Tissue demand in July was again highly variable by region, and the global total is not telling anyone much.
Western Europe and North America both fell slightly, for a third consecutive month. China posted strong growth again, though slower than before, and EMGE’s reading is that the slowdown may reflect mill inventories filling up rather than demand easing, because it does not believe there are buyers for all of that additional product yet. That leaves the Chinese figures distorting the global picture, which EMGE describes as rather misleading as a result.
The operating ratios give a cleaner read than the demand numbers do. On a three-month moving average basis in July, Western Europe ran at 80%, North America at 85%, China, Japan and Korea at 70%, and the rest of the world at 69%. The two developed regions are running their machines harder than the rest even as their own demand drifts lower, which is the opposite of what the headline growth numbers imply.
For buyers of paper tissue and other packaging grades, the practical point is that a strong global demand line this month does not mean a tightening market in Europe or North America. It means Chinese mills are producing, and where that product ends up is still an open question.
Read the full paper tissue market analysis here.
