Demand for Australian produced paper jumped more than 12 per cent in the past year – “underscoring the potential of fibre packaging in the era of the Asian food bowl.”
“Driven by strong growth in demand for corrugated boxes, consumption totalled more than 1.5 million tonnes for only the third year in history, according to the 2016 Pulp and Paper Strategic Review from market consultant Industry Edge.
Australia's consumption of packaging & industrial papers rose a very large 12.1% in 2015-16, compared with the prior year.
Most of the rise in apparent consumption was fuelled by expanded national production.
Production rose six per cent over the year, while exports declined two per cent and imports increased eight per cent. Domestic production accounted for 79% of total demand, down from 82.5% a decade ago.
Industry Edge MD Tim Woods says the jump has been driven in part by the demand for corrugated boxes used in food production.
“12 per cent is something close to 165,000 tonnes in additional demand over the course of the year,” says Woods. “It’s a very big lift for a single year but it’s not a record year. Various factors over the past decade have moved around the consumption levels and overall they had gone down a little but this past year has seen a recovery to close to the levels of about ten years ago.
“While it’s certainly a big one-year rise, what’s also clear is that this can include inventory effect over a single-year period. It’s also likely to be a lift to a new plateau, recognising that this level of consumption is actually below the peak reached almost a decade ago,” Woods says.
“What we think this demonstrates is that the domestic industry is pretty close to its optimal production capacity, which raises questions about future investment in the sector.”