North American Pulp and Paper Outlook: September 2019 Chief Economist

North American Pulp and
Paper Outlook
SEPTEMBER 2019
ROD YOUNG
Chief Economist
2019 | Fastmarkets | RISI Outlook Presentation 1

Global economy growing moderately, risks heightened
Europe
USA 2.5 %
1.9 % 1.8 %
2.9 % China
2.6 % 1.4 %
2.3 % 1.1 % 6.9 %
1.8 % 0.9 % 6.7 %
1.6 % 6.6 %
1.1 %
6.2 %
6.1 %
2016 2017 2018 2019 2020 2021 6.0 %
2016 2017 2018 2019 2020 2021
Latin America 2.8 %

2016 2017 2018 2019 2020 2021
1.7 %
1.1 % 0.9 % 0.8 %
2016 2017 2018 2019 2020 2021

-0.9 %
Annual real GDP growth
2019 | Fastmarkets | Macroeconomic Outlook 2

US job growth continues
Monthly employment change, total non-farm, thousands; six-month moving average; 24-month moving average
600
400
200
-200
-400
-600
-800
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Employment change Six-mo. mov. avg. (employment change) 24-mo. mov. avg. (employment change)

Dollar regained strength in 2018, remains strong
Trade weighted US dollar index: broad, goods, 1997=100
140
130
120
110
100
90
80
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Chinese GDP trending lower, 2019 a slowdown
Real GDP growth, annual percentage change
16%
14%
12%
10%
8%
6%
4%
2%
0%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Global P&W demand dropped 2.5% in 2018
130,000 8%
World P&W demand %ch 6%

120,000
2.5
4%
2%
Thousands of tonnes
110,000
0% Million tonnes of demand decline in
2018
100,000 -2%
-4%
90,000
-6%
-8%
12%
Smaller global market in 2018 versus
80,000
2010
-10%
70,000 -12%
1.6
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Millions tonnes of average demand

declines in 2011-2017 and 2012-2014
2019 | Fastmarkets | RISI Outlook Presentation

Is global graphic paper demand accelerating
down?
TONNAGE DECLINES STILL NOT SHRINKING DESPITE GREATLY DIMINISHED MARKETS
Printing & writing Newsprint

0 100% 0 100%
-500
90% 90%
-500
-1,000
Thousands of tonnes
Thousands of tonnes
80% 80%
-1,000
-1,500
70% 70%
-2,000
-1,500
60% 60%
-2,500
-2,000
50% 50%
-3,000
Tonnage decline % of 2010 demand level
Tonnage decline % of 2010 demand level
-3,500 40% -2,500 40%

P&W Demand Growth in 2019-2021
Thousand Tonnes, Percentage Per Year EUROPE
-1.6%
-3.4%
NORTH AMERICA -4.5% -4.0% -5.4%
-1.8% ASIA
-3.6% -4.0%
-7.2% -6.9%
1.6%
17 18 19 20 21
-0.6% -0.5%
MIDDLE EAST -1.8% -1.5%
17 18 19 20 21 3.2%
-1.2% 0.5% 0.3% 17 18 19 20 21
-7.4%
17 18 19 20 21
AFRICA
LATIN AMERICA
0.1% 0.5% 0.9%

-0.6% 0.9% 0.9%
-1.0% 0.6%
0.4%
0.2% OCEANIA
17 18 19 20 21 -4.6% -4.6% -4.7%
17 18 19 20 21 -4.8%
-5.3%
Three-Year Total Global Growth
-6.58 -2.3% 17 18 19 20 21
Million Tonnes Average Percent Change

Global ADD/CVD duties on cut size copy paper
ADD DATES ADD CVD DATES
Australia USA 1) Navigator tariff changed
from 8% to 37%, then
Austria 21.6% 2018 Australia Paper 222% 2015
back down to 1.75% in
Finland 16.9% 2018 Suzano 17% 2015 October 2018.
Russia 4.2% 2018 Navigator (1) 1.75% 2015 2) APRIL Indonesia ADD
Slovakia 17.4% 2018 APRIL Indonesia (2) 2% 4% 2015 revised up from 2% in
March 2019.
South Korea 34.2% 2018 APP Indonesia 17% 109% 2015
China 3.1% to 34.4% 2017 Asia Symbol 84% 7% 2015
Indonesia 12.6% to 45.1% 2017 APP China 149% 7% 2015
Brazil 2.9% 2017 UPM China 149% 177% 2015
Thailand 13.4% to 23.2% 2017 Sun Paper China 149% 177% 2015
Pakistan India
$855/tonne
Japan 39.1% 2018 Indonesia minimum price 2018
Thailand $855/tonne 2018

