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Report: Global fibre prices drop as pulp prices climb up in Q1


June 4, 2020
By Wood Resources International LLC

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Photo: Annex Business Media

Wood Resources International has released its Wood Resource Quarterly report on the global forest industry in the first quarter of 2020. Here are the highlights:

Global pulpwood markets

Wood fibre costs fell for many hardwood pulp-producing countries worldwide in the Q1 2020. The biggest declines were seen in the U.S. Russia, and Latin America.

The Hardwood Fiber Price Index (HFPI) dropped 4.2 per cent in Q1/20. This was the fourth quarter-over-quarter decline, resulting in a 9.2 per cent reduction of the index since Q1/19 and the lowest price in four years.

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The Softwood Fiber Price Index (SFPI) also spent last year in decline, although not as severe of one as the HFPI.

Global pulp markets

Following a plunge in pulp prices of almost 30 per cent in Europe and approximately 20 per cent in North America from late 2018 to late 2019, prices bottomed out and even saw small price increases in early 2020.

The premium for softwood pulp over hardwood pulp is currently about $160/ton, the highest premium in over a year, and substantially more than the ten-years’ average premium of $106/ton.

Global timber markets

There were relatively few price changes for sawlogs throughout the world in Q1/20 despite interruptions in trade and uncertainty in short-term lumber demand in many of the key markets.

The Global Sawlog Price Index (GSPI) remained practically unchanged from Q4 2019 to Q1 2020. This followed a period of two years when the index was in constant decline.

Over the past two decades, sawlog prices in Eastern Europe have gone up the most on the continent, albeit from low levels, while prices in Central Europe have declined substantially, particularly in 2019.

Global lumber markets

Importation of softwood lumber to the U.S. fell for the third consecutive year in 2019. However, in Q1/20, the import volume was up year-over-year, and the month of March was surprisingly strong despite the coronavirus epidemic.

Softwood lumber imports to China plunged in Q1/20, 14 per cent lower than the previous quarter and 37 per cent lower than the all-time-high in Q2/19.

Profitability generally improved for lumber producers around the world in Q1/20. This followed a year of mostly gloomy financial news with many lumber producers making very low or even no profits at all.

Declining export prices for sawmills in the Nordic countries coupled with only incremental reductions in log costs gradually reduced profitability during 2019 and early 2020.

Global biomass markets

Domestic prices for residential pellets in the three major markets in Europe (Austria, Germany and Sweden) held up quite well during the first five months of 2020 and were just slightly lower than during the same period in 2019.

Wood Resource Quarterly (WRQ) is a 56-page report, established in 1988 and with subscribers in over 30 countries, tracks prices for sawlog, pulpwood, lumber & pellets worldwide. The WRQ also 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 www.WoodPrices.com.