State of the Industry: 2023 Paper Market

December 05, 2023

While inflation, supply and the COVID-19 rebound were some key factors affecting the paper industry last year, this year looked a little different. In a recent report, Fastmarkets provided insight on the current state of the paper industry and what happened throughout 2023. Capacity, inventories and market demand were some of the key factors impacting the industry in 2023.

Mill Capacity

This year, North American printing and writing mills ran at 77% capacity, and as of August, inventory levels reached 848,000 tons—an increase of 15% compared to the same period last year, as reported by the Pulp and Paper Products Council (PPPC). Contrastingly, during the January-August timeframe in 2022, mill operating rates were 96%. This discrepancy was attributed to customers engaging in extensive panic-buying post-pandemic, leading to excessive paper purchases and the subsequent accumulation of substantial inventory.

Overstocked Paper Buyers

According to Fastmarkets’ PPI Pulp & Paper Week, the majority of paper merchants and certain printers have depleted a significant portion of their inventories and have resumed ordering paper. However, some still find themselves holding excess stock.

Market Demand

According to PPPC data, the demand for printing and writing paper during the initial eight months of 2023 witnessed a 26.5% decline compared to the same period in 2022. Shipments from mills to domestic markets experienced a 25.4% decrease, while exports saw a 4.2% drop during this timeframe. Additionally, paper imports registered a notable decrease of 32.4% in the same period.

After several volatile years and a continually evolving world, 2024 is sure to bring new challenges and trends to the paper industry!

Source: https://www.fastmarkets.com/insights/printing-and-writing-paper-destocking-in-north-america-continues-pricing-pressure/

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