The Global Forest Industry in the 4Q/2012

Global Timber Markets

• The Global Sawlog Price Index (GSPI) increased by 1.5 percent to US$83.52/m3 in the 4Q/12 after having declined for five consecutive quarters. This time marked the longest period of continuous decline since the Index was established in 1995, falling continuously from the all-time-high in the 2Q/11 through the 3Q/12. Log prices were up in US dollar terms in practically all 17 regions that are included in the GSPI. click image to zoom

Global Pulpwood Prices

• Wood fiber prices trended downward in the local currencies in many of the key pulpproducing countries of the world in the fourth quarter. The declines were mainly the result of an increased supply of softwood fiber in regions with extensive lumber production.

• As a result of a weakening US dollar, conifer fiber prices actually increased in US dollar terms in a number countries and the Softwood Wood Fiber Price Index (SFPI) was up slightly (+0.1%) in the 4Q/12 to $100.13/odmt. The biggest increases from the 3Q to the 4Q occurred in Eastern Canada, Finland, France and New Zealand.

• Hardwood fiber price movements were mixed, with hardwood log prices generally trending downward in many of the key hardwood pulp producing regions in both local currencies and in US dollar terms. This resulted in a decline in the Hardwood Wood Fiber Price Index (HFPI) to US$104.80/odmt in the 4Q/12. This was down 1.5 percent from the previous quarter and 7.8 percent from the 4Q/11. click image to zoom

Global Pulp Markets

• After market pulp production fell during the first six months of 2012, the bottom was reached during the summer and the trend turned upward in the fall. In December, world production was estimated to be slightly over eight percent higher than in December of 2011, according to Hawkins Wright Ltd.

• There has been much uncertainty in the global pulp market the past 12 months, with contract prices fluctuating and price discounts for spot volumes entering into the 20- 25 percent range. Market pulp prices moved up in the 4Q/12 after having declined during the 3Q, and this upward trend continued into early 2013.

Global Lumber Markets

• Global trade of softwood lumber fell in 2012 by an estimated 2.5 percent with practically all of the major lumber-consuming countries reducing importation. This decline came after two years of increased trade.

• Lumber production in the US improved throughout 2012 with total output for the first 11 months being eight percent higher than the same period in 2011, according to WWPA.