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Mineral demand outlook for global paper & packaging markets
Ian Wilson, Consultant, UK
Ilari Valkeinen
Wisdom Intelligence Eileen Hao
Mossman Resources Richard Flook
Masato Katayama, President
ACKNOWLEDGEMENTS
Ismene and Mike
Nick Wilshaw
Ghulam Mohammad, CEO
TD Vietnam Ms. Thu Vu
AGENDA o Some minerals used and shape and size o Some details on kaolin and PCC , particulary Specialty Minerals (MTI) o Market view from Valmet who make paper machines o A producing paper/board company - Stora Enso mineral use o Situation in Japan - use of some pigments for paper o Situation in China - reasons for 7% decline in output for P&B
Crystals and types of Calcium Carbonate (CaC03)
Rhombohedral Calcite Scalenohedral calcite Aragonite needles
Chalk Cocoliths
Lamellar nature of talc from Afghanistan
Markikhel Mine
SCALENOHEDRAL CALCITE RHOMBHEDRAL CALCITE ARAGONITE NEEDLES
PRISMATIC CALCITE SPHERICAL CALCITE CLULTER ACICULAR ARAGONITE
Some PCC morpholgies produced by Specialty Minerals Rhombohedral, Scalenohedral and Aragonite
KAOLINITE STACK 10 MICR0NS KAOLINITE PLATES 2 MICRONS
SHAPES OF BLOCKY,PLATY KAOLINITE AND TUBULAR HALLOYSITE
THIN PLATELETS 2 MICRONS
HALLOYSITE 500nm
PAPER TYPES
NEWSPRINT – MAINLY MECHANICAL PULP OR RECYCLED FIBRE UWF (UNCOATED WOODFREE) – PRINTING & WRITING PAPER WOODFREE PAPER - <10% MECHANICAL PULP. WF INCLUDES COATED (CWF) AND UWF. (WF = FINE PAPER, US - FREE SHEET) CWF – COATED WOODFREE PINTING AND WRITING PAPER LWC – LIGHT WEIGHT COATED. USUALLY MECHANICAL PRINTING PAPER <60gsm USED IN PUBLICATION PAPER SC - SUPERCALENDERED PULP TYPES BHKP - BLEACHED HARDWOOD KRAFT PULP BSKP - BLEACHED SOFTWOOD KRAFT PULP BCTMP - BLEACHED CHEMI-THERMOMECHANICAL PULP KRAFT PULP - REMOVE LIGNIN LEAVING FIBRES BEFORE BEING USED IN SOME PAPERMAKING KRAFT PAPER - MADE FROM KRAFT PULP – STRONG PAPER USED MAINLY IN WRAPPING / PACKAGING
PAPER AND PULP TYPES
KAOLIN
DELAMINATION OF STACKS OF KAOLIN - UK
>10 Micron stacks in overflow second stage
of classification
PLATES, FROM DELAMINATION
OF STACKS – HIGH ASPECT RATIO/ SHAPE FACTOR
MEDIA GRINDING TO PRODUCE HIGH ASPECT RATIO CLAYS FOR SC (SUPECALANDERED PAPER)
10 mic
1 mic
STACKS PLATES
DELAMINATION
MEASUREMENT OF SHAPE FACTOR AND ASPECT RATIO • ECC (NOW IMERYS) DEVELOPED A STOP-FLOW CONDUCTIVITY
MEASUREMENT INSTRUMENT WHICH GIVES A SHAPE FACTOR. THE METHOD IS KNOWN AS
PANACEA: PARTICLE
ASSESSMENT (by)
NATURAL
ALIGNMENT (and)
CONDUCTIVITY
EFFECT
ANALYSIS
ASPECT RATIO CAN BE MEASURED BY THE TEM
SHADOWING TECHNIQUE
For a given shadow angle, particle thickness proportional to shadow length
• One of main roles of a paper coating is to provide optical and physical coverage of the base paper providing a high quality surface for printing
• Main difference between kaolin and carbonate in paper coating is particle
shape. The platy nature of kaolin gives a smooth surface for printing whilst carbonate is added for brightness (and is generally much cheaper)
• Generally the higher the aspect ratio of kaolin mixed with calcium carbonate
(GCC) will give better printability.
