February 10, 2016  
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China’s boxboard exports skyrocket and tap into critical demand growth markets

According to a recent RISI study, global boxboard demand has advanced by 2-3% annually on average since the early years of the last decade, which compares favorably to many other segments of the pulp and paper industry that are stagnant or in decline.

Despite the steady global demand gains, China’s boxboard industry has experienced unprecedented production growth over the last decade. Explosive capacity expansion reversed the nation’s former trade deficit of boxboard to a surplus that exceeded 1 million metric tons (tonnes) in 2014. Growing Chinese boxboard shipments to critical markets in Asia, Africa and the Middle East have proven disruptive to key virgin boxboard exporting regions like North America and Western Europe.

“On the supply side, China has risen as a major player in the global boxboard industry due to a tremendous build-out in boxboard capacity since 2002. Domestic demand growth has been strong, advancing 9% annually from 2002-2014, but this has lagged behind 12% production growth in this market over the same period,” said Dustin Jalbert, economist of packaging paper at RISI and the lead author on the World Boxboard Study.

“Investment has been particularly concentrated in virgin boxboard grades over the last five years—bolstering capacity of these grades. Chinese suppliers are capturing commodity boxboard markets in nearby regions, placing competitive pressures on North American and European virgin boxboard suppliers dependent on exports for continued growth. The glut of boxboard from China has understandably raised concerns over new European projects coming on line over the next two years and how this capacity will be absorbed into market,” continued Jalbert.

Companies included in the study were: Evergreen Packaging, Solidus, Shandong Huajin Paper, Shandong Zaozhuang Huarun Paper Co. Ltd., Zhejiang Yongtai, PaperWorks Industries, Shandong Bohui, USG Corp, Sonoco Products, Smurfit Kappa Group, Sichuan Yibin Paper, Zhejiang Zhengda Holding Group, Sun Paper, Jiangsu Longheng Paper Co. Ltd, Oji Paper, Moritz J. Weig, KleanNara, ITC, Klabin, Jiangyin Xinhao, Oji Materia, Metsä Board, International Paper, Hokuetsu Kishu Paper, Corenso, China Paper Corporation, Eska Graphic Board, Iggesund Paperboard, Clearwater Paper, Chenming Group, CMPC, DS Smith, Hansol Paper, Graphic Packaging International, Georgia-Pacific, and Asia Symbol.

In the study, Jalbert and other analysts provide an outlook for the global market over the next five years. The World Boxboard Study also includes grade-level demand, supply and trade analysis of the global cartonboard market.

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