FORECAST: Australian consumption faces uncertainty

Australia’s total consumption of all paper and paperboard will decline a calculated 0.2% (around 5,000 tonnes) per annum through to 2024, according to the latest headline forecasts* prepared by IndustryEdge.

In addition to the total consumption forecast, forecasts have been prepared for the two major grades. The headline forecast for Printing & Communication papers suggests there will be demand growth of 0.1% per annum, but with a potential volatility of up to 80% of current consumption levels. For Packaging & Industrial grades, the headline forecast is very different, suggesting a decline in 2019-20 of 5.1%, before annual increases of 0.5% per annum to 2024, with a volatility of only 19% of current consumption levels.

Many subscribers will know that IndustryEdge cautions wariness in the adoption and use of forecasts. To understand more, read the note at the end of this item*.

The forecast of total consumption inevitably ‘washes out’ the very different forecasts for the major grades of paper and paperboard. At 3,096 kt in 2018-19, Australia’s consumption of paper and paperboard recorded its lowest total consumption since IndustryEdge began collating data series.

Over the period to mid 2024, the forecasts suggest consumption will decline a modest 0.2% per annum, falling around 5.0 kt per annum to 3,071 kt. This is a modest decline, but one that is by no means set in stone, as the 95% confidence intervals indicate. They show that consumption could be in a range of 13.5% above or below that forecast by 2024, totalling as little as 2,655 kt and as much as 3,486 kt.

 

Forecast of Total Australian Paper & Paperboard Consumption: 1995 – 2024 (ktpa)

Source: IndustryEdge

 

* It should be noted that the total consumption forecast includes all grades of paper and paperboard, including Tissue, Newsprint, Printing & Communication and Packaging & Industrial paper but excluding all converted products.

The calculations are based on twenty-five years of prior consumption data, up to the year-ended June 2019. No external co-efficients have been used. The confidence intervals were set at 95%, meaning that in general, it can be expected the actual consumption has a 95% chance of falling between the Lower 5% and the Upper 5%.

The February 2020 edition of PPE will contain forecasts for the New Zealand industry.

 

For detailed analysis of major paper, paperboard and fibre supplies markets, contact IndustryEdge here.

This is an edited extract of an item that first appeared in Edition 172 of Pulp & Paper Edge, in January 2020.

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