Domestic price of paper products and paperboard

IBISWorld expects the domestic price of paper products and paperboard to drop by 0.6% in 2025-26, to reach 145.6 index points. Domestic prices are expected to decline as the market for paper products and paperboard continues to recover from the peak levels witnessed in 2022-23. The volume of wood harvested in Australia is expected to expand by the largest amount since 2016-17, as a number of wood plantations are set to be harvested. This will push down the price of wood pulp in the Australian market, as supply conditions improve. The domestic price of paper products and paperboard will also face downwards pressure as wood pulp importers benefit from improved purchasing power, driven by an expected appreciation in the Australian dollar against a basket of foreign currencies. This impact will be slightly offset by an anticipated rise in the world price of wood pulp. However, with supply conditions in the local economy set to improve, paper product manufacturers are likely to avoid some of these price rises from foreign suppliers.

Movements in the Australian dollar have a significant impact on domestic pricing. When the Australian dollar depreciates, the price of imported inputs for paper products and paperboard increases, forcing local manufacturers to raise prices. A decline in the trade-weighted index across 2021-22 and 2022-23 aligned with growth in the world price of wood pulp, reducing the purchasing power of Australian manufacturers. This pushed up the domestic price of paper products, as input costs expanded. Additionally, the fallout from the pandemic compounded price increases over this time period. Lockdown policies led to consumer stockpiling of sanitary products, such as toilet paper and tissues, with demand outstripping supply. Disrupted supply chains and ongoing factory shutdowns in parts of Asia dampened imports and exacerbated shortages in paper products and paperboard during the peak of the pandemic, further pushing up prices. This perfect storm of conditions resulted in the index peaking at 148.1 index points in 2022-23, including an 18.7% expansion in 2022-23.

Demand for paper products has fluctuated over the past five years, although it has trended downwards overall. The performance of pulp, paper and paperboard manufacturers has been affected by the contraction of major downstream markets, such as the printing and publishing industries, as more consumers shift from printed reading materials to digital media. Furthermore, increased consumer awareness of environmental issues and trends toward paperless offices have further depleted demand. In response, some domestic manufacturers have developed higher value-added products such as recycled and low-chemical papers, which typically attract a premium price.

While the domestic price of paper products and paperboard has declined since 2022-23, prices remain significantly elevated compared to historic levels. Paper product prices dropped slightly in 2023-24 as the trade-weighted index improved marginally. However, the supply chain has continued to face pressure as declining volumes of wood harvested have made procurement of inputs difficult for paper product manufacturers. The world price of wood pulp has also been increasing between 2023-24 and 2025-26, providing minimal cost benefits for manufacturers looking towards foreign suppliers for wood pulp. Overall, the domestic price of paper products and paperboard is expected to increase by a compound annual rate of 4.9% over the five years through 2025-26.