Corrugated Base Paper Capacity to Increase 20% in Europe by 2019

 

According to a report this past week by The Packaging Portal, Farnborough, U.K., The European Association of Makers of Corrugated Base Papers, Cepi ContainerBoard (CCB), Brussels, Belgium, said that the European market for corrugated base papers was relatively balanced during the past three years. For the years 2016 and 2017, the association also assumes a balanced market. The outlook for the following years 2018 and 2019 is – according to the association – influenced by pessimism. Especially the new capacities announced by the press will have a substantial impact on the supply/demand relation.

 

The result of the published capacity increase could lead to a reduction of the utilization rate from approximately 93% in 2016 and 2017 to less than 87% in 2018 and 2019. As a consequence – despite a positive economic growth – a significant decline in earnings of the containerboard sector is expected.

It is not new, that with increasing paper demand new capacities will come on stream, however the industry now faces a phenomenon which has not appeared in the past: the conversion of graphic paper machines to those of corrugated base papers. This was the result of the successful conversion of a paper machine for newsprint into a plant for the production of (lightweight) base papers in France.

In the trade press, it was reported that some paper mills in Germany, the Netherlands, and Poland will be converting paper machines for graphic paper to machines for containerboard within the period 2015 – 2019. Further conversions are also being taken into consideration in Italy, Austria, and Spain. Adding up the officially announced 'conversion capacities' – more than 2.6 million additional tons of corrugated base papers based on recycled fibers can be expected in Europe.

 

On top of that, new paper machines have been ordered, which will also have their "startup" in the next three years. The trade press has reported that more than 1.5 million tons of new capacities will be the result of these new machines. The previously stated additional capacities of 5.4 million tons will become fully effective in the years 2018 and 2019, as a paper machine cannot reach its complete capacity within the first year of its construction.