Displaying items by tag: Wood Resources International LLC

Wood fiber costs for pulpmills throughout the US fell during 2016 and early 2017 with the price discrepancy between the Northwest and the Southern states narrowing, according to the North American Wood Fiber Review

Wood fiber costs for pulpmills in the US Northwest have fallen faster than in other region of the US the past year, resulting in a more competitive industry sector, reports the North American Wood Fiber Review. Despite the recent price reductions in Washington and Oregon, pulp manufacturers in the southern states continued to have lower wood fiber costs than pulpmills in the Northwest, Northeast and the Lake States in the 1Q/17.

“Volatile” could best describe many of the North American regional market conditions in the first quarter of 2017! The volatility came in many different areas; adverse weather events, operation breakdowns, plant explosions, and idling, as well as uncertainties over looming trade policy decisions, according to the North American Wood Fiber Review (NAWFR). Wood flows across Canada and the U.S. northern tier of states as well as through the Pacific Northwest were impacted by weather–either too much snow (leading to transportation difficulties), or mild temperatures followed by early breakup.

The declining price trend for chips and pulplogs in the Northwest that occurred during 2015 and 2016 came to a halt in early 2017 because of uncertainty about fiber availability as a result of slowdowns in harvest operations. Over the past two years, fiber costs have declined by 13% in the Northwest and pulpmills in the region have become more competitive. In the 1Q/17, pulpmills had only slightly higher wood fiber costs than pulpmills in the historically low-cost US South. Pulpmills in the Lake States and the Northeastern states continue to have the highest wood costs in the US.

Wood fiber costs for pulpmills in the US South have also fallen over the past year, with average softwood pulplog prices being five percent lower in the 1Q/17 than in the 2Q/16. Prices for both softwood and hardwood pulplogs have slowly declined over the past four quarters to reach their lowest levels in three years.  With several planned pulpmill maintenance outages anticipated in the 2Q/17, fiber demand will remain muted in the coming months. Increased lumber production across the South will continue to generate additional volumes of residual chips resulting in downward price pressure on both chips and pulplogs in late spring and summer. For updated information on the 2Q/17 wood fiber prices and market developments in the US and Canada, please refer to the upcoming issue of the NAWFR.

The North American Wood Fiber Review (NAWFR) has tracked wood fiber markets in the US and Canada for over 30 years and it is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America.  The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, lumber, wood pellets and wood chips.

Low wood fiber costs in Brazil have continued to attract investments in pulp production capacity leading to substantial increases in market pulp exports in 2016, reports the Wood Resource Quarterly

Brazil’s pulp sector has for over two decades had some of the lowest wood fiber costs in the world, making the industry highly competitive, reports the Wood Resource Quarterly. The low production costs have resulted in major investments in pulp production capacity with a majority of the pulp being exported overseas, predominantly to China.

The export market for pulp produced in Brazil has become increasingly important for the pulp sector with the export share of domestic production having gone up from 55% in 2007 to almost 70% in 2016. Pulp export volumes have expanded in an impressive fashion over the past two decades, with increased year-over-year shipments for 19 of the past 20 years. This trend continued in 2016, with export volumes likely to reach almost 13 million tons, an increase of about 11% from 2015, reports the Wood Resource Quarterly.

Not surprisingly, China’s steady increase in demand for pulp the past decade has been the key driver to Brazil’s pulp export success story. Over one-third of Brazil’s exports were destined for China this year, up from 23% five years ago.

Brazil has become the second largest producer of wood-based pulp in the world behind the US, having surpassed Canada in 2016. The driving factors have been a combination of low wood fiber costs, a dramatically weakening Brazilian Real, and a steady increase in demand in particular for hardwood market pulp in China.

Over the past three years, wood fiber costs in Brazil have been approximately 60% of the manufacturing costs, according to Fisher International. The high cost share for wood fiber, together with being one the lowest-cost pulpwood regions of the world, has made Brazil’s pulp industry a very competitive pulp producer for many of the past 25 years.

In US dollar terms, Eucalyptus pulplog prices have fallen from a record-high in the 3Q/11 to a 12-year low in the 4Q/15. Since the end of 2015, wood fiber prices have gone up but are still substantially below their ten-year average, as reported by the WRQ (www.woodprices.com).

