Alex He, economist Asia Paper Packaging, said: "China containerboard consumption will grow at 6.6 per cent annually during our forecast period, reaching almost 84m tones by the end of 2024. China containerboard capacity will also see continued growth, with an annual increase averaging 6.3% from 2010-2024.”
But China, and other Asian markets are expected to be relatively small net exporters of recycled containerboard during this period, he added.
The growth of Asian boxboard consumption is expected to favour virgin grades as the region’s growing middle classes buy more high-quality packaged products. New capacity from China is also predicted to focus on the virgin grades.
Meanwhile, in Europe containerboard demand is forecast to grow by 4 per cent up to 2024 and by 1.4 per cent in North America.
Recovered paper prices
Orifjon Abidov, RISI economist European Paper Packaging Service said: “Despite their environmentally friendly image, recycled grades are expected to lose market share in the western European cartonboard market, as recycled board prices will rise relative to virgin grades. This price escalation will be due to relentless upward pressure on real recovered paper prices."
Continued volatility in recovered paper markets is expected to create high variability in containerboard prices, he said. “Testliner expected to gain market share from kraftliner during weak market conditions and the opposite effect under tighter market conditions."
Despite the growth in European demand, limited investment in the Eastern Europe cartonboard capacity should result in net imports increasing by 60% compared with last year.
The construction of two new recycled containerboard mills in Eastern Europe is not expected to threaten the western European suppliers as the region is expected to continue to run substantial trade deficit, according to the report.
In North America, competition from alternative packaging products will continue to restrain domestic boxboard demand growth for the next 15 years with no more than 3% demand growth.
Ken Waghorne, vice president RISI Paper Packaging said: "The downward trend in the merchandise trade deficit will allow North American containerboard demand to grow 1.4% per year on average for the next 15 years, doubling the growth rate that was recorded during the last 15 years.”
US kraftliner exports are expected to grow solidly from 2010 to 2024, he added. This growth will result from steady Latin American demand growth, increased US competitiveness and an abundance of softwood fibre in the USA.
"Both kraft paper and boxboard markets in North America will remain flat over the length of the forecast as they face increased competition from alternative packaging options," said Waghorne.