US Tissue on Track for Solid Finish in Second Quarter 2022

By Paul Quinn, RBC Equity Analyst
RBC Capital Markets
August 2, 2022
Category: Finance & Economics
Region: United States

US parent roll production increased 4.0% y/y – According to RISI, US parent roll production increased by 30k tons y/y to 775k tons, while tissue mill capacity was down 10k tons y/y to 831k tons, increasing the US industry operating rate to 93.3% vs. 88.6% last year. However, the US industry operating rate decreased by 0.2 percentage points m/m, as production and capacity decreased by 40k tons m/m and 41k tons m/m, respectively, following the May closure of Georgia-Pacific’s Day Street Mill.

At-Home converted product shipments increased 3.6% y/y – According to RISI, at-home shipments increased by 18k tons y/y, with volumes of bathroom tissue and towel up y/y, while volumes of napkins and facial tissue were down compared to last year. In June, bathroom tissue shipments were up 6.1% y/y and towel shipments were up 3.8% y/y, while facial tissue shipments were down 7.9% y/y and napkin shipments were down 3.0% y/y. Relative to May, at-home shipments decreased by 6.2% (or by ~34k tons), as bathroom tissue was down 6.4% m/m, towel was down 6.0% m/m, napkins were down 5.9% m/m, and facial tissue was down 5.4% m/m.

Away-from-Home (“AfH”) converted product shipments were up 1.2% y/y – AfH shipments posted a twelfth consecutive month of y/y gains. By category, bathroom tissue was up 2.2% y/y, while facial tissue, napkins, and towel stayed flat y/y. Relative to May, AfH shipments decreased by 1.2% (or by ~3k tons), as bathroom tissue was down 1.1% m/m, towel down 1.0% m/m, and napkins down 2.4% m/m, while facial tissue was flat m/m.

Apparent consumption of converted tissue products increased by 4.1% y/y – According to RISI, apparent consumption increased by 4.1% y/y to 803k tons (~32k tons higher y/y), which was greater than the 2.8% y/y increase in converted product shipments. Apparent consumption decreased by 4.6% compared to May (or by ~38k tons), while converted product shipments also decreased by 4.6% m/m (or by ~37k tons).

Total US tissue exports increased 5.6% y/y, but decreased 7.6% m/m in May – According to RISI, total tissue exports decreased by 3.7k tons m/m to 45.1k tons in May, with exports to Mexico down 6.3% m/m, Canada down 2.4% m/m and Other down 24.8% m/m. Compared to April, parent roll exports were down 12.2% m/m, towel exports were down 26.8% m/m, and facial exports were down 1.6% m/m, while napkin exports were up 16.6% m/m, and bathroom tissue exports increased by 26.7% m/m.

Total US tissue imports increased by 30.8% y/y and 15.3% m/m in May – By country, tissue imports from Canada, China and Mexico increased by 55.2% y/y, 42.2% y/y and 12.6% y/y, respectively, while imports from Indonesia and Other declined 8.2% and 7.4%, respectively. Parent roll imports increased by 51.5% y/y, facial imports increased by 64.5% y/y, napkin imports increased by 22.2% y/y, towel imports increased by 9.2% y/y, and bathroom tissue imports increased by 3.6% y/y.

Tissue prices higher m/m – According to RISI, virgin parent roll prices increased by $33 m/m to $1,538/ton for low-quality rolls and by $34 m/m to $1,724/ton for high-quality rolls. RCF parent roll prices increased by $1 m/m to $1,216/ton for low-quality rolls and by $3 m/m to $1,331/ton for high-quality rolls.

Georgia-Pacific’s Green Bay expansion (2024) breaks ground – Georgia-Pacific announced on July 21 that it had broken ground on its US$500 million expansion of its Broadway mill.

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