RALEIGH, North Carolina, Oct. 23, 2019 -- The global supply for paper, currently estimated to be 95.5 MMT, is higher than the global demand, according to Beroe Inc., a procurement intelligence firm.
Global printing & writing paper demand are expected to decline by 2.2-2.9 percent until 2020. Global usage of digital media has enormously increased and driven down the growth of the global paper market. This deficit demand is a major cause of a global decline in the Paper Market, with the newsprint industry expected to decline at the CAGR of 4-5 percent.
The well-matured regions of North America and Europe are showing a decline of 3-4 percent, owing to the slow demand, closing of mills and consolidation. However, the emerging regions of Asia, LATAM, and MEA are showcasing a modest growth of 0-1 percent. LATAM is the only region where the supply of paper of 4.5 MMT is higher than the demand at 6.86 MMT. The demand for printing and writing paper in North America and Europe is expected to decline by 5 percent annually because of the rapid development of internet and e-commerce business models.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report - on its recently launched market intelligence platform Beroe LiVE:https://live.beroeinc.com/
The demands for paper from the major end-user segments are driving the growth of the market. Paper needs for purposes of direct marketing account for 32 percent of the total demand, followed by magazine publishing for 23 percent, home & office usage for 19 percent, newspapers for 19 percent, and books and directories for 7 percent. Constraints faced by the industry include order backlogs, different lead times, mill closures by manufacturers and changes in production capacity.
Recent low-cost innovations in sustainable paper and premium technological advancements are creating a new trend in the industry. Premium and high-quality papers are being developed to meet high print performance standards. Premium digital tough tear coated paper is replacing synthetic paper usage. Paper manufactured from grass without bleach and chemical usage is being used to manufacture packaging material. Eco-friendly certifications are gaining importance as high-performance paper.
- The cost of raw materials (pulp or OCC) is the key component that drives the cost of the final product for this industry as it constitutes about 60-65 percent of the total cost. The cost of procuring pulp also affects the cost of paper as it is different for different types of paper.
- The primary entry barrier to the industry is the intensive capital investment required. Also, the market is consolidated and the availability of basic raw material 'virgin pulp' is reducing with the reduction in foreign reserves.
- The main threat to the industry is rapid digitization. With the rise of technology and the evolution of smartphones, the demand for P&W paper, office paper, and non-coated paper is declining.
- High-end printing requirements for magazines and brochures are still sustaining the demand for white coated paper.
- Contract duration in the paper market is usually 1-2 years. The general payment period is 60 days or 90 days. However, as the buyers buy in bulk quantities and have a consolidated purchase model, the payment period of 120 days is successful as well.
The research methodology adopted for the report included:
- Experts with twenty years of domain experience
- Interaction with buyers
- Inputs from supply chain partners
The key index for price determination in the paper industry is determined by Fastmarkets RISI, EUWID, American Forest and Paper Association (AF&PA), and Fastmarkets FOEX. As compared to Asia and LATAM, the labor costs are high in North America and Europe. Apart from the cost of the raw material, utility costs like electricity, maintenance, and fuel also directly impact the cost of production.
The report includes:
- Value Chain
- Global Paper Market Analysis
- Global Paper Industry Trends
- Paper Price Drivers
- Regional Paper Market Analysis: North America
- Regional Paper Market Analysis: Europe
- Regional Paper Market Analysis: Asia
- Regional Paper Market Analysis: LATAM
Key Regional Supplier Profile
- North America
Innovations in Paper
- Recent Global Innovations in Graphic Papers – Innovations by Verso, UPM, Mondi, Kruger, Nippon Paper, Appleton coated, Arjowiggins and Volga
About Beroe Inc
Beroe's unique business model involves providing market intelligence and analytics to the procurement teams of businesses across the globe. Beroe leverages its deep domain expertise in 300 + categories across 14 industries. It boasts of more than 80 of the Fortune 500 companies as its clients.
To learn more about Beroe Inc, please visithttps://www.beroeinc.com