The past two decades have not only been mostly good news for the pulp industry in Brazil, but also for timberland owners measuring their financial results in the Brazilian Real (BRL). In 2016, eucalyptus pulplog prices reached their highest level on record since WRQ started tracking pulplog prices in Brazil over 20 years ago. Current prices are about five percent higher than one year ago in the local currency, and 23% above the average price two years ago.

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

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Wood Resources International LLC Hakan Ekstrom
Seattle, USA 
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www.woodprices.com 

After reaching a record high in 2014, log trade in the Baltic Sea fell by 10% in 2015. Most of the decline was that of softwood pulplogs, while trade of sawlogs actually increased to reach its highest level since 2007, according to the Wood Resource Quarterly. Russia has been surpassed by the Baltic States as the major softwood log supply region.

The forest industry in the Baltic Sea region has for many decades imported large volumes of wood raw-material from their neighboring countries as a complement to their typically less costly local wood sources. For example, pulp mills in Finland and Sweden imported approximately 18% and 15%, respectively, of their wood fiber needs in 2014.

The log market in the Baltic Sea is one of the most active markets in the world with softwood log trade accounting for over 20% of global trade, and shipments of hardwood logs reaching almost 29% of world trade of temperate hardwoods in 2015. Finland and Sweden are the major importing countries, but forest companies in Germany and Poland have also been importing substantial log volumes over the past five years.

In 2014, total log trade to the Nordic countries reached a six-year high of 14.3 million m3 after five years of consecutive increases. In 2015, total shipments fell over 10% mainly because of lower demand for softwood pulplogs, according to the Wood Resource Quarterly (WRQ). Trade of softwood sawlogs on the other hand, reached its highest level since 2007 last year when 1.6 million m3 was imported primarily to sawmills in Sweden.

The major log trade flows in Northern Europe the past few years have been:

•   Norway to Sweden (softwood)
•   Latvia to Sweden (softwood and hardwood)
•   Russia to Finland (softwood and hardwood)
•   Estonia to Sweden (hardwood)

Ten years ago, Russia exported about 7.5 million m3 of softwood logs to the Nordic countries but after the introduction of the country’s log export duties, shipments plunged, and over the past three years, volumes have been just over one million m3 annually. With the fall of Russian log exports, log exporters in the Baltic States stepped in and the region became the major log supplier of logs to sawmills and pulp mills in the Nordic countries and Germany. However, over the past four years, shipments of softwood logs have been in steady decline from 3.1 million m3 in 2011 to only approximately 1.3 million m3 in 2015, as reported in the WRQ.

It is interesting to note that during the same period, exports of hardwood logs from the Baltic States have fallen almost 30%, while Russia has become a more aggressive player as the weak Ruble has made Russian logs more competitive.

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, 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
 
Contact Information
Wood Resources International LLC Hakan Ekstrom
Seattle, USA
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www.woodprices.com

Log arrivals to China surged in March with an increase of 76% over the previous month. This came after almost a year of declining log imports, reports the Wood Resource Quarterly. New Zealand and Australia increased their volumes the most, together accounting for a record-high share of over 50% of the total import volume. Log import prices have trended downward since early 2014 and were in March 15% below the price a year ago.

Log import volumes to China typically increase in the month of March every year and 2015 was no exception with a 76 percent jump from the previous month. The softwood log imports reached 2.9 million m3. This is the highest monthly volume since early in 2014, and incidentally, is also higher than the monthly average over the past two years, as reported in the upcoming issue of the Wood Resource Quarterly (WRQ).

With the Russian ruble falling in value by over 50% over the past six months, there were expectations by some market observers that Russian exporters would increase their export volumes substantially in 2015, but that has not yet happened. In the first quarter of 2015, Russia actually exported fewer softwood logs to China than in the previous quarter, and comparitively, shipments were almost 15% below the 1Q/2014.

As indicated in the latest issue of the WRQ, there are numerous obstacles to Russian log exporters increasing export volumes in the short-term. These include inadequate ability to promptly increase timber harvests when opportunities arise, limited access to logging equipment, insufficient infrastructure, lack of loggers and truckers, and logistical bottle necks in the entire supply chain from the forests to the ports. As a consequence, many logging companies and sawmills have had difficulty taking advantage of the improved export market opportunities so far.

Rather than a surge in softwood logs from Russia entering the Chinese market, log exporters in New Zealand and Australia increased their shipments by 250% and 165%, respectively from February to March. Combined, the two countries supplied over 50% of Chinese log imports in March, a record high share for the Oceanian log exporters.