Brazil 35.9% 2018 minimum price
Singapore $855/tonne 2018
China 21.9% 2018 minimum price
Thailand 2% 2018 Mexico
Indonesia 10.62% to 20.66% 2018 Brazil 38% 2013

Despite tariffs, cut size imports back near peak
market share in USA
US cut size demand by source
400 30%
350
Domestic supply Offshore imports Offshore import share (R.)
25% 22.5%
Offshore share of US cut size in 2014
300
Thousands of tonnes
20%
250
12.9%
200 15%
150
10% Offshore share of US cut size in 2018
100
5%
50
0 0%
2012 2013 2014 2015 2016 2017 2018 2019
2019 | Fastmarkets | RISI Outlook Presentation

Effect of tariffs on US cut size imports
IMPORTS FROM FIVE TARIFF TARGET COUNTRIES IMPORTS FROM NON-TARIFF COUNTRIES
300 10%
900 25%
9%
800
250
20% 8%
Thousand tonnes
700
Share of US demand
Share of US demand
7%
Thousand tonnes
600 200
15% 6%
500
150 5%
400
10% 4%
300 100
3%
200 5% 2%
50
100 1%
0 0% 0 0%
Portugal Indonesia Israel South Korea Finland

China/Hong Kong Brazil Thailand Colombia All others
Australia Five-country import share Import share
2019 | Fastmarkets | RISI Outlook Presentation 2019 estimated based on 5 months of US customs data. 11
Indonesia shifting US exports to rolls after tariff
hike
Cut size Offset rolls Other (rolls or sheets) Rolls share of total (R.)
250
200
60%
50%
50%
Share for rolls for Indonesian exports to
USA in 2019
40%
Thousand tonnes
150
30%
100
20%
50
10%
0 0%
2019 | Fastmarkets | RISI Outlook Presentation 2019 estimated based on 5 months of US customs data.
Global coated paper machine shuts/conversions,
2019-2020
COMPANY MILL COUNTRY CAPACITY DATE COMMENTS
(TONNES/YR)
Arctic Paper Grycksbo Sweden -45,000 CFS Q1 2019 Shut PM7
Feldmuehle Uetersen Germany -80,000 CFS Q1 2019 Shut PM2
Lecta Condat France -230,000 CFS 2019 Convert a PM to specialty
Stora Enso Oulu Finland -1,080,000 CFS End of 2020 Shut PM6, convert PM7 to kraftliner
Arjowiggins Bourray, Besse-sur-Braye France -348,000 CFS 2019 Q1 Mill closure
UPM Plattling Germany -155,000 CME 2019 Q3 Shut PM10
ND Paper Biron USA -103,000 CME Q3 2019 Shift PM25 to packaging
New-Indy Catawba USA -310,000 CME n/a Potential conversion to packaging
Verso Luke USA -408,000 CFS 2019 Q3 Shut by June 30th
Nippon Paper Ind. Fuji Japan -33,000 CME 2019 Shut PM11
APP Tijwi Kimia Indonesia -245,000 CFS 2019 Convert to packaging
Hokuetsu Niigata Japan -161,000 CFS 2019 Close by end of June
Nippon Paper Ind. Yufutsu Japan -88,000 CFS 2020 Mill shut
Daio Paper Mishima Japan -150,000 CFS 2019 Conversion to kraft papers and paperboard
Global totals -601,000 CME

-2,835,000 CFS
-3,436,000 total
Note: There are currently no major coated paper capacity expansions occurring globally.

