Wood Business

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Forest Products Index loses ground

Feb. 23, 2015 – A $15 per short ton price increase for supercalendered paper could not sustain slightly lower lumber & OSB prices, causing Scotiabank’s Forest Products Index to fall by 1.4% in January.

Lacklustre U.S. lumber prices of $313 USD per mfbm have been positive for Canadian exporters, as the price interprets to $393Cdn. That positive price as a result of the sagging Canadian dollar caused an increase in lumber shipments to the U.S. of 11% in 2014, which helped to balance off a decrease in exports to China of 3%. Renegotiation of the Canada-U.S. Softwood Lumber Agreement, which expires in October, could cause the export market to the U.S. to fluctuate.

For paper products, the falling Canadian dollar has allowed Canada to increase its share of the U.S. paper by six per cent despite permanent closure of 695,000 tonnes of newsprint capacity in the past six months. However, Russia continues to increase its share of international markets, causing a decline in North American exports to Asian markets.

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