The world fluff pulp industry and its end-users in hygiene and nonwoven markets are facing a pivotal year—according to the latest dedicated analysis from Smithers. For the short term, in first quarter 2022, fluff pulp prices have hit record levels. Even as these subside, the market will face capacity challenges, realize the need to adjust to changes in hygiene product designs and look to capitalize on the potential of one of the most sustainable inputs for nonwovens.

Volume, Value and Pricing

Exclusive data from the new Smithers Study—The Future of Fluff Pulp to 2027—show that in 2022 world demand will reach 6.9 million air dried tons with a value of $8.3 billion. This is up from 5.8 million air dried tons valued at $4.5 billion in 2017; with much of the value growth accounted for unprecedentedly high per ton prices now being paid. List prices in Q1 2022, are as high as $2000 per air dried metric ton—two to four times their historic average.

Smithers’ analysis reveals that as the post-Covid recovery continues around the world, a moderate increase in volume at 3.4% year-on-year will push world consumption to 8.1 million air dried tons in 2027. Over the same period prices will moderate downward, meaning value growth will slow markedly, with overall value reaching $8.6 billion in 2027.

Demand in particular will be strong in developing economies in Asia and generally track demand for hygiene goods which are the main end-use for fluff pulp. The main use is in the absorbent cores of nappies/diapers, toddler training pants, adult incontinence goods and feminine hygiene products. Combined these will account for just under 90% of fluff pulp demand in 2022.

This market, while still healthy, is undergoing changes, especially in the switchover to product cores that contain less or non-fluff pulp. This has been pioneered by Procter &Gamble with its DryMax cores, as well as other companies like Belgium’s Drylock Technologies.

Nonwovens

While these hygiene goods are essential products for nonwovens manufacturers this fluff pulp is not converted into a nonwoven substrate before integration. Fluff pulp does serve as a feedstock for fiber-based nonwovens—airlaid, coform, spunlace—as well. In 2022, Smithers analysis shows these will consume 636,200 air dried tons of fluff pulp.

These grades are directed primarily toward a few products—such as wipes and table covers—and airlaid is also employed in feminine hygiene goods. Overall fluff pulp consumption in nonwovens will increase over the next five years due to its superior sustainability credentials; fluff pulp is one of the most sustainable raw materials, based on tree species grown with no irrigation and little or no pesticides on land with no value for food production.

This trend market is most advanced in Europe, where legislation—mainly the Single-use Plastics Directive—has focussed the industry to investigate non-polymer constructions as a priority and ‘ethical consumers’ will pay a premium for more recyclable goods. Airlaid is best positioned to capitalize on this demand, and it will especially bolster products such as Glatfelter’s cellulosic bonded fluff pulp for wipes. For competitors, the top R&D goal is to develop their own biodegradable, non-plastic binders or bonding fibers.

Coform will remain confined to Kimberly-Clark, with use in a 60/40% blend with polypropylene for its Huggies-brand baby wipes.

The fastest growing nonwovens segment that employs fluff pulp is spunlace, mainly for use in home disinfectant wipes. This has been a boom market during the past two years of global pandemic, but only two major suppliers have products that work well with the disinfectant chemicals needed for these wipes. This is restraining growth, but it is anticipated that several other spunlace cleaning wipes will be launched before 2027.

World Production

With record prices, and rising demand, future supply is a central concern for the industry. Fluff pulp is highly concentrated, both geographically and in terms of companies active. North America will supply 83.5% of the global capacity in 2022. Indeed, cultivation for fluff pulp is largely confined to eight southeastern states where southern softwoods—mainly loblolly and slash pine—grow best. And three U.S.-headquartered companies—International Paper, Georgia-Pacific and Domtar/Paper Excellence—now account for three quarters of total world output. 

This means that historically the U.S. has been the only region in the world that is a net exporter of fluff pulp. In South America there have been several capacity expansions across 2017-2022 from Klabin, Suzano and Arauco. This will lead to the region soon joining the U.S. as a net exporter, potentially as soon as 2023. Suzano has also pioneered the use of eucalyptus fluff pulp—one of very few hardwood trees used—under the brand name Eucafluff. The resilience of eucalyptus trees means they could ultimately allow fluff pulp production to expand into other regions not suited to growing softwood species.

Asia will also gain its first in-region fluff pulp capacity in 2022; when Daio Paper starts up its converted 90,000 air dried ton per year mill at Mishima in Japan. This will only account for a fraction of Asian demand for fluff pulp over the next decade, however, with the majority of demand still met by imports. The economic sanctions resulting from the war in Ukraine will also slow any aspirations the Russian forestry sector have for diversifying into fluff pulp. 

Capacity Crunch

Despite expansions in South America coming on stream, Smithers analysis shows these are failing to keep up with demand, meaning supply is increasingly becoming tight. In response, the industry is increasingly relying on a small number of swing mills that can quickly switch between output of fluff pulp and other pulps as required by market conditions.

In 2017, such swing mills accounted for under 27% of fluff pulp capacity, in 2022 this is projected to rise to just over 36%. While a few dedicated fluff pulp expansions are anticipated through to 2027, overall these will not keep pace with demand increases making swing mills even more important. This in turn will be dependent on fluff pulp remaining a higher margin product than other potential outputs—mainly southern bleached softwood kraft.

The current and future market outlook for fluff pulp in nonwovens and other products is profiled in depth in the new Smithers study, The Future of Fluff Pulp to 2027; including detailed analyses of end-uses, technology developments and the output of all major fluff pulp mills worldwide.  

This essential business guide as the industry transitions through a pivotal year is available to purchase now from Smithers.
www.smithers.com/services/market-reports/nonwovens/the-future-of-fluff-pulp-to-2027