Global uncoated woodfree prices
1,500 US 20 lb copy paper W. Europe A4-B

HOW LARGE OF A GLOBAL
PREMIUM CAN THE USA 1,400 Brazil domestic cut size Southeast Asia 70 gsm UWF
MAINTAIN?
1,300
• Brazilian prices can jump above US
levels due to currency swings, 1,200
premium versus offshore imports.
USD/tonne
1,100
• US and European prices have
historically been close, but wide gap 1,000
has re-opened due to tighter US
market. 900
• Asian gap with US prices at all-time 800

peak of more than $300/tonne in
early 2019. 700
600

Signs that printing & writing profitability has
peaked
MARKETS HAVE ALREADY STARTED TO WEAKEN
2-5%
• Weak demand, more capacity startups and falling costs for fiber in Asia
• US producers forced to roll back some of 2019 UWF price hike despite G-P closure
AFTER SPIKING, MILL COST INFLATION IS ABATING Mexican USD P&W prices down 2-5%
y-o-y in 3Q19
• Pulp prices in decline
• Energy down sharply, albeit starting to recover
RISE IN IMPORTS
• Global oversupply will increase competition
• Stronger US dollar and some tariff reductions

5-15%
Brazilian P&W prices down 5-15% in
REDUCED CONVERSION OPPORTUNITY first half of 2019
• Less room for new containerboard machines, global economic risks

Next moves for US printing & writing prices will be
down
US PRICES 5-12% ABOVE $1,300

YEAR-AGO LEVELS IN EARLY
2019 $1,200
• No room for any further gains even

with major capacity closures. $1,100
• Prices for most grades have already

begun to erode. $1,000
US dollars per cwt
• Any potential recession likely to

trigger larger demand declines and $900
result in price drops.
$800
$700
2011 2012 2013 2014 2015 2016 2017 2018 2019
SC-A Ctd. No. 5 40 lb Ctd. No. 3 60 lb. Unc. offset 50 lb. Cut size copy

North American containerboard producers are taking economic
downtime to address slower demand growth
33 4%
32 3%
31 2%
30 1%
Million tonnes
29 0%
28 -1%
27 -2%
26 -3%
25 -4%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Demand Demand % change Corrugated boxes % change
2019 | Fastmarkets | Global Containerboard and Boxboard Outlook 17

Robust capacity expansion will keep North American
containerboard operating rates depressed
2,000 97%
96%
1,500
95%
1,000
Million tonnes
94%
500
93%
0
92%
-500
91%
-1,000 90%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Change in demand Change in capacity Change in true demand Operating rates

Slow growth in North American boxboard demand and supply
400 95%
94%
300
94%
200
93%
Million tonnes
100 93%
0 92%
92%
-100
91%
-200
91%
-300 90%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Change in demand Change in capacity Operating rates

Snapshot of 2018 Asian containerboard demand and supply
Chinese demand fell an estimated 3% in 2018
• Deceleration in economic growth
• Some substitution from paper to plastics
• E-commerce working to reduce its packaging footprint
• Significant uncertainty in the level of decline
Rest of Asia saw fairly steady growth at 3.8% in 2018

• Compared to average of 4.0% per year in 2016-2017
Chinese output tumbled while net imports soared

• Chinese production fell an estimated 5% or 2.5 million tonnes
• Net imports jumped almost 1.1 million tonnes
• Rest of Asia supplied much of this, with net imports climbing 800,000 tonnes
Entering 2019, demand conditions have been sluggish

• Economic weakness and effects of lingering US-China trade war

Chinese RCP policies are changing the way
companies are operating
Constrained fiber supplies driving up imports and

reducing production
• RCP imports fell from 25.7 million tonnes in 2017 to 17.0 million tonnes in 2018.
• Expected to fall to 10-12 million tonnes in 2019 and then 5-6 million tonnes in 2020 before
total ban goes into effect in 2021.
Large companies are making investments in light of the

new policies
• Numerous projects in the works in Vietnam, Malaysia, Laos and India
Previously planned projects apparently being delayed

