Global pulp and paper producers have no plans for a significant increase of their output and exports next year, due to a generally weak demand, caused by the pandemic and associated with this negative economic consequences.
As Zakhar Smushkin, a co-owner of the Ilim group, one of the world’s largest pulp and paper producers from Russia told in an interview with the Russian Kommersant business paper, «there is a need to produce only those products that can be sold, the demand for which is expected to be stable”.
Zakhar Smushkin comments:
«For example, at present we cannot ship hardwood pulp to China, as a huge volume of such products comes to this market from Brazil, Chile and Indonesia. These producers have serious competitive advantages, because in these countries, genetic intervention in their wood sectors is currently allowed. In 8-10 years they grow a new tree, which generally grows for 100 years.
According to Smushkin, at present most of major pulp and paper markets are balanced or experience a stagnation. That means they do not expect any shortage of raw materials for the production of paper products in the short term. Moreover, according to him, the consumption is constantly shrinking, while the number of producers still grows.
That leads to a further tighthening of competition in the market.
Zakhar Smushkin says «We see a fall of 40% in the newsprint market, for white offset and office paper we estimate a decline of at least 10-15%. It is necessary to think about new types of products and markets, and to increase domestic consumption».
By: Eugen Gerden