Demand for printing and communication papers plummeted over the past year, signalling rough times ahead for the commercial printing industry.
Not counting the continuing disastrous drop in newsprint, overall demand for printing paper dropped by 6.2 percent (73,400 tonnes) in 2015-2016, according to industry bible
Pulp & Paper Edge's 2016 Strategic Review.
Most of this decline came in sectors and paper grades that are the exclusive domain of commercial printers. Demand for directory and lower-quality catalogue paper (uncoated mechanical) collapsed by almost ten percent over the year; there was also a stark 26 percent crash in demand for uncoated woodfree reels and sheets. The fall was more modest among higher-quality coated woodfree papers, which still experienced a six percent drop over the same period.
"It’s little wonder that there are businesses in the sector considering rationalisation – by merger or acquisition – right now, given the outlook indicated by this data. Concerns about capacity utilisation are clearly legitimised by this latest information," said industry guru Tim Woods, of
Pulp & Paper Edge.
The doom and gloom is slightly lessened by increased demand for higher-quality coated mechanical papers used in catalogues and magazines, which rose by 0.8 percent to 376,000 tonnes in 2015-16 - a new record.
"If there is any good news in this data, it’s that the advertising spend represented in catalogues and some other forms of brochures and printed media held up more strongly over the last financial year than we would have anticipated. We’ve also seen relatively sharp declines in the value of imports of printed media in recent months, which might suggest that domestic printers are at least able to hold off the import competition that they’ve faced in the last few years," Woods said.
Woods attributes the decline in paper demand to several factors, including a shift to in-home and in-office printing - demand for copy paper (uncoated wood-free cut reams) has fallen just 1.7 percent per annum over the past decade, compared with an average 5.4 percent decline per annum for lighter weight reels and sheets used in commercial printing. He believes that the heart of the problem, however, is a drop in demand for all forms of printed media.
"It’s the same story, told in any different way – it’s the decline in the use of printed media in favour of digital media," he said.
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