• IMERYS developed new coating pigments from mid-Georgia called “E-TYPE”
PAPER COATING
Pigment GE Brightness % <2um Shape Form Slurry % solids
Premium Fine Platy Pigments
Contour™ Xtreme HS 90 97 Platy Slurry/Dry 69-69.5
E100™ 88 91 V.Platy Slurry/Dry 67
E170™ 88 90 V.Platy Slurry/Dry 63.5
Premium Coarse Platy Pigments
E300™ 87.5 84 V.Platy Slurry/Dry 62
E500™ 87 78 H-Platy Slurry/Dry 61
E800™ 87 72 H-Platy Slurry/Dry 59.5
o Premium Coarse Platy Pigments – provide good coverage and developed for use in pre-coating and work well blended with other pigments such as GCC. Improved coverage allows papermakers to reduce calendering and improve sheet bulk
o Premium Fine Platy Pigments work well in single coated applications and can be blended with GCC. Can be used in coated board precoat applications to improve
coverage on darker base boards. Work well blended with calcined clays. E800™ Hypa-platy.
PLATY PIGMENTS
IMERYS North American Kaolin Value in Coverage
SURFACE GLOSS
STIFFNESS PRINT QUALITY
SOURCE: CHRIS NUTBEAM, IMERYS
COATING CLAY - SHAPE FACTOR AND FINENESS d50
Bakery/Bread Bag
o IMERYS produce BARRIKOTE™ which is a water-based barrier coating (WBBC) using hyper-platy kaolin in formulated coatings for use in various packaging applications.
o The barrier solution can be regulated, by varying the coat weight, to enable the bread to breath at the required rate to extend shelf life and maintain freshness.
o Imerys’ solution is a press applied WBCC that enables flexibility to convert any bread pouch according the specific needs of the bread.
o By using water based barrier coating the bread bags are recyclable
PCC Precipitated Calcium Carbonate
Chemistry Ideal Range TD Vietnam
CaCO3 95-98% 98.50%
MgO 0.5-1.0% 0.05% max
MgO 0.5-1.0% 0.05% max
S 0.01-0.03% 0.02% max
Fe2O3 0.05-0.08% 0.02% max
Mn 0-30 ppm 30-40 ppm
Acid insolubles 0.3-0.6% 0.03-0.05%
LOI 42-43% 42-43%
Greyish limestone, Arcos, Brazil
Limestone from TLD Vietnam, Hai Duong Courtesy: Ms Thu Vu. TLD Vietnam
Chemistry suitable for PCC with range and details of a Vietnamese limestone deposit
LIMESTONE SUITABLE FOR PCC FOR PAPER
o Calcination of limestone in a kiln to drive off carbon dioxide and produce lime (CaO)CaCO3 + Heat » CaO (lime) + CO2 (Calcination)
o Lime delivered to Satellite plant, lime slaked (water added) CaO + H2O » Ca(OH)2 (Hydration or slaking)
o Carbon dioxide bubbled bubbled through in a carbonator to give precipitated carbonate Ca(OH)2 + CO2 » CaCO3 + H2O (Carbonation)
o Screening to further purify the PCC to remove coarse particles. Most grades have a minimum purity of around 98% with magnesium carbonate, silica and unconverted lime as the main contaminants
o In a satellite plamt PCC is then used in the manufacture of the paper. Particle shape and size (crystal engineered PCC) can be determined during the processing
Production of PCC from Limestone
Paper PCC 29%
$377.7
Specialty PCC 5%
GCC 6%
Talc 4%
Performance
Materials 56%
(mainly bentonite)
MTI - MINERALS BUSINESS 2017 $1.320 BILLION REVENUE
Performance Materials $734.8 (56%) Specialty Minerals $584.8 (44%)
(millions of dollars)
Paper PCC – 29% Revenue 29% of total
Specialty PCC is for non-paper uses
MTI (Specialty Minerals) is the largest producer of PCC for paper and mainly produce in Satellite plants at paper mills
Country Satellites Tonnage, kt
China 9 767
India 5 210
Indonesia 2 140
Japan 1 50
Malaysia 1 50
Thailand 3 200
USA 18 1565
Canada 2 150
Finland 2 165
France 3 140
Germany 1 75
Poland 1 75
Portugal 1 125
Slovakia 1 100
Brazil 5 300
South Africa 1 100
Total 56 4212
Asia 34%
North America 41%
Europe 16%
Brazil 7%
South Africa 2%
Source: MTI Annual Report 2018
56 PCC Satellite Plants for paper, 2018 – 4,212ktpa
• PCC is designed to provide optimum balance of paper properties including brightness, opacity, bulk, strength and improved printability.
o Research and development and technical service staff focuses on expanding sales from its existing and potential new satellite PCC plants, as well as, developing new technologies for new applications.
o These technologies include, among others, acid tolerant ("AT® ") PCC, which allows PCC to be introduced to the large wood-containing segment of the printing and writing paper market.
o New Yield®, a technology that converts a paper and pulp mill waste stream into a functional pigment for filling paper.
