BEIJING, 11 May 2022 (Fastmarkets RISI) - China’s paper and board (P&B) production and consumption posted strong growth in 2021, despite the implementation of the country’s ban on recovered paper (RCP) imports, the China Paper Association (CPA) said.

P&B output reached 121.05 million tonnes in 2021, a new record high and a year-on-year increase of 7.5%, according to the association’s annual report.

A total of 84.47 million tonnes, or 69.8% of output, was produced by the top 30 producers. This compares with a share of 43.1% in 2011, indicating a significant concentration of the industry over the past decade.

Due to relatively strong P&B pricing, especially for fine paper and virgin cartonboard in the first half, 2021 was a profitable year for the majority of China’s P&B companies.

The profits of P&B producers reached 54.1 billion yuan ($8 billion) last year, up 17.01% from 2020, the CPA said, citing a survey by the National Bureau of Statistics, which covers 2,426 P&B manufacturers in China.

Of the surveyed producers, 452 reported a loss in 2021.

Apparent consumption of P&B in China jumped to a new high of 126.48 million tonnes in 2021, up 6.94% from 2020.

As well as elevated production levels, a 6.86% year-on-year decline in P&B exports to 5.47 million tonnes was a contributing factor to the increased consumption.

China’s P&B imports fell by 5.55%, or 640,000 tonnes, to 10.9 million tonnes in 2021, ending four consecutive years of growth between 2017 and 2020.

The most notable decrease in imports was for corrugating medium, which fell to 2.94 million tonnes last year from 3.89 million tonnes in 2020. This was due to ballooning RCP costs, particularly in Southeast Asia, and inflated shipping freight making overseas material less competitive than domestic products.

China’s intake of linerboard, including virgin fiber-based kraftliner and recycled linerboard grades, dipped to 3.99 million tonnes from 4.04 million tonnes a year earlier.

Laos replaced the United States as China’s largest source of linerboard imports. Tonnage from the landlocked Southeast Asian country soared from zero in preceding years to around 729,000 tonnes in 2021, due to Sun Paper commissioning two recycled containerboard machines, with a combined capacity of 1 million tonnes per year, at its mill in Muang Phin, Savannakhet province, in early 2021 and shipping most of the output to China.

Mills in China produced 28.05 million tonnes of linerboard and 26.85 million tonnes of corrugating medium in 2021, year-on-year increases of 14.96% and 12.34% respectively, according to the CPA. This was despite the country introducing a complete ban on RCP imports at the start of the year.

The lack of access to imported recycled fiber had a more damaging effect on newsprint production in China. Output of the grade shrank to 900,000 tonnes in 2021, down 18.18% from 2020.

Apparent consumption of newsprint decreased by a more modest 8.57% to 1.6 million tonnes, with a 9.23% uptick in imports of the grade partly offsetting the deep dive in production.

Pulp import volume down

China’s market pulp imports, including non-paper grades and recycled pulp, dropped to 30.52 million tonnes in 2021, down 2.65% from a record high of 31.35 million tonnes in 2020.

The average price for imported pulp was $675.49 per tonne, around 31.78% higher than in 2020.

The high prices for imported pulp incentivized domestic producers to ramp up their own production and the start-ups of several new wood pulp lines in China boosted the country’s wood pulp production to a new peak of 18.09 million tonnes in 2021, up 21.4% year on year.

In response to the ban on RCP imports, P&B producers in China sourced more recycled pulp from overseas as alternative fiber.

China imported 3.27 million tonnes of recycled pulp in 2021, up 31.33% from 2020, the CPA said.

This volume included 830,000 tonnes that the association identified as recycled pulp reels, which were brought into the country in the name of P&B imports.

From Fastmarkets RISI