Fastmarkets RISI Viewpoint: Imports of US softwood pulp in China collapse in 2019, should US fluff giants be concerned?

BEDFORD, MA, June 7, 2019-

By Patrick Cavanagh, Economist, Specialty Fiber

The most recent trade data as reported by China Customs is in for April, and the figures illustrate the challenges being faced by bleached softwood kraft pulp (BSK) producers in the United States. Year-to-date imports in China of BSK from the United States registered 348,000 tonnes, down a whopping 43% from the same period in 2018. The US stands out from the pack of the top five BSK exporting nations in the China Customs data (Canada, Chile, Russia and Finland), which have all experienced only single-digit declines over the same period. The two major differences between the US and the other top exporters of BSK to China are that the majority of bleached softwood pulp produced in the US is fluff pulp for use in absorbent hygiene products such as baby diapers, and US producers have been facing a 5% import tariff on pulp shipped to China since last fall. This begs the question if the large drop in US shipments of BSK to China represents a dramatic decline in demand for fluff pulp or is it due to the tariffs or some combination of other factors. The Chinese fluff pulp market is the most important in the world, both in terms of volume consumed and growth potential. It is particularly important for fluff pulp producers in the United States, who represent 85% of the world's supply, so we believe the trade stats warrant a closer look.

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