INSIGHT: Australian corrugated market lifted 3.3% in 2020-21

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Latest analysis shows Australia’s consumption of corrugated packaging paper lifted 3.3% to a new record 1.443 million tonnes in 2020-21.  Demand increased a total 45,000 tonnes, headlined by Kraftliner consumption which rose to an all time high of 555,000 tonnes.

The solid lift in demand confirms the dominance of corrugated packaging in Australia. IndustryEdge’s analysis – to be published in the 2021 edition of the Pulp & Paper Strategic Review in the next two weeks – demonstrates that in the most recent year, corrugated packaging accounted for 82% of total packaging paper consumption. Corrugated box demand has been growing for business-to-business transactions as manufacturers and brand owners seek sustainable solutions, but has also expanded as the business-to-consumer delivery market has continued its rapid expansion, including as a result of the global pandemic.

 

Australian Containerboard Consumption by Grade: 2011 – 2021 (‘000 tonnes)

Source: ABS, derived & IndustryEdge

 

In Australia, corrugated packaging is almost entirely supplied by local production – supplemented by supplies from New Zealand. Inevitably, production has been ramping up over recent years, as demand has increased.

Managing Director of IndustryEdge, Tim Woods, commented:

“At a production level, the sector appears to be operating right at its capacity limits. Production of container materials totalled 2.132 million tonnes in the last year. That is a nominal operating rate of 93.3%, so there is not much room left for further production growth.”

While production is toward its outer limits, the manufacturers have been very successful – stunningly so in many respects – in establishing robust and valuable export markets for containerboard grades. As a result, the latest data shows exports accounted for 37% of total production.

Tim Woods says:

“Exports provide capacity to increase local supply of course, but for the most part, those export markets are quite valuable and represent a high-quality diversification. It may be hard to grasp, but Australian Kraftliner and the recycled corrugated packaging grades were delivered to over eighty countries just last year.”

Full details of production, trade and demand for corrugated packaging materials can be found in the 2021 edition of the Pulp & Paper Strategic Review. To learn more, click here.

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