SEATTLE - Wood chip prices in British Columbia have fallen 16 percent over the past six months, the second biggest price decline in North America, after Alberta. Temporary pulpmill shutdowns have led to lower wood fiber demand and sharply reduced prices for market pulp, resulting in the biggest price decline for chips since 2008, says the North American Wood Fiber Review.
Just when many sawmills were marginally increasing their lumber production across Eastern Canada, several had to temporarily curtail their operations due to an excess of residual chips that they were unable to move.
Pulpmill fiber buyers initially bought residual chips from all sawmills, says American Fiber Review. But as the quarter progressed, they supplied their needs from their own company-integrated sawmills rather than buying from independent sawmills, leading to price declines.
During the pst quarter, the biggest declines in wood chip prices were seen in the U.S. Northwest, the Great Lake States and in Eastern Canada. "In the U.S. South, softwood chip prices have stayed remarkably stable for almost two years," says North American Wood Fiber Review. "This is a testament to the well-functioning market dynamics that can balance the fiber supply and demand in an efficient manner despite recent droughts, wildfires and flooding."
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