Chinese Dissolving Pulp Analysis for 2016-2020

 

According to a new report released this past week by the North American branch of China Market Research, Chicago, Ill, USA, China’s dissolving pulp capacity began exploding in 2011 and reached around 1.56 million tons at the end of 2015, making up 20.8% of the global total. However, recently, despite large dissolving pulp capacity in China, most of facilities have stopped production or shifted to paper pulp due to continued losses of dissolving pulp producers in recent years. Actual output of dissolving pulp was less than 200,000 tons in 2015.

Because of a shortage of forest resources, the Chinese dissolving pulp companies have been plagued with higher production costs and weaker competitiveness. During 2012-2015, due to sluggish demand for viscose staple fiber, dissolving pulp overcapacity, and impact of international low-cost dissolving pulp on the domestic market, the dissolving pulp sector in China almost suffered losses across the industry. With the implementation of the Chinese government’s anti-dumping rulings and gradual recovery of downstream viscose staple fiber industry, it is expected the country’s dissolving pulp sector will bottom out during 2016-2020 with output and apparent consumption of dissolving pulp amounting to 3.2 million tons and 3.184 million tons respectively in 2020.

The Chinese dissolving pulp market underwent great changes in competitive landscape in 2015, as the leading Sun Paper continued to significantly expand its dissolving pulp capacity with 350,000 ton dissolving pulp capacity put into production in November, which brought total capacity up to 500,000 tpy. Yueyang Forest & Paper and Jilin Chemical Fiber swapped their dissolving pulp assets with big shareholders for other items and held no such assets, and Fujian Nanping Paper and YanbianShixian Double-deer Industrial restructured their businesses and spun off paper products and dissolving pulp businesses due to years of losses.