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Overseas softwood wood chips fall 11% in eight months, hardwood chips up slightly

June 29, 2015 - Overseas traded softwood chip prices declined by 11 per cent from August 2014 to April 2015, after having trended upward for more than a year. The FOEX softwood chip price index (PIX-SCG) fell to $165.86 per oven-dry metric ton (odmt) in April, which was the lowest level since late 2013 and 4.3 per cent below the five-year average. The reduced price index was due in part to Japanese pulp mills switching to relatively lower cost chips from Australia.

The hardwood chip price index (PIX-HCG) moved slightly higher in late 2014 and early 2015 to reach $182.47/odmt in April 2015. The current price is back up to the same level as a year ago, but still has a ways to go to reach the record high levels of over $200/odmt that occurred almost four years ago. In April 2015, the price premium for hardwood chips over softwood chips, the highest since early 2014.

Much of the hardwood chip trade in the world is concentrated to Asia where pulp mills in China, Japan, South Korea, Taiwan and India import large volumes of Eucalyptus and Acacia chips from plantations in Southeast Asia, Latin America and Africa. The biggest changes in trade flows of hardwood chips during the first four months of 2015 have been an increase in shipments from Australia to China and from Vietnam to Japan, and a decline in volumes from Chile to Japan.

About the PIX wood chip prices indices
FOEX and Wood Resources International (WRI) have cooperatively launched two wood chip price indices, the Softwood Chip Global (SCG) and Hardwood Chip Global (HCG), both part of the PIX index family of FOEX. The Indices represent prices (CIF) for wood chips that are traded globally overseas for the manufacturing of wood pulp and wood-based panels. The Indices are reported monthly the third Tuesday of the month on the FOEX web site (www.foex.fi). If you are interested in participating as a data provider, subscribing to the index histories (data available from January 2010), or are considering using the Indices commercially, please contact tuomo@foex.fi.

About FOEX Indexes Ltd
FOEX Indexes Ltd is a private, independent company which specializes in providing audited, trade-mark registered price indices for pulp, paper, recovered paper, biomass and wood chips. Financial institutions use the FOEX Indices as benchmarks when setting prices for SWAP-deals and other financial instruments hedging against product price risks.

The PIX Indices are trademark registered by FOEX Indexes Ltd. Any commercial use of the indices is subject to permission from FOEX and the terms outlined in the License Agreement between the user/-s and FOEX. If you are considering commercial use of PIX-SCG or PIX-HCG, please do not hesitate to contact FOEX for further guidance.

About Wood Resources International LLC
Wood Resources International LLC, an internationally recognized forest industry consulting firm established in 1987, publishes two quarterly timber and pulpwood price reports and has subscribers in over 30 countries. The Wood Resource Quarterly, established in 1988, is a 50-page quarterly market report which includes global prices for sawlogs, pulpwood, wood chips, lumber and pellets, as well as market commentary about developments in the global timber, biomass and forest industry.

June 29, 2015  By Hakan Ekstrom/Wood Resources Int'l

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