Overcapacity creates risk of closure in global tissue markets despite growth in demand
By Dan Comand
RISI today announced a risk of capacity closure in the global tissue market. These closures might be necessary despite a pattern of continued growth in demand, according to the recently released 9th edition of the Outlook for World Tissue Business.
By Dan Comand
“Tissue consumption has grown steadily for the last 20 years and is expected to continue into the foreseeable future. However, oversupply from massive capacity investments may force shuts in the near-term,” said Esko Uutela, Principal for Tissue at RISI.
Global consumption of tissue grew at an average annual rate of 3.8% from 1991 through 2010. That demand is expected to continue to grow by an average of 4.1% annually between 2010 and 2021. China, which in recent years has shown explosive growth in tissue consumption, is one of the major drivers of global tissue demand.
Meanwhile, new supply from capacity expansion investments, particularly in China, Latin America and North America, will send the global tissue capacity utilization rate into decline after 2012. In 2013 it is very likely that the average industry operating rate will fall to nearly 85% and remain at that level through 2014 despite the expected growth in tissue consumption.