o FulFill® family of products, a system of high-filler technologies that offers papermakers a variety of efficient, flexible solutions which decrease dependency on natural fiber
o OPACARB® PCC, a family of products for paper coating
MTI LOOKING AHEAD
Location Paper Company Capacity, tpa
Dagang. Jiangsu APP, Gold East Paper (Jiangsu) Co. Ltd 100,000
Zhenjiang APP, Gold East Paper (Jiangsu) Co. Ltd 100,000
Suzhou Gold Hua Sheng Paper Co. Ltd 100,000
Yanzhou, Shandong Shandong Sun Paper Industry Co. Ltd 100,000
Jiaozuo City, Henan Henan Jianghe Paper Co. Ltd 22,000
Nanning, Guangxi Nanning Jiangxing Paper Ind. Co. Ltd 45,000
Zhejiang - PCC coating Zhengda Paper – cartonboard packaging 50,000
Changshu, Jiangsu UPM-Kymmene Corporation 100,000
Shouguang, Shandong Melium Paper Co (Chenming Paper) 150,000
Total 767,000
Source: MTI Annual Report 2018
Nine MTI PCC Satellite plants in China 2018
Country Company Plants PCC capacity (kt)
Europe
Austria Omya 2 122
Finland Omya 2 190
France Omya France 1 26
Netherlands Omya Netherlands 1 100
Portugal Omya Comital 1 30
Russia ooo Unikristall Komi 2 80
Sweden Omya AB 2 36
North America
USA Omya North America 1 200
South America
Argentina Omya Argentina 1 30
Brazil Mogi Guacu 1 100
Asia
India Omya India 1 60
South Korea Omya Hankuk Chemical 1 50
Total 16 1024
Source:
OMYA PCC
SATELLITE PLANTS
Region Mill Paper Company Tonnage, kt
Europe
Sweden Hosum M-real 50
USA Canton Blue Ridge Paper 54
Somerset Sappi Fine Paper 82
Bennettsville Domtar 36
Asia
China Yueyang, Hunan Tiger Forest & Paper 90
India Bhadrachalan ITC 20
Indonesia Riau Asia Pacific Resources 120
South America
Argentina Capitan Bermudes Cellulosa Argentina 10
Ledesma Libertador General 10
Brazil Limeira Ripasa 150
Santanesia Schweitzer-Maudut 15
Total 637
IMERYS PCC
Satellite Plants
Source:
Company Tonnage kt
MTI 4,212
Omya 1,024
Imerys 637
Okutama Kogyo 288
Schaeffer Kalk 217
Others 422
Total 6,800
MTI 62% Omya
15%
Imerys 10%
Okutama Kogyo 4%
Schaeffer Kalk 3%
Others 6%
PCC Satellite plants for paper, 2018
6.800 kt
Source: MTI,
92 82
33 20
1
4
5
14
6 13
62 63
1 1 3
0
10
20
30
40
50
60
70
80
90
100
1972 1988 1996 2001
%
KAOLIN GCC PCC TALC
NORTH AMERICA % OF FILLER USED FROM 1972-2001
Most of filler kaolin from Georgia, USA was replaced by
Specialty Minerals PCC Satellite plants
Source: Ian Wilson
Pigments used by Stora Enso
No TYPE FORM
1 Carbonates
- GCC (Ground Calcium Carbonate) marble Slurry
- Chalk Powder
- Limestone Powder
- PCC (Precipitated Calcium Carbonate) Slurry (CaO)
2 Kaolin
- Hydrous Slurry, Powder
- Calcined Slurry
3 Lime
4 Talc Slurry, Powder
5 Bentonite Powder
6 Special Pigments
Source: Ilari Valkeinen, Stora Enso, Presentation: Imformed Recycling 2016
STORA PAPER GRADES COATED AND UNCOATED
• Uncoated WFU (Wood Free Uncoated), SC (Supercalendered), Newsprint fillers
o Grade Type function - WFU; PCC, GCC bulk, opacity - SC; Kaolin and talc printing properties - Newsprint “PfR’ (Paper for Recycling) printing properties
Coated CWF (Coated Woodfree), CM (Coated Mechanical)
o - CWF; GCC printability - CM; Kaolin printability
Source: Ilari Valkeinen, Stora Enso, Presentation: Imformed Recycling 2016
1,256,000t 67%
368,600t 20%
18,300t 1%
1,000t 0%
214,500t 12%
8,100t 0%
Carbonate GCC+PCC
Kaolin
Talc
Special Pigments
Lime
Bentonite
Source: Ilari Valkeinen, Stora Enso, Presentation: Imformed Recycling 2016
Pigments, Lime and Bentonite for Stora Enso Total 1,867,000 tonnes
REPLACING
PE-FILMS IN CUPS
POUCHES FOR LOW TO
MEDIUM SHELF LIFE
POUCHES WITH HIGH
BARRIER PROPERTIES REPLACING
ALUMINIUM FOIL
CAPS, CLOSURES
& PACKAGING
COMPONENTS TRAYS
CAPS WITH
HINGES
LIDS
BIO
-BA
RR
IER
S
AN
D F
ILM
S
BIO
-CO
MP
OS
ITE
S
GLOBAL
MARKET SIZE
~80 Bn EUR
~25 Bn EUR
2019-2021
RIGID
CONTAINERS STRAWS
2021-2023 2023-2025
Storaenso target is 25% of sales from new products and services (2018 level is 15%)
Source: SmithersPira, internal analysis,, 21 March 2019.