While log import volumes to China surged in March, prices did not. The average import price was actually at the lowest level since 2010. Prices for imported softwood logs have trended downward for almost a year and were in March of this year 15% lower than in March of 2014. North American logs have the highest costs, while Australia and New Zealand are on the lower end of the cost scale.

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, 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

Contact Information
Wood Resources International LLC
Hakan Ekstrom
Seattle, USA
This email address is being protected from spambots. You need JavaScript enabled to view it. 
www.woodprices.com 

Wood fiber costs for pulp mills in the Western US have increased substantially over the past year while other regions in the US have experienced only modest increases, according to the North American Wood Fiber Review

Pulp mills in the US South continued to have stable wood fiber prices in the 1Q/15 at levels lower than any other region in the country. The dramatic increase in chip prices in the Northwest during 2014 started to level off early in 2015, while tight fiber supply in both the Lake State region and in the Northeast resulted in upward price pressure, reports the North American Wood Fiber Review.

Wood fiber costs for pulp mills in the US South were substantially lower than the costs for pulp companies in the rest of the US in the 1Q/15. Prices for softwood residual chips in the Southern states were over 30 percent lower than in the Northeast, Lake States and the Northwest, according the latest issue of the North American Wood Fiber Review (NAWFR).

Pulplog and wood chip prices have held steady in the South for the past 12 months at prices nearing 10-year highs. Sufficient supply of pulplogs and residual chips and steady production levels at the region’s pulp mills have contributed to a healthy fiber supply and demand balance. 

With pulpmills generally able to build healthy wood inventories in the 1Q/15 and with a number of maintenance outages scheduled for the second quarter, the stage is set for a possible reduction in pulpwood pricing in some southern states in the near future.

Heavy snowfalls across the Northeast, excluding the northern half of Maine, have created challenges for forest access and transportation during the 1Q/15. Fiber inventories, particularly those of hardwood, remained short resulting in concerns over having sufficient supplies on hand to carry through the spring, when road weight limitations and mud season greatly diminish harvest levels. Pulplog prices in this region were slightly higher in the 1Q/15 as compared the previous quarter.

Prices for both logs and chips in the Lake States were up to record high levels as obtaining adequate fiber supplies remained a serious challenge in the 1Q/15. Prices remained high despite the reasonable snow levels and standard temperatures.

In the 1Q/15, wood chip prices in the US Northwest continued their upward trend that started in late 2013, reaching their highest levels in almost three years. In only the past 12 months, softwood chips prices have gone up 21 percent. With the recent increases, this region had some of the highest wood chip prices in North America, reports the NAWFR (www.woodprices.com). With additional residual chips generated by increased lumber production in the coming months, it is likely that chip prices will decline later in 2015.

The North American Wood Fiber Review has tracked wood fiber markets in the US and Canada for over 20 years and it is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America. The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, wood pellets and wood chips.

Contact Information

Wood Resources International LLC

Hakan Ekstrom

Seattle, USA

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www.woodprices.com

Reduced pulpwood prices in Sweden, Russia, Brazil and Australia in the 3Q/14 resulted in the lowest Hardwood Fiber Price Index (HFPI) since 2009, according to the Wood Resource Quarterly. With mixed price trends for softwood fiber, the Softwood Fiber Price Index (SFPI) has been fairly stable the past two years.

The costs of hardwood fiber for the manufacturing of pulp have trended downward for over three years. The global Hardwood Fiber Price Index (HFPI), which tracks prices for pulplogs and wood chips in 14 regions around the world, reached its lowest level since 2009 in the 3Q/14 when it fell to $96.76 per oven-dry metric ton (odmt). The biggest declines in prices from the 2Q/14 occurred in Sweden, Russia, Brazil and Australia mainly as the result of a stronger US dollar.

The HFPI index has trended downward for over three years when the all-time high of $117.90/odmt was reached. The largest consumption of hardwood fiber in the world is in Brazil where the pulp production has been on an upward trend for over two decades.

Despite the continued increase in pulp production and the accompanying rise in wood fiber consumption, prices for Eucalyptus logs have not changed much in Brazilian Real terms, according to the Wood Resource Quarterly (WRQ). In US dollar terms the picture is somewhat different, with prices having fallen as the Brazilian Real has depreciated.

