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Global hardwood fibre for pulp up at the end of 2020: WRQ


May 13, 2021
By Wood Resources International LLC

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Hardwood fibre costs for pulp mills worldwide increased modestly at the end of 2020 but were still substantially lower in many markets compared to late 2019, according to the latest Wood Resources International wood fibre market report.

Increased demand for hardwood fibre in key pulp-producing countries and a weaker U.S. dollar resulted in higher hardwood pulplogs prices in Q4 2020.

The Global Hardwood Fiber Price Index (HFPI) was up 1.4 per cent from Q3 ’20 to Q4 ’20, the second quarter-over-quarter increase of the U.S. dollar denoted Index from its 15-year low in Q2 2020.

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Prices rose the most in Latin America and Indonesia, while the price gains were more modest in North America and Central Europe.

Despite prices increases during the second half of 2020, hardwood pulplog costs were substantially lower in Q4 ’20 than in the Q4 ’19 in most of the 15 countries tracked by the Wood Resource Quarterly, with prices declining by five to 15 per cent year-over-year in U.S. dollar terms.

Softwood fibre costs also increased globally in Q4 ’20, except for pulp mills in the U.S. and Germany, where healthy production levels in the sawmilling sector generated more residuals and, as a consequence, mills had less need for costlier pulplogs.

Prices for softwood residual chips in the US Northwest fell by three per cent quarter-over-quarter and were as much as 19 per cent lower than in the Q4 ’19 because of high operating rates in the region’s sawmills. In the U.S. South, where fibre prices typically fluctuate much less than in the US Northwest, average chip prices were down one percent quarter-over-quarter to a two-year low.

In Germany, softwood chip prices continued to slide in Q4 ’20. The significant increase in byproducts generated by Germany’s lumber producers has positively impacted the total softwood fibre costs for the pulp industry in the region.

In just three years, wood chip prices have fallen by half to a level last seen in 2003, according to the WRQ. The reduced fibre prices are good news for German pulp producers as wood fibre costs account for almost 50 per cent of the manufacturing costs.

Softwood fibre price changes were mixed over the past year. There were declines in North America, Central Europe, Russia, Brazil, Oceania, and Japan compared to increases in the Nordic countries, Chile and China. When averaged out, there was ultimately a slight rise in the Global Softwood Fiber Price Index (SFPI) during 2020.

The annual average SFPI of slightly less than $87/odmt was the lowest level since 2004.

The Wood Resource Quarterly (WRQ) is a 70-page report, established in 1988 and has subscribers in over 30 countries. The report tracks prices for sawlog, pulpwood, lumber and pellets worldwide and reports on trade and wood market developments in most key regions around the world. For more insights on the latest international forest product market trends, please go to WoodPrices.com.