“Among the many macro-economic problems that emerged from the recent crises, enhancing the basic conditions for operating and investing in the EU’s manufacturing sector, though still a major challenge, may be one of the easiest tasks for EU policymakers,” says Jori Ringman, Director General of Cepi (Confederation of European Paper Industries).
Affected by a negative macro-economic situation, pulp and paper production in Europe has dropped in 2023. This was caused by several external factors that added up: a weak economic climate, inventory reduction and high energy costs.
Due to mid-term global economic factors that affected the demand for paper and board and worsened destocking, consumption dropped by 15.3% in 2023 and, consequently, production in the paper and board industry faced a second year of decline, shrinking by 12.8%.
Following a year 2022 characterized by extremely high energy prices, the production decrease in 2023 was even more severe than during the Covid-19 crisis (-4.7% in 2020).
The high costs of production inputs in Europe, especially energy, which remain unaffordably high, have aggravated these global trends. This is shown by Europe’s domestic paper and board production shrinking more than in many other parts of the world, where decreases varied from -2% to -10%. However, in a globalised context of low demand, both imports and exports decreased similarly, and Europe’s pulp and paper’s trade balance stays largely positive, as it is one of the leading EU manufacturing sectors by this criterion.
The production of packaging paper and board in Europe, which has traditionally been a driver of growth in the sector, has also followed a declining trend, with consumption falling by 12.2%. The segment has been affected by a drop in retail and e-commerce numbers that have returned from pandemic levels. This consequently influenced the consumption of paper for recycling (-7.3%), as paper-based packaging in Europe is mainly made of recycled material.
Sanitary and household paper also showed more resilience than other segments, with a modest decrease of -3.7%. These are still profiting from societal trends favourable to hygiene products, with ‘at home’ markets such as tissues and toilet paper doing better than ‘away-from-home’ markets, more affected by inflation and weak private consumption.
Europe’s pulp production also fell less sharply than paper production overall, by 7.5%. The drop in the production of this ‘processed wood’, which is the main raw material for making paper and board, is due to a large number of shutdowns of graphic paper mills that also produced pulp. The production of market pulp increased by 4.8% in 2023 as capacities ran at full speed and profited from a high demand from China.
Download Cepi’s preliminary statistics report for 2023.
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