Marcus Hellberg, Business Area Manager Tissue and Board for Södra Cell, reflects on the increasingly important role of softwood pulp in the fibre mix.
Marcus Hellberg, Business Area Manager Tissue and Board for Södra Cell
Ask any major pulp producer 20 years ago what the main end uses for pulp were and most would have had little hesitation in answering graphic papers.Yet for the first time, global volumes of tissue have just surpassed those of mechanical papers. Little wonder then that tissue customers are proving of increasing interest for market pulp producers and Södra Cell, Europe’s largest market pulp producer, is no exception: the share of the company’s pulp production used in tissue applications has increased from 16% in 2001 to 33% in 2011 with over 40% forecast by 2020.
The reason? From 2001 to 2007, global demand for printings and writings and tissue grew by an average of 2.9% per year or 21 million tonnes. For the three years to 2014, however, demand growth is projected to average just 0.6%/yr, brought down by the graphic paper sector, which is a challenging situation for printing and writing producers and their suppliers.
In contrast to woodfree and mechanical papers, global demand for tissue is growing and its importance as a percentage of global fibre demand is increasing. Indeed, according to the Pulp and Paper Products Council’s latest numbers, as a percentage of global tonnage, tissue now accounts for 24% of all paper consumed, up from 18% in 2000, while mechanical papers have fallen from 27% of paper demand to 23%. Total global paper demand peaked in 2007, according to the PPPC, at 131 million tonnes and was down to 124 million tonnes in 2011. Tissue grades now represent over a quarter of global demand for chemical market pulp.
Global average growth in tissue demand is set to continue around the 3% mark, with a 3.3% increase forecastfor 2013 and 3.4% for 2014, or three million tonnes. Year to date, the trend is very steady with a 3.2% increase in demand this year compared to last. This demand is coming again from the emerging markets and primarily China which looks set to continue growing at 7.5%/yr.
By 2014, tissue’s influence on the overall pulp market will be even stronger with tissue demand expected to increase by another three million tonnes, in contrast to demand for mechanical papers which will be down 2.3 million tonnes and a relatively small increase in woodfree grades of 1.8 million tonnes. In the face ofthe declining fortunes of one of its main end uses, Södra has turned its attention increasingly to tissue but also to dissolving pulp with the startup of a dedicated dissolving pulp line at Mörrum.
Newsprint: Here today, gone tomorrow? Mechanical papers, namely newsprint, are a prime source of recycled fibre for tissue producers and the long-term downward trend in demand in the sector means that there will ultimately be less recycled fibre available on the market. For tissue producers, this will mean agreater dependence on virgin fibre and an increasing need to optimise efficiency andvalue in their use of market pulp.
With hardwood and softwood fibres imparting different properties to the end product, tissue producers need both. There is certainly an unprecedented volume of new eucalyptus pulp coming on stream over the next 18 months – around 4.5 million tonnes - but very little softwood capacity.
At the same time, as demand for fine paper contracts, the availability of recycled fibre will also contract. In recent years, recycled fibre demand has grown at twice the pace of virgin fibre to represent over half of the total fibre market. The drivers of this growth have been lower cost, and technology, which has allowed for the production of 100% recycled papers, and capacity growth; packaging and Asia are the grade andregion that use recycled fibre the most, and they are the fastest growing.
However, graphic papers are a net supplier of recycled fibre and declining demand for graphic papers is starting to impact the supply of recovered papers. The USA and Japan are reaching optimum recovery rates, and even China, which has increased recycling rates considerably in recent years, is also close to its limits. Emerging markets have a lot of untapped potential for recycling but it takes time to establish a recycling culture. As a result, higher recovery rates are leading to higher costs and lower fibre quality; the fibres have been used more times, have smaller fragments, inferior bonding and higher prices, with suppliers having to dig deeper into marginal sources of supply with high levels of contamination. This creates issues with yield, and ultimately adds to the cost – so reco-vered fibre prices are increasing quite substantially.
Depleted fibre quality is a growing challenge, for some regions more than others.North America has good access to virgin fibre, especially softwood, while Latin America is mostly geared towards hardwood. Europe is already seeing quality issues concerning recovered fibre, yet at the same time, consumers are demanding cleaner, stronger fibre.
As a leading supplier of both softwood and hardwood fibre for tissue producers, Södra is taking the fibre challenges for its customers seriously. The rising cost and declining supply of recycled fibre looks set to reduce the cost differential between virgin and recycled fibres and there will likely be a greater degree of substitution betweenfibre grades in the future. With added cost pressures, customers are looking for maximum yield at minimum cost. In response, Södra has launched a couple of projects aimed at new grades of premium pulp specifically with tissue producers in mind: designed to impart the strength and softness end users want.
As the quality of recovered fibre continues to present challenges for tissue makers, and hardwood content in stock continues to increase, the role of high-quality softwood to provide strength and structure at the same time as improved softness and runnability, is ever more valuable. Fine tuning the furnish by adding softwood can help save energy and decrease grammage without impacting quality. •