Growing demand for pulp and paper products

Both in terms of output and demand, China's pulp and paper industry is the largest in the world. However, for China, some raw materials and specialty products are still dependent on imports. As domestic industries such as e-commerce and food delivery services continue to grow, so will the demand for pulp and paper products, which presents a huge opportunity for market entry and investment.

China is the world's largest producer and consumer of pulp and paper products. In 2022, China's combined pulp and paper product production exceeded 280 million tons and consumption exceeded 230 million tons.

Paper and paperboard products are critical to many industries in China, and demand is likely to continue to grow as incomes rise and consumers' disposable income increases. The rise of industries such as e-commerce and food delivery services has increased the demand for paper and cardboard packaging. In addition, China still relies on imports for certain domestically produced products and raw materials, such as wood pulp.

In this article, we examine the latest data on the Chinese pulp and paper market, including production, consumption and trade, and discuss the key market segments and opportunities for foreign investors.

Overview of pulp and paper industry in China

According to the "China Pulp and Paper Annual Report 2022" compiled by the China Paper Association, the total output of the pulp, paper and paper products industry in 2022 reached 283.91 million tons, a slight increase of 1.32% over 2021.

In 2022, the industry's total operating revenue was 1.52 trillion yuan ($210.32 billion), up 0.44 percent year on year, but profit fell 29.79 percent year on year to 62.1 billion yuan ($8.59 billion).

Supply and demand of paper and paper products

In 2022, China's paper and cardboard production reached 124.25 million tons, an increase of 2.64%. However, the output of paper products fell 4.65% year-on-year, with a total of 73.79 million tons produced.

A survey by the China Paper Association shows that in 2022, there will be about 2,500 paper and board producers and 4,727 paper products manufacturers in China, with annual revenue of more than 20 million yuan ($2.77 million).

From the perspective of demand for pulp and paper products, the total consumption of paper and cardboard was 124.03 million tons, down 1.94% from the previous year. The per capita annual consumption of paper and cardboard in 2022 will be 87.84 kg.

Despite the decline in the consumption of paper and paperboard in 2022, the growth in demand from 2013 to 2022 actually outpaced the growth in production, which grew at an average annual rate of 2.32% while consumption grew at an average annual rate of 2.67%. In fact, both production and consumption have remained relatively stable over the past decade, with consumption continuing to grow between 2018 and 2021.

A similar trend has been seen in the paper products industry. In 2022, the industry's total output fell 4.65% to 73.79 million tons, and consumption also fell 5.89% to 68.97 million tons. However, the industry's output is growing at an average annual rate of 3.69% and 3.45% between 2013 and 2022.

Supply and demand for pulp

According to the statistics of the China Paper Association, the total output of pulp in China in 2022 reached 85.87 million tons, an increase of 5.01% over the previous year. The largest segment of the pulp industry is waste pulp, with China's output of about 59.14 million tons in 2022, an increase of 1.72% over the previous year. Among them, the output of wood pulp was 21.15 million tons, an increase of 16.92%; The output of non-wood pulp was 5.58 million tons, an increase of 0.72%.

From the perspective of demand, China's pulp consumption in 2022 is about 112.95 million tons, an increase of 2.59% from the previous year. Among them, 43.28 million tons of wood pulp, accounting for 38% of the total pulp consumption, of which more than half (52%) rely on imports.

About 64.3 million tonnes of waste pulp were consumed in 2022, accounting for 57% of total pulp consumption, of which the vast majority (about 95%) was domestically produced.

Finally, non-wood pulp production will reach 5.37 million tons in 2022, accounting for 5% of total pulp consumption.

Mainly paper and pulp products

Cardboard and corrugated paper are the most commonly used packaging materials, accounting for the largest proportion in the production and consumption of paper products in China. This is followed by uncoated printing and writing paper, white cardboard and household paper.

Waste paper: In 2022, the total amount of domestic waste paper recycled in China was 65.85 million tons, an increase of 1.45% over 2021, the recycling rate of waste paper reached 53.1%, and the utilization rate reached 53.5%. The amount of waste paper recycled has gradually increased in the past decade, with an average annual growth rate of 4.64% from 2013 to 2022.

Newspapers and wrapping paper: Not surprisingly, with the rise of digital media, newspaper paper production and consumption have steadily declined over the past decade. Between 2013 and 2022, the compound annual growth rate of the industry's production is -14.28 percent and that of consumption is -10.38 percent. At the same time, the output of packaging paper in 2022 was 7.3 million tons, an increase of 2.1% over the previous year. Consumption was about the same at 7.31 million tonnes, up 1.25% from 2021. Between 2013 and 2022, the average annual growth rate of production is 1.56%, while consumption is 1.31%.