Global Fiber Trade up, Prices down

During the 1Q/14, trade of logs was up in all major markets of the world compared with the 1Q/13. For the four largest exporting countries, the increase was 17%, with the biggest rise in shipments coming out of Russia, according to Wood Resources Quarterly (WRQ), Seattle, Wash., USA. 

Lower wood fiber prices in local currencies and a strengthening U.S. dollar resulted in declines in both the Softwood and Hardwood Fiber Price Indices (SFPI and HFPI), which are the price indices that track wood costs for the global pulp industry. The SFPI fell from $99.51/odmt in the 4Q/13 to $99.43/odmt in the 1Q/14, with the biggest price reductions occurring in Canada, Russia, Australia, and Brazil, WRQ reports.

The prices for hardwood pulp logs have trended downward in many markets for more than two years, which is reflected in an HFPI Index that has constantly fallen each quarter since its peak in the 3Q/11. In the 1Q/14, the HFPI was $97.01/odmt, down from $97.59/odmt in the previous quarter. Prices fell the most in Russia, Eastern Canada, Western U.S., and Brazil.

Production of market pulp fell in two of the three major pulp-producing regions in the world in early 2014. Production was down 5.2% in North America and 4.2% in Europe. In Latin America, production was up 2.6% mainly because of higher exports to China and Europe.

Prices for NBSK pulp have been holding up better than those for HBKP this year. With the recent opposing price trends for softwood and hardwood pulp, the price discrepancy between the two major pulp grades has widened to a two-year record. With no slowdown in sight, North American wood pellet exporting companies keep building new facilities to manufacture pellets for the European market. Export volumes hit a new record high in the 4Q/13 and the total shipments for 2013 were up almost 50% from the previous year.

South Korea has increased importation of pellets dramatically the past two years, with Vietnam and Canada being the major suppliers, WRQ notes.

More information is available online.