Global cartonboard demand grew in July, and almost none of that growth came from where EMGE’s European readers sit.
Western European demand fell again, though less heavily than in June, and more or less on trend. North America stayed slightly above trend, growing by almost 2%, helped by the football World Cup and probably by rising virgin-fibre prices pulling purchases forward. In what EMGE calls Big Asia, apparent demand grew by mid-teen percentages for a third straight month, after Shandong Chenming restarted production around three months earlier.
EMGE is cautious about reading that as real consumption. Much of the Asian volume is likely still to filter down the supply chain, and Asian prices for virgin-fibre cartonboard have been falling through the summer, which is not what a genuine demand surge normally looks like. Three-month moving average operating ratios in July ran at 81% in Western Europe, 82% in North America, 82% in China, Japan and Korea, and 73% in the rest of the world.
Containerboard shows the same pattern at a larger scale. Asian and developing-market volumes dwarf Western Europe and North America, so falling demand in those two regions is outweighed by growth elsewhere. EMGE again warns that growth is being driven by production on new machines, and that some of it may be heading into inventory rather than to customers. Western European packaging producers lost the Hormuz-related boost they had earlier in the year.
Read the full paper packaging market analysis here.