Stora Enso Varkaus PM3 grade conversion rebuild
Growth in traditional retail and e-commerce is increasing global demand for sustainably produced packaging materials. In 2015, Stora Enso’s Varkaus mill in Finland converted their existing paper machine into a board machine to produce linerboard to better meet the market need for renewable packaging. They chose Valmet as their partner for this challenging rebuild.
STORA ENSO VARKAUS PM3
Grades AvantKraft Brown (kraft liner)and AvantKraft White Top (whitetop liner) Basis weights 80225 g/m2 Wire width 8 400 mm Design speed 1 200 m/min Annual capacity 395 000 t/a
CONVERSION FOR STORA ENSO
o Established in 1987 as WGCC supplier for paper coating o Leading producer of GCC in Japan o Four plants in Japan for WGCC, and one dries to produce powder WGCC. o Formed JV with SMI in 1996, and built one satellite plant in 2000
Slurry
Confidential
Fimatec Soma Plant
Main office at Kanda, Tokyo
Soma Plant + Production Technology Development
Fuji Plant +Paper Customer Support Lab
Okayama Plant +R&D
Shiraoi Plant
Plant Locations, Japan
KAOLIN COATING CLAY IMPORTS USA BRAZIL TOTAL
2007 750,000 250,000 1,000,000
2018 377,000 10,002 388,002
o Kaolin use in paper in 2018 Significant decrease in kaolin imports into Japan from USA and Brazil Less kaolin is used in coating formulations – formerly 50% blends with GCC now 20-30%
o GCC production for paper in 2018 Filler and coating applications around 910,000 tpa in 2018
o Paper Production in 2018 Japanese Coated paper production is decreasing year on year at 3-4% per year Coated board is increasing but slightly. FMT have narrow distribution type product.
Source for 2018 figures
Situation in Japan for paper
CHINA 100BC- AD105
KOREA JAPAN
600
TIBET 650
INDIA 600
IRAQ 793
EGYPT 1000
N. AFRICA 1100
SPAIN 1085
PHILADELPHIA 1690 BATTLE
TALAS 751
ENGLAND W. CAXTON
1476
GERMANY GUTENBERG
1447
SPREAD OF PAPER FROM CHINA
FRANCE 1190
YEAR 2011 2011 2012 2013 2014 2015 2016 2017 2018
Production (million t) 100.4 110.3 113.8 115.1 117.9 117.7 123.2 125.4 116.6
% change year on year 9.9 3.1 1.2 2.4 -0.1 4.6 1.8 -7.0
90.0
95.0
100.0
105.0
110.0
115.0
120.0
125.0
130.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
China P&B Production 2010-2018 (millions tonnes)
Significant drop of 7.0% in 2018
compared to 2017
Why is this?
Source: National Statistics Bureau, P.R. China
Reasons for the decline in Chinese paper industry output in 2018: 1. Internal reason: Strict environmental inspection led to o Small paper mills with heavy pollution have been forced to withdraw from
the market.
o 2018, there were 6,704 papermaking enterprises and 1,045 loss-making, up 23.5% year on year
o In 2018 losses reached 8 billion yuan, up 58.3% year-on-year
o Fuyang district of Hangzhou, the hometown of papermaking in China, has shut down 66 papermaking enterprises, eliminated 4.9 million tonnes of production capacity and cut 62.8% of the total papermaking capacity since November 2017,
2. External reasons: Sino-US trade friction, resulting in the import of raw materials blocked
o Since 2018, the overall price of waste paper (raw materials) has been affected by the tightening import policy and Sino-US trade friction.
o In In the first 11 batches of 2018, 114 companies were approved to import a total of 10.7901 million tons of waste paper, a sharp decrease of 61.61% compared with the 11 batches of 2017.