• Due to economic weakness and effects of lingering US-China trade war

The smaller exporters to the world reaped most of
the benefits from the shift in Chinese policy
(net exports to world)
Nontraditional containerboard exporters Traditional containerboard
5.0 exporters
12
4.5
4.0
10
3.5
3.0 8
Million tonnes
Million tonnes
2.5
6
2.0
1.5 4
1.0
2
0.5
0.0 0
10 11 12 13 14 15 16 17 18 19 20 21 10 11 12 13 14 15 16 17 18 19 20 21
Japan South Korea Taiwan Indonesia North America Western Europe Brazil
Thailand India Other Asia South Africa Oceania
2019 | Fastmarkets | Global Packaging Outlook 22

China’s containerboard market adjusting to new RCP policies
Year-to-year change
DEMAND WILL DROP AGAIN IN 2019 3.0 95%
AND THEN MOVE UP IN 2020

2.0 90%
• Weak economy
• Dictated by fiber balance

1.0 85%
Million tonnes
PRODUCTION WILL FALL AND NET
IMPORTS WILL CLIMB 0.0 80%
• Output constrained by fiber
• Market attractive to other Asian suppliers -1.0 75%
• But can imports continue to climb that much?

-2.0 70%
OPERATING RATES ARE TUMBLING
• Level dependent on capacity assumptions -3.0 65%
2012 2013 2014 2015 2016 2017 2018 2019 2020
Production Net imports Demand Operating rate

The North American tissue market has been strong
recently
4.0
Average growth accelerated from 1.5% to 1.95% per year
• The AfH sector in particular
benefitted from the strong 3.0
economy, low gasoline prices
Growth rate, percent per year

and changing lifestyle of
2.0
younger generations.
1.0
0.0
-1.0
-2.0
2019 | Fastmarkets | Global Tissue Market Outlook 24

US tissue import growth, 2009-2018
Average growth rate, 2009-2018: 5.4% per year

1,200
• Canada continues to be the
main US import source for
1,000
tissue, but China has taken
Imports, thousand tonnes

second place ahead of Mexico
800
and Indonesia.
• However, imports tariffs will 600
restrict imports from China;
the first five months of 2019 400
show decreases in the volume
of Chinese tissue imported by 200
the USA.
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Canada China Mexico Indonesia Italy South Korea Germany All others

Expected growth in US tissue consumption by
business sector
Market volume
5.0
Minor growth of 0.4% per year
• At-Home retailer labels will
4.0
show the strongest growth,
while At-Home branded
Growth of 2.3% per year
volume growth will remain
Million tonnes
3.0
moderate.
• AfH growth will rise above Growth of 5.9% per year
2.0
average At-Home growth.
1.0
0.0
AH brands Retailer labels AfH
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Major tissue capacity changes in North America,
2018-2021
2018
• Georgia-Pacific, Augusta, GA, USA -31,000 t/a
• Sofidel America, Circleville, OH, USA (2 x NTT) 140,000 t/a
• Kimberly-Clark, Fullerton, CA, USA -60,000 t/a
• First Quality Tissue, Anderson, SC, USA (TAD PM) 64,000 t/a
113,000 t/a
2019
• Soundview Paper, Elmwood Park, NJ, USA (closure after two fires) -110,000 t/a
• Clearwater Paper, Shelby, NC, USA (NTT PM) 64,000 t/a
• Irving Consumer Products, Macon, GA, USA (TAD PM) 64,000 t/a
• Cascades Tissue Group, Scarborough and Whitby, ON, Canada (mill closures) -61,000 t/a
• Soundview Paper, Elmwood Park, NJ, USA (restart of PM11) 60,000 t/a
• Georgia-Pacific Corp., Crossett, AR, USA (closure of the oldest PM) -30,000 t/a
• Georgia-Pacific Corp., Palatka, FL, USA (TAD PM) 72,000 t/a
• Sofidel America, Inola, OK, USA 60,000 t/a
119,000 t/a
2020-2021
• First Quality Tissue, Lock Haven, PA, USA 64,000 t/a
• Sofidel America, Inola, OK, USA 60,000 t/a
• Georgia-Pacific, Naheola, AL, USA (replacement) 8,000 t/a
• Kruger Tissue, Brompton, Sherbrook, QC, Canada (TAD PM) 70,000 t/a
27
2019 | Fastmarkets | Global Tissue Market Outlook 202,000 t/a
Net capacity change* and tissue operating rate in
North America
400 100
A lot of new capacity coming on stream that will affect 2019-2020; utilization rate
• The outlook is surprisingly
will head south but only slightly if no further closures occur
good despite the number of
projects, but a lot depends on 300
how much tariffs on imports 95
Capacity utilization, percent

from China change the net 200
Thousand tonnes
trade balance.
• We assume a conservative 100 90
decline in net imports in this
forecast (trend change).
0
85
-100
-200 80
Capacity change Capacity utilization
* Based on committed projects only.

