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29 September 2020
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Wood fiber costs for the world`s pulp industry fell for the first time in over a year

Wood fiber costs for the world`s pulp industry fell for the first time in over a year
Wood fiber costs for the world`s pulp industry fell for the first time in over a year in the 2Q/18, with pulpwood prices declining the most in Brazil, Russia, Australia and Sweden, reports the Wood Resource Quarterly

The two WRI global wood fiber prices indices fell slightly in the 2Q/18 after having increased for all of 2017 and early 2018. For most of the key pulp-producing regions, prices were down because of the strengthening US dollar, while prices in the domestic currencies generally have gone up the past year.

Seattle, USA. In the 2Q/18, both of WRI`s global fiber price indices fell for the first time in five quarters, mainly because of the strengthening of the US dollar against currencies in all countries covered by the Wood Resource Quarterly. The 2Q/18 Global Softwood Fiber Price Index (SFPI) decreased slightly from the 1Q/18 but was still 7.8% higher than in the same quarter in 2017. Quarter-over-Quarter, softwood fiber prices fell the most in Brazil, Russia, Sweden and New Zealand.

Prices for pine pulplogs in Brazil have been stable in Brazilian Real terms over the past year, holding steady at record high levels following a three-year period of rising prices. Due to the recent weakening of Brazilian currency, wood fiber costs in US dollar terms have declined by 10% from the 2Q/17 to the 2Q/18, and the Brazilian pulp industry now has some of the lowest production costs in the world thanks to very low wood fiber costs, according to the Wood Resource Quarterly (WRQ).

In Sweden, one of the largest consumers of softwood pulplogs in the world, the pulp industry also enjoyed lower wood fiber costs in the 2Q/18, with average pulplogs prices being down 11% in the local currency (12% down in US dollars) from the 2Q/17. Sweden is still one a high cost producer of softwood pulp.

Lower prices of hardwood logs in Brazil, Russia, Sweden, Australia and Spain, together with price increases in Indonesia, US Northwest, Japan and Chile, resulted in a slight decline in the Global Hardwood Fiber Price Index (HFPI) in the 2Q/18 as compared to the previous quarter, reports the WRQ.

In Indonesia, wood costs have trended upward for about two years, reaching their second highest level on record in the 2Q/18. From the 2Q/16 to the 2Q/18, the average hardwood pulplog price increased by 28% for pulpwood traded in the open market (a fairly small share of the total wood fiber consumption in Indonesia). During this period, the country`s pulp manufacturers have seen the average open market pulpwood price shift from being among the lowest in the world to one of the highest. Tight fiber supply, expansion of pulp capacity and a conversion from mixed tropical hardwood to plantation wood are factors that have pushed prices to new highs.
October 31, 2018