Page 19 - Packaging News Magazine Sep-Oct 2018
P. 19

September-October 2018 www.packagingnews.com.au
INDUSTRY INSIGHT
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FIG. 1: Australian Corrugated Box Material Consumption: 2014-15 – 2017-18 (’000 tpa)
 
 

     
   
 
  
 
           


 
    
FIG. 3:: Cartonboard Imports: SQ’14 – JQ’18 (ktpq & ktpa)
FIG. 4: Fibre Resource Price Changes: 2014-15 – 2017-18 (USD) [Index: Base 100 = SQ’14]
The IndustryEdge assessment is that this increase in cartonboard supplies is consis- tent with packaging needs in the Austra- lian economy. It ties in with the growth in corrugated box demand, and of course, of packaging in general. Average import pric- es were up 6.0 per cent in the June quarter of 2018, compared with the prior year.
FIBRE PRICES RISING
Globally, fibre prices have been rising for the better part of two years. The focus of most box users is, correctly, on virgin pulp and recycled fibre prices. Yet there are other indicators that demonstrate the value of fibre has risen.
Perhaps the best example is softwood chips that are exported for the manufac- ture of paper and paperboard. Softwood timber is the primary feedstock for virgin
Kraftliner production. In Figure 4, the index of US dollar price increases of three different forms of fibre used in corrugated box manufacture makes the point.
Even taking into account recent Chinese quality requirements for recovered paper, we can easily observe how demand for Re- covered Boxes (Old Corrugated Cartons or OCC) saw prices begin to recover quickly.
Consensus is that global fibre price corrections are unlikely in the medium term. This will feed into higher fibre input prices for all grades of paper and paperboard. It is important to add that we envisage upwards pressure on other input costs in Australian over the coming year.
Energy price pressures continue to be significant, despite the efforts of all of the domestic producers to reduce costs through innovation and investment.
PACKAGING’S RISE COMES AT A COST
As ever more and varied emphasis and scrutiny is applied to packaging, its costs will rise.
For boxes, rapid apparent growth in demand, coupled with inherent sustain- ability, massive volumes and a seemingly constrained domestic supply chain are already driving prices higher. That is a situation we can envisage will continue throughout 2018-19 at least. ■
ABOUT THE AUTHOR
Tim Woods is the managing director of IndustryEdge, the leading fibre packaging market analysis and consulting firm.
IndustryEdge provides subscription data, market intelligence and strategic analysis services.www.industryedge.com.au
      

   
FIG. 2: Australian Exports of Corrugated Box Materials: 2014-15 – 2017-18 (‘000 tpa)











 


 
 
 
 


Source: ABS
Source: IndustryEdge research & ABS
Source: IndustryEdge research & ABS
Source: ABS







































































































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