NZ’s paper imports lift: its all about ‘woodfree’ grades

New Zealand’s imports of printing and communication papers lifted 6.3% in the September quarter, to total 32,325 tonnes. However, the rise came after the June quarter saw the lowest ever quarterly imports (30,410 tonnes). The result meant the September quarter’s imports were 20% lower than the September quarter of 2018 (40,476 tonnes).

Quarterly imports of Uncoated Mechanical grades rose almost 60% in the September quarter, they totalled just 1,587 tonnes for the quarter, reaching their highest quarterly total in two years. While those imports added to the rise in total imports, the significant lift was recorded for the Uncoated Woodfree grades (including Cut Reams). Imports lifted almost 26% to 17,272 tonnes.

Coated Woodfree grade imports plunged in the September quarter, falling 18.7% and recording their lowest ever quarterly total, reaching just 4,763 tonnes. Coated Mechanical grade imports fell11.4% in the quarter, slipping down to 8,703 tonnes.

In all, the September quarter was very patchy for New Zealand’s printing and communication papers. Because there is no domestic production, imports represent the total market and there is an immediacy to their application in the market. The chart below shows the import experiences since the March quarter in 2015.

 

New Zealand Imports of Printing & Communication Papers by Grade: MQ’15 – SQ’19 (tonnes)

Source: Statistics NZ

 

The table below sows this data on an annualised basis.

 

 

YE Sept ’18

YE Sept ’19

% Change

UCWF

60,693

63,136

4.0%

CWF

38,620

30,205

-21.8%

UCM

4,790

4,697

-1.9%

CM

42,092

41,960

-0.3%

Total

146,196

139,999

-4.2%

Source: Statistics NZ

 

The second chart shows the average price of imports.

 

New Zealand Imports of Printing & Communication Papers by Grade: MQ’15 – SQ’19 (NZDFob/t)

Source: Statistics NZ

 

NZDFob/t

SQ’18

SQ’19

% Change

UCWF

1,377

1,177

-14.6%

CWF

1,496

1,486

-0.6%

UCM

1,076

979

-9.1%

CM

1,018

1,106

8.6%

 

It can be seen that where the average price of Coated Woodfree grades has fallen a modest 0.6% over the last year, the average price of Uncoated Woodfree grades has declined 14.6% over the same period. The differential between the two grades is a large 21% or NZD309/t. That is clearly sufficient to drive substitution.

Some will say immediately that the observable and dramatic decline in the import price of Uncoated Woodfree grades has led to their increased influence. We think that is a reasonable starting point, but not the end of the matter. IndustryEdge understands that the influence of major producers in Asia (especially China) has assisted the price of Uncoated Woodfree grades to fall.

 

This an edited extract of an item that first appeared in Edition 171 of Pulp & Paper Edge (December 2019).

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