Wood Fiber Prices Trend Downward in World Pulp Producing Regions

Wood costs for the global pulp industry have trended downward in a majority of the pulp-producing regions of the world the past two years, according to the Wood Resource Quarterly (WRQ), Seattle, Wash., USA. This is primarily due to lower market pulp prices as well as reduced pulp production and increased supply of wood fiber in some regional markets, WRQ notes.
 

As the costs of energy, labor, and chemicals have changed relatively less than those of wood fiber during the past year, wood cost as a percentage of total pulp production costs have fallen. In the 2Q/13, wood fiber costs accounted for slightly more than 59% of the production costs on a worldwide basis, down from approximately 63% in the 2Q/12, but up from 51% in 2006, according to Fisher International.
 

Although wood fiber prices have trended downward for most of the past few years, softwood fiber prices were actually up from the previous quarter in the 3Q/13 in most countries worldwide, with just a few exceptions including Sweden, Brazil, and Australia. The largest price increases were seen in the U.S. South, Germany, France, and Spain. 

WRQ reports that the Softwood Fiber Price Index (SFPI) edged up to $97.94/odmt in the 3Q/13. This was $0.19/odmt higher than in the previous quarter but more than 10% lower than two years ago. 

The Hardwood Fiber Price Index (HFPI) fell for the fourth consecutive quarter to $98.15/odmt in the 3Q/13. This was down 2.3% from the previous quarter and the lowest level since the 2Q/09. The biggest price declines have been in Asia and Latin America, while wood costs in Europe, Russia, and North America have continued to be relatively stable the past year. In just two years, the HFPI has fallen by almost 17%.