COVID-19 Impact on Pulp and Paper in Chemicals and Materials Industry
INTRODUCTION
COVID-19 outbreaks have developed across the globe and it hampers the demand of various products around the globe on a wider range. Many countries like Italy, India, U.S. and China have instituted lockdown in their country to reduce the spread of the virus. The virus will first affect the consumer spending patterns, which will cascade across the entire economy. From a pulp and paper perspective, such a pandemic will widely affect the paper and pulp sector. Due to the pandemic the paper sales plunging, as the demand from packaging, education, corporates and the print media has come to a naught with over 80% of the economy is on a standstill.
China accounts one-third of the world’s pulp imports market share. Due to the lockdown in China and halting on the import and export from one country to another the entire paper and pulp market were effected as will have to look to domestic markets to mitigate oversupply issues. This was the major concern for various paper and pulp exporter countries such as the U.S., which was by far the largest exporter of paper and pulp products to China.
The pandemic will reduce the demand of paper as it can boost the demand of towel and tissue worldwide. Health officials have stressed the importance of washing of hands to prevent the spreading of virus which could have the biggest impact for pulp and paper demand. The COVID-19 pandemics will widely affect the e-commerce industries and packaging industries which required a pulp and paper in bulk quantity. As the government imposed the restriction on travelling the consumer are preferring online grocery and other essential delivery services which required a wide range of paper products.
Demand for written and printing paper is hit by the closure of most educational institutions since the beginning of March and a gradual adoption of work from home. Demand for newspapers has also declined, with many readers avoiding newspapers and housing societies banning the entry of vendors as precautionary measures while some magazines have temporarily suspended editions.
IMPACT OF COVID-19 ON DEMAND OF E-COMMERCE PACKAGING
As lockdown imposed in many countries more than 70% of the industries have shuttered operations due to approval issues, lack of labour and raw material availability, logistics and demand disruption.
Plant closures, logistical disruptions to hit packaging demand in Q1 due to the suspension of operations for several industries, disruptions in production of essential commodities, inland transport and export shipments, the report says, adding the rising demand from e-commerce (for groceries) is not good enough to spike packaging demand at least in quarter of 2020 due to manpower shortage, supply chain issues. Read more…