Christian Chavassieu, Managing Partner of CelCo, delivered his report of CelCo DWP Market Update.

The report focuses on the supply and demand situation and market pricing of DWP.

Global usage of DWP experienced its first decline since COVID-19 pandemic, with usage reaching 7 million tons in 2023, while global capacity expanded by approximately 200,000 tons to 9.825 million tons in 2023. Specifically, the capacity expansion in 2023 mostly came from Bracell and Lenzing in Brazil. However, despite the rapid expansion of capacity, due to a slowdown in demand in market segments, the global capacity utilization dropped to 72% in 2023. The four major players, RGE, RYAM, GP, and BRDG, collectively held 87% of the specialty DWP market. In terms of import and export markets, the top five exporting countries for DWP in 2023 included Indonesia, Brazil, South Africa, the United States, and Canada, while the main importing countries were China (62%), followed by India, Indonesia, and Germany.

In terms of demand, rayon staple fiber usage represented 75% of the total cellulose demand. The main consumption regions for DWP were North America, Latin America, Europe, and Asia, with a focus on textile-grade DWP in Asia, including China. Global demand for dissolving pulp declined by 2.7% in 2023 (compared to a 2% growth in 2022) due to overall weak demand except China. In 2023, demand for rayon staple DWP remained stable globally, but demand for specialty DWP decreased by 12%.

Combining supply and demand, the DWP total capacity and demand spread expanded to to 2.8 million tons in 2023, leading to a decrease in global capacity utilization. In 2023, the capacities of the three major viscose staple fiber suppliers and internal DWP capacities grew simultaneously, reaching a vertical integration rate of 85%.

Finally, global Container shipping costs have risen somewhat due to the Suez (war) and Panama (water level) canal issues. In terms of price trends, global DWP prices fell by 8% in 2023, rayon grades prices fell by 12%, while specialty grades rose by 9.5%.