Global Fiber Prices Rise as Pulp Prices, Mill Operating Rates Increase
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Many of the price increases around the world during 2013 were the result of substantially higher trade of logs and improved lumber prices in a number a key markets, particularly in North America. In 2013, global trade of logs was up by as much as 17% from 2012, totaling 84 million cubic meters. This was the highest shipments of logs since 2007.
The two global wood fiber indices, SFPI (Softwood Wood Fiber Price Index) and HFPI (Hardwood Wood Fiber Price Index), trended in opposite directions during most of 2013. WRQ notes. Stronger markets and higher prices for softwood fiber-based pulp and paper products resulted in higher demand, and rising prices, for both softwood chips and roundwood.
The SFPI increased for two straight quarters to reach $99.51/odmt in the fourth quarter of 2013. The largest increases were in Sweden, France, Germany, and New Zealand. Hardwood fiber price changes have been mixed with higher prices in the fourth quarter of 2013 in Europe, with declining prices in Chile, Indonesia, Japan, and Eastern Canada. Some of the declines have been the result of a strengthening U.S. dollar.
The HFPI fell for the fifth consecutive quarter to $97.59/odmt in the fourth quarter of 2013, the first time this index was lower than SFPI since second quarter of 2008.
The operating rates for the world’s pulp mills creeped up to 93% in November. Global market pulp production for 2013 was about 3.6% higher than in the previous year.
NBSK (northern bleached softwood kraft) pulp prices have steadily trended upward for almost 18 months, while HBKP (hardwood bleached kraft pulp) prices have stayed flat. The price discrepancy between the two major pulp grades has been unusually high the past six months.
After two quarters of double-digit growth, wood pellet export volumes to Europe increased just 2% in the third quarter of 2013. Higher pellet demand and increased costs for wood raw-material pushed residential pellet prices upward in the German domestic market in 2013. Pellet prices in the three major markets in Europe, Sweden, Germany and Austria, have converged over the past four years.
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