Hardwood Pulp Wood Prices Rise in Indonesia, Australia, Chile

The two Global Wood Fiber Price Indices were close to parity in the 3Q/16. The Hardwood Wood Fiber Price Index (HFPI) has rebounded by 5.6% from the 1Q/16 when it reached an 11-year low, according to the Wood Resources Quarterly (WRQ), Seattle, Wash., USA. The biggest price increases this year have been in Brazil, Indonesia, Australia, and Chile where prices have gone up despite the strengthening of local currencies. However, hardwood fiber prices have not gone up in all markets this year. Hardwood pulp log prices were lower throughout Europe, Eastern Canada, and the U.S. South.

Except for Russian pulp mills, which have by far the lowest hardwood fiber costs in the world, hardwood pulp-producing regions throughout North America, Europe, and Latin America currently have wood costs ranging in a fairly narrow range between $75/odmt to $100/odmt. Five years ago, when the HFPI reached its all-time-high, this range was substantially wider at $75/odmt to $175/odmt.

Softwood chip and pulp log prices fell in the local currencies in much of Europe and North America, which, together with a stronger U.S. dollar against the Canadian dollar and the euro, resulted in a decline of the Softwood Wood Fiber Price Index (SFPI) in the 3Q/16. The SFPI is currently close to the lowest level in more than 10 years. During the past 12 months, softwood fiber costs in U.S. dollar terms have fallen the most in the U.S. Northwest, British Columbia, France, Norway, and Germany, while they have gone up the most in Brazil, New Zealand, and Japan.

Note: The Global Wood Fiber Price Index is a weighted average of delivered wood fiber prices for the pulp industry in all regions tracked by WRQ. These regions together account for 85%-90% of the world’s wood-based pulp production capacity. The price is based on current quarter average prices, and country/regional wood fiber consumption data. The global average price for softwood and hardwood is calculated in nominal U.S. dollars per oven-dried metric ton (odmt) of wood fiber.