Page 16 - Print21 Nov-Dec 2020
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                Paper Prospects
   Total tonnage imports of printing and communication papers: 2010-2020 in thousands of tonnes
    ...continued from page 14
The drop in paper imports cannot be denied, yet it’s not evenly spread across the spectrum. Some types of printing are being hit harder than others, for instance magazines and newspapers show up as suffering almost terminal declines. Commercial printing suffers not only from decreasing demand but is being driven to use lesser grade papers by customers demanding lower cost. This will have significant effects on some grades.
Imported uncoated grades had
a surprising lift this year with uncoated woodfree rising by 16.5 per cent and uncoated mechanical, which includes newsprint, by 1.9 per cent. The UCWF totals are mainly driven by A4 cut reams, the digital printing staple, which saw an almost 29 per cent increase. Woods makes the point that these imports are subject to an anti-dumping case taken by the local manufacturer, Opal Australian Paper, “and thus are not without their controversy.”
Even as the imports increased their market share, this doesn’t translate into any overall lift in demand; it has more to do with replacing local production. The downward production trend remains.
It’s even worse for higher quality printing papers, the coated
woodfree and mechanicals (CWF). From 316,400 and 311,400 tonnes respectively in 2010 they have fallen to 108,900 and 162,300 in 2020, declines of 16.2 per cent for coated woodfree and a swingeing 26.8 per cent for the coated mechanicals.
Woods is clear-eyed about the future.
“Last time in the GFC it took mid-to-large companies up to a year or more to look for strategy plays; this time it’s two to three months.”
“The future for print? Of course it won’t disappear, but some sectors will suffer more than others. Some grades are likely to disappear completely from the local market. The grades that survive will be the less transformed papers. Coated papers are being harder hit by softer demand,” he said.
“Customers are driving paper prices and quality down and they’re doing this by substitution. Coated woodfree is the highest quality printing paper and the most expensive. It’s also the most exposed to substitution effect. It’s dropped
by twenty per cent over five years, a full rung down. Catalogues are now being printed on improved newsprint and will continue to be.
“The rate of decline will flatten and stabilise somewhat, but it is important to remember that overall printing paper has dropped by 50 per cent over the past decade. Despite the year- on-year manoeuvres in the market, the telling numbers are the average annual rates of decline. Despite occasional shifts up and down, the long-term declines are now locked in. None of these grades can be expected to return to their former glory.”
We’re turning Japanese
The almost complete takeover of the Australian paper industry by Japanese businesses is a defining phenomenon. Local production of printing papers is confined to Opal Australian Paper’s Maryvale mill in Victoria. Woods keeps tabs on local production of printing and packaging grades as well as the volumes of imports and exports. He
is deeply versed in the ownership and production dynamics. Overall, he has no issues with the Japanese takeovers.
“The Japanese presence in the Australian paper market is immense. They were here before moving into paper, investing in wood fibre. It makes sense from their perspective. Despite the tyranny of distance, they are relatively close, they see
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