Demand for print & graphic paper to decline sharply by 2010 - New market report

In  printweek.com article, it has been reported that a Stationers' and Newsprint Makers' Company Report, entitled, 'Future of Paper and Print in Europe 2008-2020', that there will be a dramatic drop in demand for print and graphic grades of paper in Europe.  Some highlights are:

• Total demand to drop by 32.5% by 2020
• Newsprint demand to decline by 56% between 2008 and 2020 
  
• Business papers and print to decline by 45.5%
• Magazine paper demand to decline by 32%
• Advertising and commercial print sector to decline by 14.5%

It doesn't take a rocket scientist to conclude that digital media and online publishing is the prime reason for the predicted decline in use of these papers.

For paper chemical producers this is a significant market for process chemicals and functional chemicals aimed at this market (eg OBAs, internal sizing, surface treatment).  To compound the agony, it is well know that imports of OBA (and other paper chemicals) from China and India into Europe have increased significantly in the last year or so.  The market report will also not make good reading for the suppliers of fillers and pigments (eg calcium carbonate, kaolin).

The market report was prepared by NLK Associates.

Consumption of tissue, towel and hygiene products to show future growth

At the Niece Tissue conference, Esko Uutela has reported that the global consumption of tissue products will continue to grow by around 4% per year until 2011.  This is good news for paper chemicals suppliers with a good range of products to offer this industry segment (eg Ashland, Nalco), provided profitable pricing can be achieved.

There are regional differences with the 'old' economies such as Japan, North America and Western Europe showing low relative growth when compared to the growth areas of China, East Europe and the Middle East.

Some specific information reported by Uutela was:

• China will add around 4.3 million tons
• Western Europe 1.8 million tons
• Latin America 1.7 million tons
• Eastern Europe 1.2 million tons
• The 'At Home' market will grow faster than the 'Away from Home' segment
• There has not been further consolidation - the top 4 in 2009 produced 38% of the global tissue, whereas they produced 42% in 1999
• Kimberly-Clark remains No 1 and SCA has moved to No 2 following the deal with P&G

The details of Uutela's presentation and other topics covered in the recent conference can be obtained from Tissue World.

EU asks BASF to offload some business to comply with competition concerns - a good deal for BASF

The European Comission has concluded its look at the acquisition of Ciba by BASF and ruled that there are concerns in a number of market segments:

• DMA3 (dimethylaminoethyl acrylate - a chemical intermediate)
• Synthetic dry strength resins (used in the paper industry) 
• Bismuth vanadate (a pigment)
• Indanthrone blue (a pigment)
• Styrene acrylic (used as a glue for paper applications) - BASF will, of course remain a dominant producer of styre acrylate emulsion polymers
• HALS - hindered amine light stabilisers (used in plastics)
• UV filters for skin care products

To resolve the competition concerns, BASF and the EU have agreed that the following will be divested:

• BASF's DMA3 production assets in Ludwigshafen, Germany
• Ciba's entire EEA (Ethylene ethyl acrylate) synthetic dry strength agent business
• Ciba's global bismuth vanadate business
• Transfer Ciba's ' know-how of the finishing line', all supply contracts acustomer lists and inventories for the indanthrone blue
• Ciba's styrene acrylate business (and polyvinyl acetate, acrylic acid or acrylate) in the European Economic Area at Kaipianen, Finland
• HALS - Ciba's entire 'Chimassorb 119 FL' business, including the Chimassorb 119 FL production assets, releveant know-how and customer lists
• UV filters - BASF will conclude a UV Filter Licence Agreement, giving third party access to the technology behind Tinosorb S

Further information is available from the European Commission web site if one likes reading and can understand the EU mumbo jumbo.

This list of divestments is very light and a great deal for BASF who will continue to increase their dominance in a number of market segments - especially paper chemicals.  It raises the question as to whether this type of deal would have been allowed if the current poor economic environment had not existed.  In the last 6 months there have been a number of attempts to protect industries in Europe and past competition rules seem to have been relaxed.

Can you trust market data?

It was interesting to read a recent advert for a study by Frost & Sullivan.  The title is, ' European Pulp & Paper Chemicals - is Consolidation the Response to a Mature Market?  What is striking is the market data shown for the European paper chemicals industry - there are only three significant players in a chart that is described as, '..... the market shares of the leading companies in the European pulp and paper manufacturing process chemicals market in 2008.

