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Hardwood pulp prices down

Sept. 4, 2014, Seattle - Wood fibre costs, the major cost component when manufacturing wood pulp, have developed quite differently the past few years for pulp mills manufacturing softwood pulp compared to companies producing hardwood-based pulp. Softwood fibre prices remained relatively stable on a global basis during 2012 and early 2013 when the Softwood Fibre Price Index (SFPI) fell to its lowest level in four years. Since the 2Q/13, the SFPI has increased about three per cent to just over $100/odmt in the 2Q/14.

Much of the world's softwood pulp production occurs in the Northern Hemisphere where residuals from the sawmilling sector commonly account for a fairly large share of the pulp industry's fibre supply. Strong lumber markets are often good news for the pulp industry in North America and Europe because high lumber production results in an abundance of a relatively inexpensive fibre source.

Wood chips prices have fallen substantially since 2012 in four of the regions of the world where sawmill chips account for a majority of the fibre supply, Japan, Western US, Western and Eastern Canada, resulting in improved competitiveness of the pulp and paper industry in those regions.

Contrary to the trend for softwood fiber prices, hardwood hardwood fiber prices have fallen dramatically the past three years, with the Hardwood Fiber Price Index (HFPI) coming down from a record high of almost $118/odmt in 2011 to $97.01/odmt in the 1Q/14, followed by an increase of 1.8% in the 2Q/14.

Global pulpwood and timber 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, lumber and pellet prices, trade and market developments in most key regions around the world. To subscribe to the WRQ, please go to www.woodprices.com.

September 4, 2014  By Wood Resource Quarterly

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