Displaying items by tag: Wood Resource Quarterly
South Korea and Japan will become large importers of pellets and energy chips.
Both Japan and South Korea intend to reduce the consumption of fossil fuels and increasingly rely on renewable energy in the future. As a consequence, both countries will increase their importation of wood pellets and energy chips from other countries in Asia and from North America in the coming years, reports the Wood Resource Quarterly.
Asia will consume more wood pellets and energy wood chips in the future. The governments in Japan and South Korea have announced definite plans to increase their usage of green and low carbon energy alternatives. South Korea is taking steps to reduce its dependence on imported fossil fuels and instead invest in domestic renewable- energy technology, including wind, solar, hydropower and biomass. The long-term plan is to increase the renewable energy share from less than four percent in 2011 to 6.1 percent in 2020, and then to 11.5 percent in 2030. As part of this effort the government has initiated a program, which has included building eight new pellet plants, as well as exploring opportunities to import large volumes of pellets in the future. The goal is to consume five million tons of pellets by 2020, a huge increase from the less than a few hundred thousand tons used in 2011.
South Korea has access to wood residues from the domestic sawmilling industry, which could be used for the manufacturing of pellets. This domestic supply, however, will not be sufficient, so South Korea will need to increase pellet imports in order to meet the ambitious 6.1% goal only eight years from now. The government estimates that by 2020, 75-80 percent of pellets consumed in the country will need to be imported. Some of the major energy companies in South Korea have reportedly been exploring the opportunities to import pellets from Australia, Vietnam, Indonesia, the Philippines, Canada and the US.
Japan is another Asian country expected to increase importation of energy chips and wood pellets, due in part to the nuclear power plant accident in Fukushima last year. Following the disaster, the Japanese government decided to close down all nuclear plants, at least temporarily. Even if a few plants eventually reopen, nuclear energy will never again be as important for energy production as it once was.
In the future, Japan will increasingly rely on renewable energy sources, with biomass likely to be one important supply source. Up until this year, Japan has imported only very limited volumes of wood pellet, primarily from Canada, but it is likely that import volumes of both pellets and energy chips will increase in the coming years.
Chile and Brazil have began to supply Eucalyptus chips to Chinese pulp mills
Chile and Brazil have began to supply Eucalyptus chips to Chinese pulp mills; however Japan continues to be the major destination for Latin American wood chips, reports the Wood Resource Quarterly
In late 2011, Brazil and Chile sent the first chip vessels to pulp mills in China in over five years. In the past, Japan had been the major destination for Latin American Eucalyptus chips. With Japanese pulp mills paying considerably more than Chinese pulp mills for chips, it is likely that a majority of Eucalyptus chips from Latin America will continue to be shipped to Japan.
Seattle, USA. In 2007, China imported wood chips from only three countries: Vietnam, Indonesia and Australia, who together shipped 1.1 million tons throughout the year. With the fast expansion of the pulp industry in China, the country is rapidly growing its need for wood fiber. Domestic supplies have proven inadequate, so the list of supplying countries has expanded from three to eight over the past 12 months.
Two of the three chip-exporting countries in Latin America, Chile and Brazil, sent the first vessels with Eucalyptus chips since 2006 in the third quarter last year. The total volume exported from the two countries in 2011 was 100,000 tons, and during the first seven months this year, 76,000 tons have been shipped, a majority from Chile.
Wood chips from Latin America still accounted for only three percent of all hardwood chips imported to China in the 2Q/12, and these chips were among the costliest chips landing in the country, as reported in the Wood Resource Quarterly. So, although Chinese pulp mills will be in search of additional wood fiber in the coming years, it is not likely that either Chile or Brazil will be major competitors to countries in closer proximity to China, including Vietnam, Thailand, Indonesia and Australia.
Chile will most likely continue to ship a majority of its chips to Japan, where its chips are more competitively priced with other supplying countries. During the first six months of 2012, Chile was the largest supplier of hardwood chips to the Japanese pulpmills, followed closely by Australia. Chile’s market share in this market has gone from 17 percent five years ago to 27 percent in the first half of 2012. With chips from Chile being less costly than Australian chips delivered to Japan, there will continue to be opportunities for Chile to gain market share in the Japanese chip market in the coming year.
Wood costs for the world’s pulp industry continued downward in Brazil, Russia, Australia and Europe.
The costs of wood fiber for many pulp mills throughout the world continued to fall in the 2Q/12 and were at their lowest levels in over a year, according to the Wood Resource Quarterly. The greatest declines were seen in Brazil, Australia, Russia, Spain and US northwest, and Eastern Canada.
Wood fiber costs for the world’s pulp mills were down again in the 2Q/2012. Prices for wood chips and pulplogs in both local currencies and in US dollars fell in most of the 17 regions tracked by the Wood Resource Quarterly.
Uncertainty in demand for pulp, lower pulp and paper prices, reduced market pulp production and a healthy supply of sawmill residuals were all factors that put downward pressure on wood fiber prices this spring and early summer. The Softwood Wood Fiber Price Index (SFPI) fell by 4.1 percent from the 1Q/12 to $100.54 per oven-dry ton (odmt). This was the biggest quarter-to-quarter drop since 2008. The biggest price declines for hardwood fiber from the 1Q/12 to 2Q/12 occurred in Brazil, the US Northwest, Australia and Eastern Canada.
