Wood Fiber Prices Down 10% From Peak Numbers in 2011
May 24, 2013 | 10:10 pm UTC

Wood Fiber Prices Down 10% From Peak Numbers in 2011SEATTLE, USA. The costs of wood fiber for the world’s pulp mills have trended downwardthe past two years because of reduced pulp and paper production, and in some regions, asa result of higher supply of lower-cost fiber. This trend continued in the 1Q/13 when theHardwood Wood Fiber Price Index (HFPI) fell by 1.1 percent to $103.66 per oven-dry metric ton (odmt), which was 12 percent below the all-time high in the 3Q/11, as reported by the Wood Resource Quarterly.

However, the price trends were mixed in the 1Q/13, with hardwood fiber prices lower inAsia and Eastern Canada and slightly higher in Europe and Latin America as compared tothe 4Q/12. Eucalyptus pulpwood prices in Brazil have fallen more than in most other regions the past two years, with 1Q/13 prices being down over 30 percent since 2011.This dramatic decline has resulted in Brazilian pulp mills now enjoying the fourth lowestwood fiber costs in the world, behind Russia, the US South and Chile, respectively.

The Softwood Wood Fiber Price Index (SFPI) in the 1Q/13 was practically unchangedfrom the 4Q/12 at $99.90/odmt. The SFPI has inched downward for seven consecutivequarters and is currently down 8.8 percent from the most recent peak in 2Q/11, according to the WRQ. The biggest changes in the 1Q/13 in US dollar terms were the declines inchip prices in Eastern Canada, Japan, Western Canada and the US Northwest. The biggest increases occurred in France and Germany.

There has been an increased supply of residual chips from the sawmilling sector that hasturned up the production levels over the past six months. This is the major reason for thedeclining prices in Canada and the US. Prices for wood chips in Canada have fallen morethan 15 percent in just over a year.

With improved markets for softwood lumber in the US, it is likely that the availability oflower-cost wood fiber for the pulp industry throughout North America will continuethrough the rest of 2013 into 2014.

Source: Wood Resources International





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