Global Pulpwood Prices Rose in Q2, After 7 Consecutive Decreases
(Seattle, WA, USA, October 11, 2016) The wood fiber costs for the world’s pulp industry had trended downward for almost five years until this year when both the softwood and hardwood fiber price indices jumped in the second quarter of 2016, reports Wood Resource Quarterly.
The two indices rose because price increases were seen for wood chips and pulplogs in practically every major market around the world.
The Softwood Wood Fiber Price Index (SFPI) was up 2.3% from the Q1 2016 to $89.63/oven dry metric ton (ODMT) in the 2Q 2016, as reported in the Wood Resource Quarterly (WRQ). This was the first quarter-over-quarter increase since early 2014. A combination of a weaker US dollar and higher wood fiber prices in the local currencies in Western Canada, France, Brazil and Germany, were the main reasons for the higher SFPI this quarter.
The Hardwood Wood Fiber Price Index (HFPI) was up 3.7% from the Q1 2016 to $86.86/odmt, which was also the first increase in almost two years. The biggest price increases (in US dollars) occurred in Russia, Brazil, Chile, Australia and Eastern Canada.
Despite the recent price increase, current price levels for wood fiber are close to the lowest they have been in almost ten years in nominal terms. Wood fiber costs currently account for approximately 58% of the cash costs when manufacturing pulp on a global basis, according to Fisher International. Of the 16 major pulp-producing regions around the world tracked by the WRQ, pulpmills in Japan have the highest wood fiber cost percentage of close to 70%, while Russian mills have the lowest wood cost share of just below 40%.
The historically low wood fiber costs are, of course, very good news for the world’s pulp and paper industry. With market pulp prices currently being slightly below their ten-year averages, the wood costs as a percentage of the market pulp price (NBSK and EBK) are close to their lowest levels in almost 15 years. (Source: press release)
