Wood Fiber Prices Driven by Strong Pulp Markets

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Wood fiber prices for the global pulp industry rose 11%, reaching pre-financial crisis levels in the 1Q/2010, reports the Wood Resource Quarterly (WRQ), Seattle, Wash., USA. WRQ explains that the strong pulp market has pushed wood fiber costs upward in most regions around the world the past 12 months.

The Softwood Wood Fiber Price Index (SFPI), which is based on wood costs in 16 regions in the world, increased for the fourth consecutive quarter, reaching $99.55/odmt in the 1Q/10, WRQ notes. The Index was up 1.2% from the previous quarter and 11.9% higher than the same quarter last year. Softwood fiber price adjustments in individual markets were mixed, with the highest increases occurring in the U.S. South, Western Canada, France, and Russia, while prices fell the most in Finland, Spain, Chile, and Brazil. The strong pulp markets and difficult logging conditions pushed softwood roundwood prices in the U.S. South up to a two year high. Wood chip prices reached their highest price since WRQ started tracking global wood costs in 1988. Wood chip prices in Western Canada have also gone up steadily the past 12 months and were 12% higher in the 1Q/10 than the same quarter in 2009. Even though prices have increased, pulp mills in the two regions currently have among the lowest softwood fiber costs in the world.

Global hardwood fiber markets were also mixed, with higher prices this quarter in the U.S. South, Russia, and Indonesia, while prices were down the most from the previous quarter in Sweden, Finland, Spain, and Brazil. As a result, the Hardwood Wood Fiber Price Index (HFPI) was slightly lower this quarter, to $105.90/odmt. Despite the small recent decline, the HFPI was 15% higher in the 1Q this year compared with the same quarter last year. Russia, Chile, and Indonesia continue to have the lowest hardwood fiber costs in the world, with prices being less than half of what the high-cost regions of Europe have. More information is available online