SEATTLE–(BUSINESS WIRE)–Wood fiber costs currently account for almost 60% of the cash costs when manufacturing wood pulp. Prices for both wood chips and pulplogs have trended downward for a long time, but this came to an abrupt halt in the 2Q/16 when the softwood price index rose 2.3% and the hardwood price index increased 3.7% from the 1Q/16, according to the latest Wood Resource Quarterly.
The wood fiber costs for the world’s pulp industry had trended downward for almost five years until this year when both the softwood and hardwood fiber price indices jumped in the 2Q/16. The two indices rose because price increases were seen for wood chips and pulplogs in practically every major market around the world.
The Softwood Wood Fiber Price Index (SFPI) was up 2.3% from the 1Q/16 to US$89.63/odmt in the 2Q/16, as reported in the Wood Resource Quarterly (WRQ). This was the first quarter-over-quarter increase since early 2014. A combination of a weaker US dollar and higher wood fiber prices in the local currencies in Western Canada, France, Brazil and Germany, were the main reasons for the higher SFPI this quarter.
The Hardwood Wood Fiber Price Index (HFPI) was up 3.7% from the 1Q/16 to US$86.86/odmt, which was also the first increase in almost two years. The biggest price increases (in US dollars) occurred in Russia, Brazil, Chile, Australia and Eastern Canada.
Despite the recent price increase, current price levels for wood fiber are close to the lowest they have been in almost ten years in nominal terms. Wood fiber costs currently account for approximately 58% of the cash costs when manufacturing pulp on a global basis, according to Fisher International. Of the 16 major pulp-producing regions around the world tracked by the WRQ, pulpmills in Japan have the highest wood fiber cost percentage of close to 70%, while Russian mills have the lowest wood cost share of just below 40%.
The historically low wood fiber costs are, of course, very good news for the world’s pulp and paper industry. With market pulp prices currently being slightly below their ten-year averages, the wood costs as a percentage of the market pulp price (NBSK and EBK) are close to their lowest levels in almost 15 years.
Note. The Global Wood Fiber Price Index is a weighted average of delivered wood fiber prices for the pulp industry in all regions tracked by the publication Wood Resource Quarterly. These regions together account for 85-90% of the world’s wood-based pulp production capacity. The price is based on current quarter average prices, and country/regional wood fiber consumption data. The global average price for softwood and hardwood is calculated in nominal US$ per oven-dried metric ton (odmt) of wood fiber.
Global lumber, sawlog and pulpwood 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, wood chip, 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
Wood Resources International LLC (WRI), an internationally recognized forest industry-consulting firm established in 1987, publishes two quarterly timber price reports and have subscribers in over 30 countries. The Wood Resource Quarterly, established in 1988, is a 52-page market report and includes sawlog prices, pulpwood and wood chip price and market commentary to developments in global timber, biomass and forest industry. The other report, the North Americam Wood Fiber Review, tracks prices of sawlogs, pulpwood, wood chips and biomass in most regions of Canada and the US.
This information was brought to you by Cision http://news.cision.com