Demand for absorbent fluff pulp is continuing a steady growth trend, but list prices have jumped to all-time highs over the past year. Despite this, high prices for Southern Bleached Softwood Kraft (SBSK) paper-grade pulp – which is made from the same raw material as fluff pulp – have driven producers to "swing" potential fluff pulp output towards paper markets instead.

The risks of a fluff pulp supply crunch are among those considered by the Outlook for the World Fluff Pulp Market 2018, new from RISI, Boston, Mass., USA, a leading information provider for the global forest products industry.

"Specialty-grade pulp market forecasts are complicated by paper-grade demand and other external factors," said RISI Economist Patrick Cavanagh, lead author of the new RISI study. "Even as prices spike for fluff pulp, pulp mills may choose to make less of it, instead opting to pursue higher margins producing lower-cost paper grade pulp," said Cavanagh.

Absorbent fluff pulp is a key ingredient in many common consumer goods, including baby diapers, feminine hygiene products, and adult incontinence products. The use of these products has grown steadily, driven by rising incomes in the developing world. Fluff pulp demand in emerging markets has more than tripled since 2000, reaching 3.7 million metric tons in 2017.

"Fluff pulp production has traditionally been dominated by the U.S., but demand growth is coming from big emerging markets, such as Brazil and China," explained study author Cavanagh. The Outlook for the World Fluff Pulp Market 2018 forecasts emerging-market demand growth to average nearly 6% annually from 2018-2022, compared with mature market growth of 1%. Still, the U.S. accounts for 84% of total global production capacity.

"The U.S.-based fluff pulp producers still have important advantages, including readily available and accessible supplies of preferred Southern softwood fiber. They also maintain strong legacy relationships with the global consumer product groups (CPGs) that are the largest buyers of fluff pulp," said Cavanagh.

 

Major Latin American pulp producers, however, are working to counter these advantages with investments in new mills and technology, such as a first-ever Brazilian facility that makes fluff pulp from eucalyptus fiber.

In 2017, total global fluff pulp production capacity grew faster than demand, jumping 8.4% over the previous year. Yet prices still spiked, highlighting the myriad of forces that shape this large and growing specialty pulp market.

 "The global fluff pulp market is only one-fifth the size of the paper grade BSK market. The large volume of swing capacity leaves fluff pulp prices somewhat susceptible to rapid movements in paper-grade markets, like we have witnessed over the past 18 months," said Cavanagh.

The Outlook for the World Fluff Pulp Market 2018 includes 2018-2022 forecasts for all world regions, covering fluff pulp demand, production, capacity, pricing, and costs. Building on previous editions of the Outlook from 2011, 2014, and 2016, the new report also provides historical data back to 1995. The Outlook also explores the impact of broader pulp industry trends and other dynamics that affect the fluff pulp space.

 

More information is available online.