Market outlook for wood-containing printing paper
MF Magazine was the only product group to see a rise in demand in Western Europe at the start of the year, but during the fourth quarter demand was down on the same period in the previous year. This resulted in a figure of 1.4 million tonnes for the full year 2011, representing no change compared with 2010.
For the full year 2011, exports to markets outside Western Europe were 7 per cent, or 30 000 tonnes, lower than in 2010, but exports account for only around 20 per cent of total MF Magazine deliveries.
Capacity utilisation for MF Magazine was 95 per cent in 2011, compared with 97 per cent in 2010. At the beginning of the year, very high utilisation rates were reported, but over the later quarters they were at more modest levels. Moreover, these figures are to be considered together with the utilisation rate for newsprint as well as for book and telephone directory paper, because many of these machines are swing machines, meaning that they can produce several of the grades.
Total deliveries of SC paper from Western Europe rose during the first three quarters of the year, but dropped back significantly in the fourth quarter, giving a 1 per cent reduction in deliveries over the full year. Deliveries to Western Europe fell by 4 per cent, or 135 000 tonnes, in 2011, although this was to a certain extent balanced out by a rise in exports of 6 per cent or 80 000 tonnes.
Out of the different SC grades, the main increase was seen in deliveries of SC-B (products with a recovered paper element and the lowest brightness), while SC-A+ (the brightest products) remained unchanged. Deliveries of the standard product SC-A fell by a sizeable 15 per cent in 2011, compared with 2010.
Capacity utilisation of 86 per cent in 2011 compares favourably with 85 per cent in 2010, but is still low. UPM’s announced capacity shutdowns will help to increase the utilisation rate next year, provided that demand is sustained.
Coated wood-containing paper
As with SC paper, Western European demand for coated wood-containing paper dropped in 2011 by almost 5 per cent, compared with 2010. Exports, however, increased by over 10 per cent, so total deliveries from Western European producers for the full year 2011 are only 1 per cent down on 2010. Here again, the year ended on a weak note, after positive growth in overall deliveries during the first three quarters.
The high grammage coated products (MWC) constitute around 20 per cent of the segment, and their deliveries fell, as did deliveries of the matte LWC products. Deliveries of the glossy LWC products, on the other hand, rose by a couple of per cent.
Capacity utilisation for coated paper was 88 per cent in 2011, exactly the same as in 2010. Capacity utilisation was somewhat better in the fourth quarter than in the first, due to capacity being shut down in the final quarter of the year.
Deliveries of wood-containing book paper fell by 4 per cent during the fourth quarter and over the full year, compared with the equivalent periods in 2010. At around 330 000 tonnes, demand in Western Europe mainly accounted for the drop, but exports also showed negative figures.
Since measurements started four years ago, 2011 has been the first year where we have seen demand for wood-containing book paper decrease. This type of paper is used primarily for paperback books, and we have not seen a reduction in demand for these, despite constant talk about the threat from e-books. However, publishers have become stricter about print runs and overruns are printed to a lesser extent than they once were, which reduces returns and also paper consumption. It is too early to say whether this is the whole explanation.
Demand for newsprint decreased this year in all parts of the world. For much of the year, Eastern Europe showed growth in demand, but that trend was broken during the fourth quarter. Chinese demand remains lower than in 2010, but during the fourth quarter was only around 10 per cent lower than the corresponding period in 2010, since demand had already started falling. Of the significant global markets, India alone saw a rise in demand, but only by a couple of per cent. Western European demand for newsprint was 3 per cent lower for the full year 2011 than it was in 2010.
Imports to Western Europe dropped by 3 per cent in 2011. The largest fall was in imports from North America, which were down around 50 000 tonnes, or 15 per cent, while imports from Eastern Europe rose by around 25 000 tonnes or 8 per cent.
Exports from Western Europe also decreased in all regions, and North America stands out here too with reduced exports of 70 per cent. A total of just 11 000 tonnes of newsprint were exported to the US in 2011.
Total newsprint deliveries from Western Europe decreased in 2011 by 300 000 tonnes, or 4 per cent, and capacity utilisation stood at 95 per cent, compared with 93 per cent in 2010, due to the closure of capacity during the year.
Telephone directory paper
Demand in Western Europe for telephone directory paper fell by 6 per cent in 2011, which is a smaller drop than in the past five years. Exports, on the other hand, increased by 1 per cent over the year, making total deliveries 4 per cent down on 2010. Deliveries of telephone directory paper were, however, weaker in the fourth quarter than in the previous three.
Western European capacity utilisation is measured for book and telephone directory paper combined, and amounted to 79 per cent for the full year 2011, compared with 75 per cent for 2010.