Pulp markets recently completed an historical run…
Cumulative price change Net price / high average variable cost
700 1.95
Dec-93 to Nov-95
Cumulative price change, US dollars per tonne
Dec-85 to Mar-90
600 Mar-16 to Oct-18
Net price / high average variable cost

1.75
500 Dec-85 to Mar-90

Mar-16 to Oct-18
1.55
400
1.35
300
1.15
200
100 0.95
0 0.75
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
Consecutive months Consecutive months
2019 | Fastmarkets | World Pulp Outlook 29

Producer inventories reach a record high
Produce inventories, days of supply
75
65
55
45
35
25
15
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
BHK Average BHK (2004-10 = 36.4, 2011-18 = 42.7) BSK Average BSK (29.7)
Source: PPPC, Fastmarkets RISI.

Domestic pulp prices in China searching for a
bottom
NBSK prices in China, $/tonne BEK prices in China, $/tonne
1,000 850
950 800
900
750
850
800 700
750 650
700 600
650
550
600
550 500
500 450
12 13 14 15 16 17 18 19 12 13 14 15 16 17 18 19
NBSK domestic resale* NBSK net import BEK domestic resale* BEK net import
* Reflects net renminbi domestic resale price converted to US dollars, excluding VAT and logistics costs.

BHK cash cost curve from Mill Intelligence
LATIN AMERICAN
PRODUCERS DOMINATE THE
LOW END OF THE COST
CURVE
• Latin American producers benefit
from low-cost wood and the
exchange rate
• Higher-cost facilities tend to be

much smaller and located in Asia
and the Northern Hemisphere
■ Africa ■ Asia ■ Europe ■ Latin America ■ North America

Limited market pulp capacity expansion until 2021
3.5
3.0
Market pulp capacity growth
2.5
2.0
1.5
1.0
0.5
0.0
2017 2018 2019 2020 2021
2019 | Fastmarkets | World Pulp Outlook

Pulp market could remain weaker for longer
0.93
0.92
0.91
0.90
0.89
0.88
0.87
0.86
11 12 13 14 15 16 17 18 19 20 21
Shipment/capacity adj. Shipment/capacity ratio (R)

China and Other Asia: RCP imports
Million tonnes
35
OTHER ASIA CATCHING UP WITH 30

CHINA
25
20
15
10
0
2012 2014 2016 2017 2018
China Other Asia
2019 | Fastmarkets | Outlook for Global RCP Markets 35

OCC prices in different regions
CHINESE PAPER COMPANIES

350 3,500
FACING HIGH RECYCLED FIBER
COSTS 300 3,000
• Before July 2017, one set of OCC prices
250 2,500
• Now, two sets of prices: Chinese price and
prices outside of China 200 2,000
• Sharp drop in US and European OCC
prices 150 1,500
• Low OCC import prices in Southeast Asia

100 1,000
• Domestically collected OCC became quite
expensive in China due to the overall 50 500
recycled fiber shortage issue in 2018
0 0
• Recent decline in OCC prices globally 2016 2017 2018 2019
because of the weak paper packaging
markets and reduction in Asian RCP US average, USD/tonne (L) German OCC, EUR/tonne (L)
purchases Chinese imported #12, USD/tonne (L) Asian imported US OCC, USD/tonne (L)
Chinese domestic, RMB/tonne (R)

China’s investments in recycled pulp
ANNOUNCED AND ESTIMATED RECYCLED PULP PROJECTS
• Nine Dragons • Jingxing Paper: Malaysia: 550,000 tonnes per year