The Softwood Fiber Price Index (SFPI), which tracks global prices of softwood chips and pulplogs, has been fairly steady over the past two years, fluctuating between $98-100/odmt. The major changes in softwood prices in 2014 occurred in sawmill residuals in Western US and Western Canada where prices increased, and in Germany and Brazil where prices have fallen this year.

In Western Canada, chip prices have gone up mainly because of higher prices for softwood market pulp (NBSK), to which they often are linked, while recent price increases in Western US have been driven by a rise in the volume of exported chips to Japan.

Although wood raw-material costs for the Russian forest industry have not changed much in Ruble terms, the costs in US dollars for pulplogs have fallen dramatically from the 2Q to the 3Q this year because of the weakening Russian currency. Pulpwood prices have come down to levels not seen in more than six years. Currently, both softwood and hardwood pulplog prices are lower in Russia than in any of the 17 other regions covered by the WRQ (www.woodprices.com).

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

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.

Forest companies in Northern Europe have announced plans to investment three billion dollars in 2014 in attempt to move beyond mostly producing newsprint and commodity packaging grades. The idea is to diversify their product lines to include new bio-products from wood fiber and to generate bioenergy to reduce the region’s dependence on fossil fuels, reports the Wood Resource Quarterly.

The pulp and paper industry in the Nordic countries has started to see a new dawn with a growing demand for pulp and paper products made from long wood fiber from the vast conifer forests in Northern Europe. Just over the past few months, there have been a number of announcements in investments made by forest companies in Finland, Norway and Sweden totaling close to three billion dollars, as reported in the Wood Resource Quarterly (WRQ).

The primarily end-products will be softwood market pulp and virgin fiber-based container board, but major investments are also being consider in increasing the utilization of forest biomass for energy on a larger scale. Although the investment decisions have not been finalized for all projects, these ruminations are a sign that the forest industry in this part of the world sees the future in a much brighter light than just a few years ago.

In addition to the investments in the pulp and paper industry, there has also been an announcement that the Swedish forest owner federation Sodra, together with the Norwegian energy company Statkraft, Europe’s largest producer of renewable energy, intends to establish an biofuel conglomerate at the site of the now closed pulpmill in Tofte, just south of the capital Oslo.

In Finland, Metsä Fiber has plans to invest 1.5 billion dollars in a plant that will produce softwood pulp, renewable bioenergy and what the company categorizes as “various bio-materials”.

Some of the factors that have placed softwood fiber in a new positive light are: limited investments in the establishments of softwood plantations worldwide, favorable global supply/demand balance for softwood pulp over hardwood pulp, (if you are a pulp manufacturer), increased demand for packaging material requiring wood fiber with high strength, and a rise in research in new products made from trees, sometimes as substitutes to non-renewable materials such as plastic and metal.

These recent developments in the Nordic countries may very well be the beginning of the biggest transformation of the softwood fiber-based forest industry we have seen in decades, not only in Northern Europe but in other regions of the world as well where coniferous forests is the dominant forest-type.

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

Sawlog prices in North and Central Europe have trended downward the past two years, while prices in Eastern Europe have increased slightly, reports the Wood Resource Quarterly

Sawlog prices in Europe were generally lower in 2012 than in 2011 because of lower log demand from the sawmilling sector, reports the Wood Resource Quarterly. Many sawmills on the continent have been forced to reduce production as a result of the weak lumber market. Log prices fell the most in the Nordic countries, while prices in Eastern Europe were steady or even slightly higher toward the end of 2012.

Sawlog prices have trended downward in most major markets in Western Europe the past two years in US dollar terms, but this trend was broken in the 4Q/12 when prices increased slightly mainly as a result of a weakening US dollar. In the local currencies, log prices were practically unchanged in the 4Q/12.

The biggest price declines have been seen in Sweden where pine sawlog prices fell over 15 percent from the 4Q/10 to the 4Q/12 in both the local currency and in US dollar terms.

Spruce log prices have declined over 25 percent during the same time period. In Finland, Germany and Norway, prices have dropped a more modest 5-10 percent over the past two years, as reported by the Wood Resource Quarterly. Sawlog prices fell during 2012 because sawmills were cutting back production in response to the weaker demand for lumber throughout Europe.

While log prices have fallen in both US dollar terms and local currencies the past two years in Northern and Central Europe, prices for sawlogs in the 4Q/12 in Eastern European countries, including Estonia, Latvia and the Czech Republic, were generally higher than in 2011. This development has mainly come as a result of the relatively strong lumber export market which kept the log markets healthy.

