Global Timber Markets

• With global demand for lumber declining in many regions during the summer and fall, log prices continued to trend downward. The Global Sawlog Price Index (GSPI) fell for the fifth consecutive quarter to $81.94/m3. The Index was down only 1.1 percent from the 2Q/12, which was the smallest quarter-over-quarter decline since world prices started to fall in early 2011. Sawlog prices are now back down to levels where they were two years ago.

Global Pulpwood Prices

• Wood fiber prices fell in the local currencies in most of the regions covered by the WRQ in the 3Q. However, because the US dollar weakened against most currencies, wood prices in US dollar terms did not decline as much this quarter.

• The Softwood Wood Fiber Price Index (SFPI), which is based in US dollars, was down another 0.5 percent from the 2Q/12 to US$100.05/odmt. It was the fifth consecutive quarterly decline and the index has now come down 8.7 percent since early 2010. The biggest price declines were seen in Northwest US, Germany and Russia.

• Hardwood fiber prices started to increase in some regions in the 3Q, which resulted in the first increase of the Hardwood Wood Fiber Price Index (HFPI) in over a year. The Index increased by $1.56/odmt from the 2Q/12 price to $106.44/odmt in the 3Q/12. Hardwood fiber prices increased the most in Russia, Eastern Canada and Brazil.

Global Pulp Markets

• The pulp market started to recover this fall after having been in decline for over a year. World shipments increased 11% from July to September.

• Softwood pulp (NBSK) prices have trended downward for more than a year from their record highs in the summer of 2011. This relatively long-lasting price decline seems to have come to an end this fall and higher prices are currently being negotiated.

• Hardwood pulp (BHKP) prices have not experienced the same price fall as NBSK prices. The recent price trends for pulp have resulted in a minimal price differential between softwood and hardwood pulp.

Global Lumber Markets

• Despite the weakening markets for lumber, six of the ten largest lumber-exporting countries in the world have shipped more lumber this year than last year.

• Housing starts in the US jumped to 872,000 units in September, a 35 percent increase y-o-y.

• North American lumber production rose for the third straight quarter in the 3Q/12.

• The importation of softwood lumber to China in September was down for the fourth consecutive month to 1.14 million m3, a decline of 14 % from September 2011.

• Lumber imports to Japan fell in the 3Q/12 to 1.5 million m3, 8.1 percent lower than in the previous quarter, representing the lowest quarterly imports since 1Q/10.

• Lumber production in the Nordic countries has been lower this year than in 2010 and 2011. In September, production in Sweden was 15% lower than same month in 2011.

Global Biomass Markets

• The United Kingdom has become one of the largest importers of wood pellets in the world in a very short period of time

• Pellet exports from the US South to Europe rose 13 % in the 2Q/12 from the previous quarter; almost a doubling in one year.

• Prices for pellets in Sweden have fallen in the local currency to the lowest level since late 2008.

Global timber market reporting is included in the 52-­page quarterly publication Wood Resource Quarterly. The report, established in 1988 and with subscribers in over 25 countries, tracks sawlog, pulpwood, lumber and pellet prices, and market developments in most key regions around the world. To subscribe to the WRQ, please go to www.woodprices.com

Source: Wood Resources International LLC