• Fairmont, USA: About 220,000 tonnes per year (started up • Shanying
already)
• Wickliffe, USA: 120,000 tonnes per year
• Biron, USA: 650,000 tonnes per year
• Malaysia: 550,000 tonnes per year
• Rumford, USA: About 400,000 tonnes per year
• Other
• India: 500,000 tonnes
• Lee & Man
• Myanmar: 680,000 tonnes per year
• Malaysia: 550,000 tonnes per year
• Sun Paper: Laos: 400,000 tonnes per year

North American Pulp and Paper Outlook: September 2019 Chief Economist

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North American Pulp and

2019 | Fastmarkets | RISI Outlook Presentation 1

Latin America 2.8 %

2016 2017 2018 2019 2020 2021

Annual real GDP growth

2019 | Fastmarkets | Macroeconomic Outlook 2

2019 | Fastmarkets | Macroeconomic Outlook 3

2019 | Fastmarkets | Macroeconomic Outlook 4

2019 | Fastmarkets | Macroeconomic Outlook 5

World P&W demand %ch 6%

Millions tonnes of average demand

2019 | Fastmarkets | RISI Outlook Presentation

Printing & writing Newsprint

2019 | Fastmarkets | RISI Outlook Presentation 7

0.1% 0.5% 0.9%

Million Tonnes Average Percent Change

China 3.1% to 34.4% 2017 Asia Symbol 84% 7% 2015

Indonesia 12.6% to 45.1% 2017 APP China 149% 7% 2015

Brazil 2.9% 2017 UPM China 149% 177% 2015

Thailand $855/tonne 2018

Indonesia 10.62% to 20.66% 2018 Brazil 38% 2013

2019 | Fastmarkets | RISI Outlook Presentation

Portugal Indonesia Israel South Korea Finland

Feldmuehle Uetersen Germany -80,000 CFS Q1 2019 Shut PM2

Lecta Condat France -230,000 CFS 2019 Convert a PM to specialty

Arjowiggins Bourray, Besse-sur-Braye France -348,000 CFS 2019 Q1 Mill closure

UPM Plattling Germany -155,000 CME 2019 Q3 Shut PM10

ND Paper Biron USA -103,000 CME Q3 2019 Shift PM25 to packaging

New-Indy Catawba USA -310,000 CME n/a Potential conversion to packaging

Verso Luke USA -408,000 CFS 2019 Q3 Shut by June 30th

APP Tijwi Kimia Indonesia -245,000 CFS 2019 Convert to packaging

Hokuetsu Niigata Japan -161,000 CFS 2019 Close by end of June

Global totals -601,000 CME

2019 | Fastmarkets | RISI Outlook Presentation 13

1,500 US 20 lb copy paper W. Europe A4-B

• Asian gap with US prices at all-time 800

2019 | Fastmarkets | RISI Outlook Presentation 14

• Energy down sharply, albeit starting to recover

• Stronger US dollar and some tariff reductions

• Less room for new containerboard machines, global economic risks

2019 | Fastmarkets | RISI Outlook Presentation 15

US PRICES 5-12% ABOVE $1,300

• No room for any further gains even

• Prices for most grades have already

• Any potential recession likely to

2019 | Fastmarkets | RISI Outlook Presentation 16

2019 | Fastmarkets | Global Containerboard and Boxboard Outlook 17

2019 | Fastmarkets | Global Containerboard and Boxboard Outlook 18

2019 | Fastmarkets | Global Containerboard and Boxboard Outlook 19

Rest of Asia saw fairly steady growth at 3.8% in 2018

Chinese output tumbled while net imports soared

Entering 2019, demand conditions have been sluggish

2019 | Fastmarkets | Global Containerboard and Boxboard Outlook 20

Constrained fiber supplies driving up imports and

Large companies are making investments in light of the

Previously planned projects apparently being delayed

2019 | Fastmarkets | Global Containerboard and Boxboard Outlook 21

2019 | Fastmarkets | Global Packaging Outlook 22

DEMAND WILL DROP AGAIN IN 2019 3.0 95%

AND THEN MOVE UP IN 2020

• Dictated by fiber balance

• Market attractive to other Asian suppliers -1.0 75%

• But can imports continue to climb that much?