Australia’s total imports of paper and paperboard have slumped to their lowest volume in at least 30 years, according to the latest Pulp & Paper Edge report from IndustryEdge.
According to latest data, imports of Printing and Communications papers and Packaging & Industrial paper fell for the sixth consecutive year, totalling an estimated 1,069 kt in 2016-17, down 8.2 per cent on the prior year.
Printing and Communication paper imports are estimated to have fallen 12.5 percent over the year ended June 2017.
Digitisation in all its forms is clearly having an ongoing effect. All grades have experienced declines over both the medium term and over the last year.
Newsprint imports fell another 5.6 percent. The average annual rate of decline since 2011 has been a ‘very significant’ 16.1%.
However, as the chart below shows, the bulk of the decline was experienced in the year-ended June 2012. Since then, despite a continuing trend of decline, the rate of decline in imports of Newsprint has flattened out.
IndustryEdge notes that buyers are increasingly switching to cheaper paper grades.
Evidence of the ‘substitution effect’ is mounting, where print buyers switch to lower priced grades of paper for their declining printed communications expenditure.
As demand for printed communications diminishes, instead of ensuring their reduced printed communications are higher quality and have a bigger impact, some buyers are switching from one type of paper to another. Industry reports this is usually on the basis of cost.
From coated to uncoated, from woodfree to mechanical, to ever lighter basis weights, the substitution effect is a characteristic that implies that print is a cost, and that ignores its value and the potential value it can bring to a company or brand.
The news is not all bad, according to the industry bible.
Despite the aggregate decline – which is again substantial – imports of some grades have performed relatively well over the course of 2016-17. Imports of Packaging & Industrial papers for instance, have continued to grow, albeit marginally, reaching a third consecutive new record.
Local suppliers Australian Paper and Norske Skog have boosted their market share over the past year.
Australian Paper experienced observable improvements in its market share after the successful (to date) anti-dumping case on A4 copy paper, while Norske Skog has progressively won market share after it reintroduced local manufacturing of Light-Weight Coated mechanical papers.
IndustryEdge warns that the overall decline in imports is set to continue.
There is no prospect for recovery in consumption of Printing and Communication papers, and under stable conditions, imports are unlikely to reverse their course either. The prospect of a rising Australian Dollar – especially against the US Dollar – might result in increased imports, but for some grades, that is more likely to mean a slower rate of decline, rather than actual growth.
Full details of imports, as well as local production and relevant demand drivers, will be available in the 2017 Pulp & Paper Strategic Review.