are taking place throughout the United States. The prices for the coated papers market are, ultimately, driven by the type of paper that is being used as well as the finished volume that directly relates to the size of the products and the type of coating used on the products. Discounts are very rare because the margins that suppliers possess are exceptionally thin. To get the best prices on coated paper products, buyers should opt for either bulk or sign a purchase contract on a long-term basis with a supplier.

 

Flexible Packaging Papers Analysis

 

In the year of 2015, the flexible packaging papers market had an average price of $142.87 for each 1,000 packages. This market has an annual price hike of just 1%. The prices of plastic and resins have a direct impact on this market. Since 2012, the prices of these materials have dropped nearly 2% annually. This has helped reduce the overall costs of products in the flexible packaging papers market. Other factors that will have an impact on the prices of products in this particular market in 2016 will include the size of the items created, the thickness of the products, if customization was required, and the type of sealant used. The food industry and the industrial production industry are the two main types of clients for this particular market.

 

Molded Fiber Papers for Packaging Analysis

 

The molded fiber papers for packaging market have averaged $67.57 for a total of 250 packages; however, the prices of the products within this market have increased at a rate of 2.2% annually since the year of 2012. Prices in 2016 are likely to increase, but, will also depend on several factors. These include the quality of the products used to create molder fiber papers for packaging, the size of the products, if customization is required, and the type of coating used. If higher-quality materials are required, such as wax for coatings or specially-designed plastics, the products will automatically command even higher prices. All products in this market are known to have a high level of sustainability and recyclability. The food industry and the produce industry are the two main industries that use these types of products.

 

Packaging and Paperboard Papers Analysis

 

The packaging and paperboard papers market averaged $625.00 for each ton in 2015; however, prices fluctuated drastically from as little as $590.00 per ton to $840.00 per ton. This particular market sees an increase of nearly 3% annually since the year of 2013. This increase is expected to continue into 2016. Paper grades, the size of the products, the coating used on the product, and the quantity needed all factor in when it comes to prices. This market has the highest level of price driver volatility of all markets and that will continue into the year of 2016. This is because of the energy costs, the costs related to the use of wood pulp, the chemicals required to make the products, and the recycled paper used. The best way to offset the volatility of this market is to opt for long-term contracts for purchases.

 

Conclusion

 

The global paper supply forecast for 2016 indicates that paper products will continue to be in high demand, but, the prices in all the key markets of the paper and pulp industry will increase only moderately. The only exception to this is the packaging and paperboard papers market. The prices of this particular market could prove to be exceptionally volatile; however, if a buyer would like to offset these price increases, they should opt for purchase contracts with suppliers. This often reduces the amount paid for the products. Each year, as the economy improves, construction projects continue, and industries continue to grow, there is likely to be single-digit price increases for products created in the paper and pulp industry.

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