pulpwood prices were up in the 2Q/16 after having declined for seven
consecutive quarters, according to the Wood Resource Quarterly
Wood fiber costs currently
account for almost 60% of the cash costs when manufacturing wood pulp. Prices
for both wood chips and pulplogs have trended downward for a long time, but
this came to an abrupt halt in the 2Q/16 when the softwood price index rose
2.3% and the hardwood price index increased 3.7% from the 1Q/16, according to
the latest Wood Resource Quarterly.
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 2Q/16. The two indices rose because price increases
were seen for wood chips and pulplogs in practically every major market around
The Softwood Wood
Fiber Price Index (SFPI) was up 2.3% from the 1Q/16 to
US$89.63/odmt in the 2Q/16, 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 1Q/16 to
US$86.86/odmt, which was also the first increase in almost two years. The
biggest price increases (in US dollars) occurred in Russia, Brazil, Chile,
Australia and Eastern Canada.
Despite the recent price increase, current price levels for wood fiber are
close to the lowest they have been in almost ten years in nominal terms. Wood
fiber costs currently account for approximately 58% of the cash costs when
manufacturing pulp on a global basis, according to Fisher International.
Of the 16 major pulp-producing regions around the world tracked by the
WRQ, pulpmills in Japan have the highest wood fiber cost percentage of close to
70%, while Russian mills have the lowest wood cost share of just below 40%.
The historically low wood fiber costs are, of course, very good news for the
world's pulp and paper industry. With market pulp prices currently being
slightly below their ten-year averages, the wood costs as a percentage of the
market pulp price (NBSK and EBK) are close to their lowest levels in almost 15
Note. The Global Wood Fiber
Price Index is a weighted average of delivered wood fiber prices for the pulp
industry in all regions tracked by the publication Wood Resource Quarterly.
These regions together account for 85-90% of the world's wood-based pulp
production capacity. The price is based on current quarter average prices, and
country/regional wood fiber consumption data. The global average price for
softwood and hardwood is calculated in nominal US$ per oven-dried metric ton (odmt)
of wood fiber.
Global lumber, sawlog and
pulpwood market reporting is included in the 52-page quarterly publication Wood
Resource Quarterly (WRQ). The report, which was established in 1988 and has
subscribers in over 30 countries, tracks sawlog, pulpwood, wood chip, lumber
and pellet prices, trade and market developments in most key regions around the
subscribe to the WRQ, please
go to www.woodprices.com
Source: Wood Resources
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