In a world context in which the European and North American economies are, as we are all well aware, being severely buffeted, French packaging paper and board output is feeling the consequences. It has however valiantly held out and achieved growth of more than 8% in the first quarter (all grades), thanks to exports. The details for the grades however show a large degree of variation.
Packaging papers. Over the first three months of 2008, French output was up 11.1% to reach 70,220 tonnes. This renewed vigor was mainly a result of the fact that over the same period in 2007, there had been a number of extensive maintenance shutdowns. French output also felt the benefits of increased European demand under the impact of the restructuring of the industrial tool. As a consequence, exports leapt by almost 30% and accounted for more than half of the French production at 46,807 tonnes. At the same time, imports dropped 5% with a domestic market that lacked dynamism.
Sack papers. At the end of the 1st quarter 2008, French home market industrial sack shipments were down 5% against 2007 at 118.79 million sacks whilst production declined 4.7% to 142.5 million units. Looking at the details, shipments to seed producers were strongly up, whilst those to the construction materials, human and animal feedstuffs and mineral products segments, were all down. As for exports, these were 3.3% lower.
Cartonboard. This sector has been hit by both the depressed state of Western European markets and by the weakening of the dollar which has resulted in the arrival of board from competitive currency countries, including a 37% rise in imports from the United States, 33% from Chile, etc.
French output was up 2.7% at 209,515 tonnes but exports were down 5.9% although still accounting for more than 50% of French production (113,367 tonnes).
Carton. Although this sector is still the one that does not communicate its figures, according to Cofepac, the output of carton felt the benefits of a good level of activity in the first quarter.
Corrugated case materials. Over the first three months of 2008, the Western European market declined by 2.5%. The same trend was seen in France with a 3.5% drop in tonnages.
Output over the period was up 9.4% to reach 851,120 tonnes and was above the ten year average.
The first quarter 2007 was especially mediocre because of shutdowns for maintenance and because of incidents (fire at Facture). This recovery in output just as consumption is slacking off has pushed producers to look to exports and these were up 20.6% to reach almost a third of French production.
Outlook. According to Cofepac, in an uncertain economic context, the packaging sector activity could remain dull, both in Europe and in France throughout 2008. The balance of supply and demand for basic materials should improve following the large number of maintenance shutdowns that have taken place since Easter and with the traditional pickup in demand in Europe in the second quarter.
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