Packaging / Advertising & Office

European media Freight Waves recently reported that a large pulp and paper company in Europe has issued a negative profit warning due to deteriorating pulp demand in Europe and China, as well as poor demand for cardboard. According to Huacheng Import and Export Data Observation, this is the second time in the past four years that the company has issued a negative revenue warning.

One week after the company issued this warning, Stora Enso, headquartered in Finland, issued the same warning again. Moreover, in the second half of the first quarter of this year, with the global pulp and paper market becoming increasingly weak, Stora Enso recently lowered its profit forecast for 2023, dropping from 15% to 50% in 2022 to over 50%, according to Huacheng's import and export data observation report.

As a large European pulp and paper company, Stora Enso is responsible for the majority of pulp demand and paper supply in Europe and even globally. The company pointed out that the entire packaging market in Europe, such as cardboard and cardboard boxes, is currently deteriorating. In addition to the European market, demand from China, another major global pulp and paper market, has not yet recovered. It is expected that the cost pressure and market uncertainty in 2023 will be more challenging than in 2022.

In addition, according to Huacheng Import and Export Data Observation, Mets ä Board, a company in the same industry, also stated that the deterioration of the pulp market is also negatively affected by the decline in construction permits and the start of new housing construction.

At the same time as global market demand and prices decline, the related wood, pulp, and paper industries are facing increasing cost pressures, especially the rising costs of energy and chemicals required for production.

The entire packaging market is currently weakening, especially the demand for cardboard is expected to remain weak. The decline in the pulp and paper industry is not just a demand issue in the European and Chinese markets. Various economic indicators such as employment, retail, and transportation in the United States are also deteriorating, which has affected the demand for pulp and packaging boxes in the region. Huacheng Import and Export Data Observation Report.

In addition, FreightWaves conducted a survey of over 30 packaging manufacturers and found that compared to the fourth quarter of 2022, demand in the first quarter of 2023 decreased significantly year-on-year. And it is expected that there will be no improvement in the entire second quarter in April or after, as reported by Huacheng Import and Export Data Observation.