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Report: Pulpwood, pulp prices down in most regions in Q3 2019


December 9, 2019
By Wood Resources International LLC

Topics
Pulp logs on a truck

Wood Resources International has released its Wood Resource Quarterly report on the global forest industry in the third quarter of 2019. Highlights are as follows:

Global pulpwood prices

Prices for softwood pulplogs and wood chips either remained unchanged or declined in Q3 2019 compared to previous year. The biggest price reductions were seen in Austria, Germany and Sweden. The only region with higher prices in Q3 2019 was Western Canada, where pulplog prices increased by 10 per cent from the previous quarter.

The Softwood Fiber Price Index (SFPI) fell by 2.2 per cent quarter-over-quarter in Q3 2019 and hit its lowest level in two years.

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The Hardwood Fiber Price Index (HFPI) has been fairly stable over the past two years. In Q3 2019, the HFPI experienced a slight decline from the previous quarter but increased about a one percent from Q3 2018.

Global pulp markets

Pulp prices have continued their decline that started in Q4 2018. In October, the NBSK price in Europe ranged from $820-850/ton, down from $1,300/ton in October last year. With pulp inventories coming down to levels similar to last year, resistance to further price reductions is becoming stronger.

Global biomass markets

The European Pellet Price Index (EPPI), a weighted import price for industrial pellets in Europe, has trended upward over the past two years to reach over €160/ton in Q3 2019.

North America exported 2.5 million tons of pellets in Q3 2019, representing a six per cent increase from Q3 2018. The almost 1.8 million tons exported from the United States to Europe in Q3 2019 was the highest volume on record.

Global timber markets

A plentiful supply of logs coupled with declining demand moved sawlog prices downward in most major markets around the world in Q3 2019. The biggest price reductions came in Central Europe, where storm damaged logs flooded the market.

With falling sawlog prices throughout the world, the Global Sawlog Price Index (GSPI) took a hit in Q3 2019 and had its third largest quarter-over-quarter decline in ten years.

The European Sawlog Price Index (ESPI), which has been in steady decline for two years, fell another five per cent in Q3 2019, as reported in the latest issue of the WRQ.

Global lumber markets

Russia has surpassed Canada to become the world’s largest exporter of softwood lumber in 2019 and is on track to ship almost 32 million m3 of lumber this year, representing 23 per cent of globally traded lumber.

Lumber production has fallen in both the US and Canada in 2019 because of disappointingly low activity in the US housing market and meagre demand for North American lumber in overseas markets.

Lumber import prices to China have fallen for three consecutive quarters and in Q3 2019 hit their lowest level since 2016.

Germany’s exports of softwood lumber is likely to reach a ten-year high in 2019. The biggest increases in shipments have been to China, the US, the UK and India.

The gross margins for lumber producers in Finland, as reported in the WRQ, have fallen more rapidly than those of their Swedish competitors during 2018 and 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.