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Global hardwood, softwood fibre prices fall for pulp manufacturers in Q2 2020

Wood Resources International’s Hardwood Fiber Price Index fell to a 16-year low in second quarter of 2020, driven by lower pulplog prices in Eastern Canada, Brazil and Russia.

Wood raw-material costs fell for most pulp manufacturers throughout the world in Q2 2020, reducing WRI’s two fibre price indices for the fifth consecutive quarter.

The quarter-over-quarter declines for the Hardwood Fiber Price Index (HFPI) and the Softwood Fiber Price Index (SFPI) were 4.8 per cent and 1.9 per cent, respectively.

The HFPI Index reached $79.88/odmt in Q2 2020, the lowest level since 2004, and substantially below the average rate since the Index’s inception in Q1 1988.

The HFPI is composed of regional prices for wood chips and pulplogs delivered to pulp mills in 14 key regions around the world, and is weighted based on the proportional amount of fibre consumption in each region.

Over the past year, fibre prices (in US dollars) have fallen the most in Brazil, Russia, Eastern Canada, France, Chile, and the U.S. South (in descending order).

Brazil has a long history of having some of the lowest wood fibre costs in the world. This was cemented in Q2 2020 when the country had both the lowest softwood and hardwood fibre costs of all 18 regions tracked by the Wood Resource Quarterly.

Hardwood fibre prices have dropped in U.S. dollar terms, in part due to the strengthening of the dollar against all currencies in the WRQ countries over the past year, barring the yen, over the past year.

In local currencies, wood fibre costs from Q2 2019 to Q2 2020 have fallen the most in France, Eastern Canada, the U.S. South, Russia and the U.S. Northwest (in descending order).

Prices for softwood fibre have also been declining the past few years, albeit in a less dramatic fashion than hardwood fibre. As a result, the SFPI was almost six dollars per odmt higher than the HFPI in Q2 2020, the biggest discrepancy since Q2 2007.

Over the past year, softwood fibre prices (in U.S. dollars) declined predominantly in Latin America and Europe. Prices in Brazil and Chile were down because of the weakening local currencies, while an oversupply of residues and pulplogs in Central Europe resulted in continued downward price pressure on wood fibre in key markets.

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.