The global paper and pulp industry continues to operate in a highly complex environment, shaped by volatile raw material costs, shifting consumer preferences, and persistent supply chain disruptions.
The sector experienced a period of subdued performance in 2023 and 2024, marked by a significant decline in demand. Looking ahead, industry analysts are cautiously projecting modest growth in 2025.
Against the backdrop of short-term volatility, performance across industry segments has remained uneven. According the American Forest & Paper Association (AF&PA), packaging paper capacity expanded by 4.6% in 2024. In contrast, containerboard capacity declined by 0.9%, while printing and writing paper saw a more substantial contraction of 6.9%. Notably, specialty paper packaging and premium tissue products demonstrated strong momentum in 2024, with continued growth expected into 2025.
However, uncertainty continues to define the path to recovery. Recent U.S. tariffs and shifting global trade policies create new challenges, promoting a need for agility and responsiveness across the sector. Atradius Underwriter, Duy Tran offers expert insights into the latest trends and risks shaping the paper and pulp industry.
Tariff and Trade: Navigating New Global Pressures
On February 1, 2025, President Trump signed an executive order imposing tariffs on imports from China, Mexico, and Canada. A series of policy escalations and partial reversals followed, resulting in considerable uncertainty across global supply chains. Substantial import duties are now being faced by major exporters of paper and pulp such as China, Indonesia, Finland, and Brazil when trading with U.S. partners.
Due to traditionally low margins in the industry, many suppliers have passed additional costs on to customers, increasing the financial burden on U.S. buyers. In response, some companies have adopted alternative strategies, such as routing products through Canada or Mexico for additional processing to qualify for tariff exemptions under USMCA. As companies reassess their global strategies, they are increasingly focusing on Latin America and Europe as key regions for growth and diversification.
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Get StartedEmerging Demand: Sustainability, Innovation, and Consumer Shifts
Despite short-term disruptions, several industry segments—particularly containerboard, specialty packaging, and tissue products—are showing strong resilience and growth potential. The global push toward sustainability and environmentally responsible packaging is opening up new opportunities. Notably, companies are increasing investment in developing compostable, water-resistant fibre-based packaging. One example of this is LEGO’s transition to paper-based polybags in 2024 as part of its broader initiative to eliminate single-use plastics.
At the same time, the printing and writing paper segment continues to decline structurally. This trend is largely driven by the accelerating digitalization of daily life. As consumers shift toward digital media, traditional publishers of newspapers and magazines are under pressure to change. Many are transitioning their business models to digital platforms, which further reduces demand for print-based products. In response, major industry players are consolidating operations. They are closing legacy paper mills and investing in modern, more efficient facilities.
Industry Consolidation and Strategic Positioning
The industry remains highly consolidated, with a few major players commanding significant market share. Recent mergers and acquisition underscore this trend:
- Smurfit Kappa and WestRock
- International Paper and DS Smith
- Sonoco and Eviosys
- Kimberly-Clark and Suzano (Joint Venture)
These large-scale organizations possess the capital and operational flexibility to navigate short-term disruptions, including tariff-related challenges. In contrast, small and mid-sized firms, especially those in niche markets like specialty papers, are more vulnerable. With limited pricing power and rising operational costs, they face mounting pressure. Monitoring the payment behavior and financial health of smaller buyers will be crucial in 2025 and beyond.
Looking Ahead: Agility and Innovation Will Define Success
The paper and pulp industry is undergoing a period off transformation. External pressures such as tariffs and shifting trade policies present challenges. At the same time, they highlight the need for strategic agility, innovation, and sustainability. Companies that adapt to changing market dynamics and invest in forward-looking solutions will be better positioned to thrive in the evolving landscape.
