Pulp market
Megatrends continue to drive pulp demand
MATTI REMES
Although economic uncertainty is casting a shadow on the market, the underlying megatrends will continue to boost long-term demand for multi-purpose, responsibly produced pulp.
grow by 1–3 per cent annually up to 2035. Amberla says this estimate still holds true. Oliver Lansdell , director of the consultancy company Hawkins Wright, says a key driver of pulp market growth is the increasing consumption of tissue paper, particularly in emerging markets. Most tissue is made from market pulp. “We expect the demand for tissue paper to grow by 2–3 per cent per year in the long term,” he estimates. Megatrends underpin growing demand The growing consumption of tissue paper is fundamentally linked to megatrends such as urbanisation and increasing consumer pur- chasing power, which continue to gain momentum, particularly in emerging economies. “Global megatrends are underpinning basic pulp demand growth, as the use of both packaging paperboard and tissue pa- per products is increasing. These will provide a solid basis for demand growth in the long term. Of course, there will continue to be cyclical fluctuations between years,” says Amberla. A good example of growing product categories are hygiene products made of tissue, such as toilet paper, and paper hand towels and handkerchiefs. Meanwhile, the demand for pulp-based paperboard and other packaging materials is growing as living standards in emerging econ-
During 2022, expectations for global economic growth have de- clined as the dark clouds of accelerating inflation, rising interest rates and the Russian invasion of Ukraine gather on the horizon. This also has both direct and indirect effects on global pulp markets. “Short-term turbulence is possible in the pulp markets,” says John Litvay , partner at the consultancy company Brian McClay & Associates (BMA). BMA has reduced its estimate for pulp market growth in 2022 and 2023 amid forecasts for declining global economic growth. Consumption growth is expected to be 1.7 per cent annually. Tomi Amberla , director of AFRY Management Consulting, also sees the short-term outlook as more challenging than be- fore. Inflation, slowing economic growth and the global political situation could reduce the demand for pulp. “Pulp demand varies from year to year. It is greatly affected by general economic development,” he points out. Steady long-term growth However, experts say that the long-term growth outlook for the pulp market has not changed. “We expect the demand for pulp to grow at an average annual rate of 2.5 per cent over the next 10–20 years,” says Litvay. In a study conducted for the Finnish Forest Industries Feder- ation last year, AFRY estimated that the global pulp market will
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