New Zealand’s printing paper demand: ‘just a little different’

Demonstrating once again that there is just a little something different about New Zealand, its apparent consumption of Printing & Communication papers rose 1.5% in 2018-19. Lifting by a little more than 2,000 tonnes, total imports rose to 148.1 kt. There is no local production, so imports represent total demand. The data does not include Newsprint.

The result sits in defiance of the experience of near neighbour Australia, but also, of most of the rest of the world’s advanced economies.

There were no really significant movements in the data, other than a near 1,000 tonne (18.0%) fall in imports of Uncoated Mechanical (UCM) grades. If there is significance in the data, it is that unlike Australia, the ‘Woodfree’ grades both saw imports increase over the year, despite the fact they are made from chemical pulp, the price of which rose so strongly in 2018.

The chart and table below provide the details of each of the main grades and total imports for the year.

 

Source: NZ Statistics

 

 

2017-18

2018-19

% Changes

Uncoated Woodfree

59,537

62,218

4.5%

Uncoated Mechanical

5,455

4,474

-18.0%

Coated Mechanical

43,638

44,331

1.6%

Coated Woodfree

37,267

37,042

-0.6%

Total

145,897

148,066

1.5%

 

For all that the annual import result is different to expectations, the chart accentuates a key point. At just 30.3 kt, total imports hit their lowest ebb in JQ’19, down 1.9% on the previous low recorded in JQ’18. It seems an historical artefact rather than a significant seasonal trend that the two lowest quarters were the June quarters of the last two years.

An importer to New Zealand provided background that their import patterns were largely unaffected by seasonal considerations, except the December quarter where they anticipate softness by mid-November.

 

Average prices mainly up over last year

Stable and growing consumption and imports came with rising prices, except for the Medium-Weight Coated (MWC) mechanical paper sub-grade. Over the last year, the average import price of 9.8 kt of MWC papers fell 12.3% to NZDFob1,189/tonne.

Unlike Australia, the average price for the major import grade – Uncoated Woodfree papers which includes copy paper – rose a modest 2.9%. Our importer contact advised that the rising price of Uncoated Mechanical papers saw substitution away from the grade. Increased imports and consumption of Light-Weight Coated mechanical papers were reportedly the winner from that scenario.

The chart below shows an index of the New Zealand price experience over the last decade. It shows that despite the increases recorded for some grades over the last year or more, all prices are significantly lower than they were a decade ago, without accounting for inflation.

To be explicit, the worst case is Light-Weight Coated (LWC) mechanical papers, the average import price of which is 41.4% lower than a decade ago. The best case is Coated woodfree (CWF) papers, where the average price is 8.1% lower over the same period.

 

Source: NZ Statistics

 

Detailed analysis of the New Zealand experience of all of these grades of paper is  included in the 2019 edition of the Pulp & Paper Strategic Review, which is now in development and will be delivered to subscribers in early October.

This is an edited extract from an item that first appeared in the August 2019 edition (Edition 167) of Pulp & Paper Edge.

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