The only major market in Eastern Europe where log prices have fallen has been Poland. From the 2Q/11 to 4Q/12, average prices have fallen over 20 percent and the country has now some of the lowest conifer sawlog prices in Europe, according to the Wood Resource Quarterly.

As a consequence of slowing lumber production, log trade declined in Europe during 2012, which also had a dampening impact on log prices on the continent. Net log imports to Western Europe fell from over 14 million m3 in 2011 to an estimated 10.8 million m3 in 2012. Much of the decline in imports was those from Russia and the Baltic States.

Sawlog prices might be close to the bottom in the 1Q/13, and they are likely to remain at these levels as long as the European demand for lumber continues to be weak. Despite the recent price declines, current price levels are higher than the ten-year average in all major markets throughout Europe.

Wood fiber costs for pulp mills fell in both North America and Latin America in the 4Q/12 because of weaker pulp markets and an increased supply of sawmill chips, reports the Wood Resource Quarterly

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 4Q/12, according to the Wood Resource Quarterly. The biggest declines occurred in Western US, British Columbia and Brazil.

Seattle, USA. 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 US dollar, wood fiber prices actually increased in US dollar terms in a number countries and the Softwood Wood Fiber Price Index (SFPI) was up slightly (+0.1%) in the 4Q/12 to $100.13/odmt. The biggest increases from the 3Q to the 4Q occurred in Eastern Canada, Finland, France and New Zealand, according to the Wood Resource Quarterly (www.woodprices.com).

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 US Northwest, chip prices fell as much as 27 percent during 2012 and pulp mills in the region had some of

the lowest softwood fiber costs in the world in the 4Q/12.

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 4Q/12 were down 22 percent from late 2011, reaching their lowest levels in three years.

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 US dollar terms. This resulted in a decline in the Hardwood Wood Fiber Price Index (HFPI) to US$104.80/odmt in the 4Q/12. This was down 1.5 percent from the previous quarter and 7.8 percent from the 4Q/11.

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 4Q/12, prices in US dollar terms were back down to same levels as where they were in early 2009. Few regions in the world currently have lower hardwood costs than Brazil.

Wood pellet exports from North America to Europe were up over 70% in the 3Q/12 year-over-year, reports the North American Wood Fiber Review

Rapid expansion of wood pellet production in both the US South and British Columbia has dramatically increased pellet exports from North America to Europe the past year, according to the North American Wood Fiber Review. In the 3Q/12, total shipments were up 70 percent year-over-year to 860,000 tons. The growth is expected to continue with numerous plans for adding capacity, particularly in the US South.

Seattle, USA. Pellet exports from the two primary pellet-producing regions on the North American continent, the US South and British Columbia, continued to increase in the 3Q/12 and reached a new record of 860,000 tons. Shipments in the 3Q/12 were over 70 percent higher than the same quarter in 2011, according to the North American Wood Fiber Review (www.woodprices.com), which compiles and publishes pellet trade based on customs data and surveys of pellet exporters each quarter. Pellet exports from the US South have skyrocketed the past two years with a quadrupling to 485,000 tons from the 3Q/10 to 3Q/12 to the 485,000 tons. Canadian exports have also gone up the past few years, but at a slower pace.

Beyond the trade statistics tracking the rise of pellet export volumes, another spate of export pellet plant announcements – detailed in the NAWFR – emphasized the quickly growing trade relations that are being established between European power utilities and US pellet producers. The most striking announcement came in mid-December when Drax, a United Kingdom power company, stated its intention to build two 450,000 tons pellet plants, one in the state of Louisiana and one in Mississippi. Most other export- oriented pellet plants, while invested in by European utilities, are separate US-based entities, with supply agreements and MOU’s defining the business relationship.

The three major European pellet import countries remain the UK, the Netherlands, and Belgium, while Italy, Denmark and Sweden are notably involved in pellet imports from North America, but on a much smaller scale. Denmark’s Dong Energy utility, however, announced its intentions to switch to woody biomass at three of its coal plants, an action likely to add demand from the US Southeast.

Announced US South pellet export plants increased sharply in the 2nd half of 2012. Export pellet facilities, which are under construction, conversion or redesigned will add an additional 1.7 million tons of capacity during 2013, as reported in the NAWFR. In addition to these plants that are already under construction, five additional plants have been announced, and if they are actually built on the disclosed sites, they would bring another 2.3 million tons of capacity into play by the end of 2014.