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Wood fiber costs for pulp mills falls in NA

Lower pulp prices during last summer and an increased supply of sawmill chips put downward pressure on pulpwood prices in North America and Latin America in the fourth quarter of 2012, according to the Wood Resource Quarterly.


March 7, 2013
By Hakan Ekstrom

The biggest declines occurred in Western US, British Columbia and Brazil.

Wood fiber prices trended downward in the local currencies in many of the key pulp-producing countries of the world in the fourth quarter. However, as a result of the weakening U.S. dollar, wood fiber prices actually increased in U.S. dollar terms in a number countries and the Softwood Wood Fiber Price Index (SFPI) was up slightly (+0.1%) in the fourth quarter of 2012 to $100.13/odmt. The biggest increases from the third to the fourth quarter occurred in Eastern Canada, Finland, France and New Zealand.

The price declines in the local currencies were mainly the result of an increased supply of softwood fiber in regions with extensive lumber production. In the U.S. Northwest, chip prices fell as much as 27% during 2012 and pulp mills in the region had some of the lowest softwood fiber costs in the world in the fourth quarter of 2012.

Additional volumes of residual chips from increased lumber production, reductions in pulp production and pulpmill outages, and large supplies of pulplogs were all factors that contributed to the dramatic turnaround in fiber costs during 2012. A similar trend was seen in Western Canada, where prices in the fourth quarter of 2012 were down 22% from late 2011, reaching their lowest levels in three years.

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Hardwood fiber price movements were mixed, with hardwood pulplog prices generally trending downward in many of the key hardwood pulp-producing regions in both local currencies and in U.S. dollar terms. This resulted in a decline in the Hardwood Wood Fiber Price Index (HFPI) to US$104.80/odmt in the fourth quarter of 2012. This was down 1.5% from the previous quarter and 7.8% from the fourth quarter of 2011.

The biggest decline in hardwood fiber prices occurred in Brazil where Eucalyptus log prices have fallen continuously for over a year from early 2011, when they were at their all-time highs. In the fourth quarter of 2012, prices in U.S. dollar terms were back down to same levels as hardwood costs than Brazil.

Global pulpwood and timber market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, established in 1988 and with subscribers in over 25 countries, tracks sawlog, pulpwood, lumber and pellet prices, trade and market developments in most key regions around the world. Visit: www.woodprices.com.


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