Wood Business

Industry News Markets
Fibre supplies cause volatile U.S. market

April 23, 2015 - Wood fibre costs for pulp mills in the U.S. South were substantially lower than the costs for pulp companies in the rest of the U.S. in the first quarter of 2015. Prices for softwood residual chips in the Southern states were over 30 per cent lower than in the Northeast, Lake States and the Northwest, according the latest issue of the North American Wood Fiber Review (NAWFR).


April 23, 2015
By Andrew Macklin

Pulplog and wood chip prices have held steady in the South for the past 12 months at prices nearing 10-year highs. Sufficient supply of pulplogs and residual chips and steady production levels at the region’s pulp mills have contributed to a healthy fibre supply and demand balance.

With pulpmills generally able to build healthy wood inventories in the Q1/2015 and with a number of maintenance outages scheduled for the second quarter, the stage is set for a possible reduction in pulpwood pricing in some southern states in the near future.

Heavy snowfalls across the Northeast, excluding the northern half of Maine, have created challenges for forest access and transportation during the Q1/2015. Fibre inventories, particularly those of hardwood, remained short resulting in concerns over having sufficient supplies on hand to carry through the spring, when road weight limitations and mud season greatly diminish harvest levels. Pulplog prices in this region were slightly higher in the first quarter as compared the previous quarter.

Prices for both logs and chips in the Lake States were up to record high levels as obtaining adequate fiber supplies remained a serious challenge in the quarter. Prices remained high despite the reasonable snow levels and standard temperatures.

In the first quarter, wood chip prices in the US Northwest continued their upward trend that started in late 2013, reaching their highest levels in almost three years. In only the past 12 months, softwood chips prices have gone up 21 percent. With the recent increases, this region had some of the highest wood chip prices in North America, reports the NAWFR (www.woodprices.com). With additional residual chips generated by increased lumber production in the coming months, it is likely that chip prices will decline later in 2015.