SEPTEMBER 2009

RISI’s 15-year paper outlook shows shrinking demand

RISI, an information provider for the global forest products industry, released the first of its annual set of 15-year forecasts. Reports provide key data and analysis on end-use market growth, supply/demand balance, price forecasts, capacity removals, competitive costs and trade throughout both newsprint and printing and writing paper markets for Europe, North America, Asia and Latin America.

North America

According to John Maine, vice president of RISI Graphic Papers, “Aggregate paper demand is the lowest seen since the mid 1980s. The current recession represents an acceleration of a predominately structural decline that started post 2001. In the case of printing and writing papers, 24 years of growth have been wiped out in less than 2 years. The market will average 2 percent declines through 2024, at which point we predict the market will have contracted an additional 18 percent from today’s levels.”

Maine continued, “Newsprint will decline at least 5 percent per year, as major publishers continue the loss of circulation and advertising dollars while reshaping, reformatting and redefining the daily newspaper to be less than daily.”

Europe

Sampo Timonen, director of RISI European Graphic Papers said, “We forecast that in every paper and newsprint grade and in every major end use, the West European demand in 2024 will be less than that in 2009. Western European graphic paper in 2024 is expected to be 20 percent less than 2009 levels, thus representing 6.6 million metric tonnes of loss. Eastern European markets will be increasing, but will not reach the per capita usage levels of Western Europe until after 2024.

“Additionally, the low cost producers in Asia have been increasing their exports when their domestic demand has fallen, thus displacing further European producers. This trend is questionable in the future, but certainly Europe will be losing its role as an export producer.”

Asia

“China is the dominant paper growth story in the world,” said Sandy Lu, economist for RISI Asia Graphic Papers.

She continued, “Having eclipsed the United States as the world’s largest producer of paper in 2008, the trend looks to continue. However, we predict that within the forecast period consumers and advertisers will focus more on the Internet and the growth story will moderate. This represents a significant development that is not currently occurring in China, but we believe will start to develop shortly.”