The segmentation of the pulp and paper chemicals market shows a complete lack of market knowledge and then to suggest that Kemira, Eka Chmeicals and Solvay have 85% of the process chemicals market is claptrap.  Further comments could be made on the report but it it not worth the effort.......... when the data are suspect, how can one trust the conclusions.  

The world of tissue and towel ..........

The June/July issue of Tissue World has just been published. There are a number of interesting articles such as a review of the Russian market and a good 'World Review 2007', covering the aspects of the tissue market across the globe - relatively stagnant but quality leaders in North America and Europe; 'booming' markets in China, Brazil; potential markets in India and Russia.

Worth a read.

FWA raw materials become tight - Opportunity for Chinese and Indian Producers

Not only are paper FWA (OBA) producers having to deal with the escalating price of raw materials linked to commodity price increases, there is now a growing shortage of raw materials used to make stilbene-based optical brightening (whitening) agents. One rumour has based the reason on the reduced output of the bigger Chinese producers.

The result is:

• Companies which are not back-integrated (eg Clariant) will struggle to get sufficient raw material to manufacture FWAs and will probably have to pay a premium
  
• Chinese producers (eg Transfar Whyyon Chemical) will further increase their prices on any material they have available after they have taken care of their own needs
  
• Indian producers will see this as an opportunity to develop their raw material business, which over the last few years has been eclipsed by the Chinese

The key raw materials are diamino stilbene (4,4'-diaminostilbene-2,2'-disulphonic acid), aniline disulphonic acid, cyanuric chloride and sulphanilic acid. One only has to look at the surge in p-nitrotoluene prices to surmise on the future impact of the recent market changes. It will also be interesting to watch how the major 4 suppliers (Ciba, Kemira, Clariant, Transfar) of paper OBAs (FWAs) manage their product supply and how market price increases are implemented. The need for access to supply from China and India has been emphasised before and now it may be difficult to secure supply and possibly too late.

The future looks bright for the Indian and Chinese producers.

PS: Some paper dyes are also based on stilbene chemistry

Keywords:
Paper Chemicals
Optical Brightening Agents
Fluorescent Whitening Agents

A new report predicts the global speciality paper additives market will reach USD 8.26 billion by 2010

A report by Global Industry Analysts Inc predicts that the world speciality paper additives market will reach USD 8.26 billion by 2010. As with all reports of this kind, the definition of the market is critical and the small value given to the market in this report indicates that a narrow definition has been used.

PR News Now gives a summary of the report.

If you exclude commodities (eg bleaching chemicals, filler, pigments) our own estimate puts the speciality paper chemicals market already in 2007 at over EUR 8.5 billion (USD 13 billion).

Hydrogen peroxide market predicted to reach 4.3 million tonnes by 2012

A press release by RISI reports on a recent market review, "Hydrogen Peroxide: A Global Strategic Business Report" published by Global Industry Analysts, Inc.

The highlights are:

• Hydrogen peroxide (H2O2) demand is partly driven by elemental chlorine free (ECF) processes; the introduction of maximum achievable control technology (MACT) by the EPA in United States; and total chlorine free (TCF) processes mandate by the European Union [comment: there is still not much TCF pulp produced and some analysts do not see much future growth - at least in the next 10 years]
  
• The US hydrogen peroxide market in 2008 is estimated to be 705 thousand metric tons for 2008
• The Asia-Pacific is the fastest growing market, with a CAGR of 8% over the period 2001-2010.
  
• The pulp & paper industry is the largest market segment for hydrogen peroxide and this segment is expected to be around 2.11 million metric tons by 2010.
• European producers dominate the market in both Europe and North America.
  
• North American producers such as Dow Chemical and FMC also have a significant presence in the market.
  
• The market is fragmented in the Asia-Pacific region where there is a large number of small players.
• Players dominating the global hydrogen peroxide market include Arkema, BASF AG, Chang Chun Petrochemical Co, DC Chemicals, Dow Chemical, Eka Chemicals, Evonik Degussa, FMC Corporation, Guangdong Zhongcheng Chemicals, Hansol Chemicals, Kemira, Kingboard Chemical Holdings, Mitsubishi Gas Chemicals, Nippon Peroxide, PT Degussa Peroxide Indonesia and Solvay.