Pulp Matters 2/2022

F IBRE PHENOMENA

Urbanisation and rising incomes have been driving tissue papers and other key segments in China already for several years.

C hina is the top pulp consuming country metric tonnes in 2021. However, unlike other major markets such as the US and Europe, China has a high import dependency on wood pulp due to the scarcity and uneven distribution of domestic forest resources. Ricky Wang , Pulp and Paper Analyst for analytics agency Sublime China Information (SCI), notes that China’s import dependence degree has been declining from 67% in 2017 to 57% in 2021 with local pulp and paper integration progress, uncertainties in 2020, unexpected overseas turnarounds and high-cost pressure from imported wood pulp. “In addition, compared with more mature markets, the degree of integration and concentration in China’s pulp and paper industry is comparatively low,” he says, adding that the capacity concentration ratio of the top four players in the Chinese tissue industry is only about 33% in 2022. “China’s paper players differ in terms of scale and capital strength, and their purchasing channels and strategies also vary,” Wang says. The vast majority of integration concerns mechanical pulp produced for packaging and somewhat also fine paper production, but only a few tissue mills have onsite BHK (Bleached Hardwood Kraft) pulp integration. A ccording to Wang, there has been higher health and hygiene consciousness among consumers in China due to the ongoing COVID pandemic – meaning, in essence, that product traits such as clean, safe and food grade become more appealing to consumers. in the world, with total wood pulp consumption reaching 46 million

Tom Wright, Managing Director, Hawkings Wright

Ricky Wang, Pulp and Paper Analyst, SCI

In addition to conventional products such as toilet paper, facial tissue and paper towels, tissue players in China have launched differentiated products such as wet toilet paper, lotion tissue, disinfecting wipes, and moisturising facial tissue to serve specialised demand under more specific consumption scenarios. “The overall demand for tissue will continue to rise with urbanisation and higher disposable income,” Wang says, while pointing out that factors such as demand differentiation and economic deceleration will cause a divergence in tissue mills’ business strategies.

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PUL P MAT TERS 02/2022