Global paper and forest products industry outlook ‘positive’ change

Global paper and forest products industry outlook ‘positive’ change

Moody’s outlook for the global paper and forest products industry has changed to positive from stable, reflecting higher prices and lower recycled fibre costs across most subsectors of the industry in most regions, leading to consolidated operating income growth in the mid-single digits over the coming 12 to 18 months.
The consolidated operating income of the 11 rated European producers, which represent about 25% of the global rated industry’s operating income, will grow 4%-6% over the next 12-18 months. Drivers include slightly higher prices for specialty paper, paper packaging, pulp, tissue and wood products, as well as greater volume across all subsectors except graphic paper, which continues to face secular declines.
In the European paper packaging subsector,
Smurfit Kappa Group plc,
Metsa Board Corporation and Mondi plc will benefit from ongoing productivity improvements and slightly stronger demand and prices.
Ed Sustar, a Moody’s Senior Vice President, said: “Our positive outlook for the global paper and forest products industry reflects higher-than-expected market pulp, paper packaging and printing and writing paper prices. As a result, the 42 paper and forest products companies we rate globally should see consolidated operating income growth of 4%-6% over the next year or so, while G-20 GDP growth of just over 3% through 2019 will support demand and resulting higher prices.”

Stephanie Cornwall
Stephanie Cornwall
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