Hardwood fiber prices have fallen even more than softwood fiber prices this year. The Hardwood Wood Fiber Price Index (HFPI) was down 4.4 percent to $104.88/odmt from the previous quarter. The HFPI has now fallen for three consecutive quarters since the all-time high in the 3Q/11, and in the 2Q/12 was at the lowest level in two years. The largest price reductions from the 1Q/12 occurred in Brazil, Russia and Australia.
Although Brazilian pulplog prices have not changed much in the local currency, they have fallen dramatically in US dollar terms as the Real has weakened the past year. Eucalyptus pulplog prices in the 2Q/12 were down 28 percent from the same quarter in 2011, while pine pulplog prices declined 26 percent from a year ago. The recent dramatic price reductions of pulplogs have resulted in Brazilian pulpmills enjoying among the lowest wood costs of all regions tracked by the WRQ, despite being above the global average as recent as 12 months ago.
Wood fiber costs were also down throughout Europe in the 2Q, with the smallest declines (in US dollars) in Finland (-1.3%) and Norway (-3.6%) and the biggest reductions in Spain (-15%) and France (-7.7%). In most markets, wood fiber prices have come back down to where they were in 2010.
Wood chip prices fell throughout the US and Canada in the 2Q/12
A drop in demand for woody biomass in the US
A drop in demand for woody biomass in the US reduced biomass prices in the South, Northeast and the West during the 2Q/12, reports the North American Wood Fiber Review
Prices for mill and forest biomass fell in most major consuming regions of the US in the 2Q/12, according to the North American Wood Fiber Review. The main reason for the declining prices is the continued fall of natural gas prices to levels not seen in ten years
The full article can be found in the attached PDF file Below....
Wood fiber costs for the European pulp industry have fallen from the record highs of 2011.
Weaker pulp markets have resulted in lower wood chip and pulplogs prices worldwide
Weaker pulp markets have resulted in lower wood chip and pulplogs prices worldwide, reports the Wood Resource Quarterly
Wood fiber costs, which can account for up to 70 percent of the production costs for a pulpmill, fell in many markets during the 1Q/12, according to the Wood Resource Quarterly. The biggest declines were seen in Western Canada, Europe and Brazil, while Chile, Australia and New Zealand experienced some minor price increases for pulplogs and chips during the quarter.
China log and lumber imports down in 1Q/12
China log and lumber imports down in 1Q/12, with Russia and New Zealand suppliers hit the hardest, while North America gained market share, reports the Wood Resource Quarterly
China’s demand for logs and lumber fell in late 2011 and early 2012 because of their slowing housing market. However, over the past ten years, importation of wood products has increased dramatically, as reported in the Wood Resource Quarterly (www.woodprices.com). Lately, North American log and lumber exporters have increased their market share in China at the expense of exporters in Russia and New Zealand.
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Wood pellet exports from the US and Canada to Europe reached a record high in the 4Q/11
Wood pellet exports from the US and Canada to Europe reached a record high in the 4Q/11 thanks to increased demand in the United Kingdom, reports the North American Wood Fiber Review
Exports of wood pellets from North America to Europe reached a record of over two million tons in 2011, according to analysis reported in the North American Wood Fiber Review (www.woodprices.com). Canada has long been the main exporter of pellets but in the second half of 2011, the US caught up and exported an equal volume to Canada.
The full article can be found in the attached PDF file.....
Eucalyptus and pine log prices in Brazil close to all-time highs in the 4Q/11, reports the Wood Resource Quarterly
Wood costs for pulp mills and sawmills in Brazil have gone up over the past few years, reaching their highest levels in over 20 years in 2011, according to the Wood Resource Quarterly. However, towards the end of the year, Eucalyptus and pine log prices fell, mainly because of the strengthening US dollar.
Eucalyptus log prices in Brazil reached a peak in the 3Q last year, but fell back almost eight percent in the 4Q/11 in US dollar terms because of the strengthening dollar. Current price levels are still among the highest since the Wood Resource Quarterly (www.woodprices.com) started tracking Brazilian wood prices in 1990.
Prices for Eucalyptus pulpwood traded in the open market are high not only from a historical perspective, but also as compared to many other regions around the world.
Only pulp mills in Europe and Australia had higher hardwood fiber costs than Brazil in late 2011, while North America, Chile, Russia and Indonesia all had lower hardwood log prices than the world’s largest market pulp exporter.
Wood fiber cost is by far the most important cost component for Brazilian pulpmills, more so than for most other pulp mills in the world. In the 4Q/11, wood costs accounted
for as much as 72 percent of the total cash costs in Brazil, according to Fisher International. This is substantially higher than the global average of 61 percent.
For the sawmilling industry in Brazil, 2011 was a better year than the previous year, with higher demand both from their domestic market and from abroad. Lumber exports in
2011 were up six percent to their highest levels in three years, with shipments to China, Saudi Arabia, Mexico and Morocco increasing the most.
As a result of the higher lumber production, sawlog prices have trended upward for almost three years, reaching an all-time high in the 2Q/11, according to the Wood Resource Quarterly. During the second half of 2011, log prices fell in US dollar terms, while there were only small price adjustments in the Brazilian Real terms.
Domestic demand for lumber is expected to continue to improve in 2012 with the construction sector gearing up for the World Cup in soccer (2014) and the Olympic Games (2016). If the US dollar continues to strengthen against the Brazilian Real, exports may also contribute to a better year for the Brazilian lumber industry than that of the past
two years. This development is likely to put upward pressure on sawlog prices in the coming year.