3. The decline of the industry boom, weak market demand o Profits of Chinese paper companies have fallen in 2018. o The total profit of papermaking enterprises dropped from 83.78 billion yuan in 2017 to
76.64 billion yuan in 2018, a decline of 8.5%. Data sources: 1. China environment news and China paper network "66 paper mills in Fuyang district of Hangzhou have been closed in a year and a half with a capacity of 4.9 million tons" in March 2019; 2. China business industry research institute ”Business data analysis of China paper industry in 2018 and market forecast in 2019" in February 2019 - acknowledge Eileen Hao and Angela Chen of Wisdom Intelligence
o MTI already has 9 satellite plants at paper mills in China.
o The waste stream in question is predominantly in China where environmental regulations prohibit burning or landfilling the material.
o NewYield®,provides papermakers with a number of benefits. It eliminates landfill costs, provides an effective paper filler and reduces emissions and energy costs.
o The prospects for these new technologies in China are bright and MTI are pursuing
more than 20 opportunities in the region for PCC filler and new satellites.
MTI in China developments
Source: MTI
The Confederation of European Paper Industries (CEPI)
Key statistics report 2017 Each year in July CEPI publishes the latest preliminary market and production data for the previous year. The latest data whether it is production, added-value or exports all indicate positive trends. Investment: more than 5bn, a 7.5% increase from 2016 Exports: up 5.4% Paper & Board consumption: up 0.5% Paper & Board production: up 1.5% (92.3 million tonnes) Employment: up 0.1% CEPI covers 18 countries – Austria, Belgium, Czech Republic, Finland, France, Germany, Hungary, Italy, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, The Netherlands and UK.
Newsprint, 6.1%
Uncoated Papers 15.2%
Coated Papers, 13.5%
Sanitary and Household
8.1%
Case Materials 32.6%
Wrappings 4.6%
Other packaging
Papers 15.3%
Other Paper & Board
4.6%
Production of P&B by grade in CEPI Countries 2018 – 92.3 million tonnes
2018 Production 92.3 million tonnes (compared with 2017)
Packaging +1.2% (52.5%) Sanit Hou’ +1.0% (8.1%)
Other P&B = 4.6% Graphic -1.4% (34.8%)
=
o Uncoated WF Mechanical +1.2% o Coated CM paper unchanged o Uncoat’ WF (office paper) -2.5% o Coated WF grades -7.4% o Newsprint (newspapers) -8.9%
www.cepi.org/topics/statistics-
Increased production of packaging and board offets the decline in
production of graphic papers
o The production stability observed in Europe contrasts with the reduced global paper and board production, -0.6% in 2018 compared to 2017, to 417 million tonnes according to very first estimates.
o This reduction was mainly driven by China, whose production decreased by close to 4%. Paper and board production in Japan, South Korea and the United States has also declined.
o Production in Canada, Russia and several emerging countries, India, Indonesia and Mexico increased.
The Confederation of European Paper Industries (CEPI) Preliminary figures
National Statistics Bureau, P.R. China
Production in 2018 in China was 116.6mt, a decrease of 7% from 2017
o World demand for paper and board is forecasted to grow 1.3% pa reaching 486 million tonnes in 2030
Consumption growth per paper grade 2016A-2030F
Containerboard +62 million tonnes +2.4%
Fine papers - 10 million tonnes -0.3%
Cartonboard +15 million tonnes +2.0%
Tissue +17 million tonnes +2.9%
Newsprint - 8 million tonnes -2.8%
Source: RISI, Valmet Paper business line, Capital Markets Day, September 18, 2018
Valmet forecast for paper and board to 2030
0
50,000
100,000
150,000
200,000
250,000
2005 2010 2015 2020 2025 2030f
CONTAINERBOARD FINE PAPERS CARTONBOARD TISSUE NEWSPRINT
Global consumption of P&B 2016-2030f (ktpa)
130,000 140,000 152,000 180,000
200,000 230,000
111,000 110,000
105,000
100,000 90,000
80,000 40,000 50,000 55,000
60,000 70,000
75,000
25,000 30,000
35,000
40,000
50,000
55,000
40,000 33,000
30,000
25,000
20,000
15,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2005 2010 2015 2020 2025 2030f
Consumption for paper and board 2005-2016 and forecast until 2030
CONTAINERBOARD FINE PAPERS CARTONBOARD TISSUE NEWSPRINT
China 28%
Rest of Asia 19%
North America 20%
Europe CEPI-18
22%
Rest of Europe 4%
Latin America 5%
ROW 2%
Global estimated production
of Paper and Board (based on 420 million tonnes)
Thanks to Mike and Ismene and all others for a very
good meeting