Packaging / Advertising & Office

After experiencing several turbulent years, unforeseeable global events and energy prices have impacted the cost and demand of cardboard, and we see market restructuring and the possibility of resuming growth. However, there are still some challenges and uncertainties. The following will provide an overview of the current development status and possible directions of the cardboard market.

Global cardboard may slowly rebound in 2023

According to import and export data, 2021 is a positive period for global demand for cardboard, reaching a total of 192 million tons, with Asia accounting for more than half of this figure (95 million tons). China accounts for 62% (or 59 million tons) of total demand in Asia, highlighting its dominant position in the region and global markets. According to import and export data, in 2021, we also witnessed a surge in global demand for cardboard after the pandemic (6.4%), due to a general rebound in the economy and an increase in commodity procurement, especially online procurement.

However, according to import and export data, by 2022, this number had decreased by 1% as spending shifted back towards services and the economy was hit by inflation. This year also witnessed the impact of a new wave of epidemic lockdowns on the massive Chinese market, which has damaged commercial activities in the region.

Fastmarkets predicts that global demand will rebound (with a 2% increase in demand) in 2023, driven by China and other regions in Asia, but growth in Europe and North America will be slow. However, next year (2024), we expect Europe and North America to recover faster, and China will continue to lead the global pace. We expect global demand for cardboard to grow by an overall 4%.

Global demand for cardboard may resume stable growth

The global oversupply of cardboard may become a problem in the short term. There are several factors that may lead to a global oversupply of cardboard, which may hinder short-term recovery.

According to import and export data, in recent years, demand has lagged behind production capacity due to unforeseen global challenges (Ukraine conflict, COVID-19 epidemic, inflation). The result is a decrease in operating rates, from 90% to nearly 80%.

At the same time, we will see significant investments in Asia and a wave of capacity expansion in Europe and North America from 2023 to 2024. For example, paper and packaging manufacturer Mengdi announced in 2022 that it will invest 280 million euros to expand production capacity throughout Europe.

The decrease in demand, coupled with investment in production capacity, may lead to oversupply. Import and export data shows that this may become a real problem in most major global markets in the near future and have a negative impact on prices.

The recovery of demand for European cardboard needs to occur quickly

The demand for cardboard in Europe in 2022 is particularly challenging. Fastmarkets estimates that the demand in Western Europe fell by more than 3% last year. Due to the increase in manufacturing costs, Balance of trade declined. Compared with other export regions, this has a particularly serious impact on Europe. It is expected that there will be a soft recovery this year, with demand slightly increasing by 0.2%, followed by a growth of 3.2% in 2024.

However, the recovery of European demand needs to occur quickly in 2023, so that the consumption of corrugated paper and cardboard can begin to grow compared to the previous year this year. If demand remains low for a long time, we may see demand decline for the second consecutive year and growth will slow down in the coming years.

The cost of imitating cow cards is unknown

When we look at the European boxboard market, the price of imitation kraft linerboard and the Energy crisis have always been important factors in the overall cost of producing this material. Due to high operating rates, rapid increase in production costs, and sustained demand for cardboard, the prices of imitation kraft cards in Europe have continued to rise since the fourth quarter of 2020.

Natural gas is a key cost factor for imitation Niuka, as the factories that produce it heavily rely on natural gas. Therefore, when energy prices are affected, their manufacturing costs will face significant changes. This year, we predict that European energy prices and test liner prices are expected to be more stable, but there are still doubts about the impact of the upcoming winter. (Translated from: Global Printing and Packaging Industry)