Hardwood pulpwood cost increases raise HFPI price index

Hakan Ekstrom, Wood Resources International LLC
February 06, 2017
By Hakan Ekstrom, Wood Resources International LLC
Feb. 6, 2017 - Hardwood fibre prices have slowly turned around this year with the HFPI price index being up 5.6 per cent from the 1Q/16 to the 3Q/16, according to the Wood Resource Quarterly.

The softwood fibre price index SFPI fell in the 3Q/16 both because of lower costs in local currencies and a stronger US dollar.

The two Global Wood Fibre Price Indexes were close to parity in the 3Q/16. The Hardwood Wood Fibre Price Index (HFPI) has rebounded by 5.6 per cent from the 1Q/16 when it reached an 11-year low. The biggest price increases this year have been in Brazil, Indonesia, Australia and Chile where prices have gone up despite the strengthening of the local currencies. However, hardwood fibre prices have not gone up in all markets this year. Hardwood pulplog prices were lower throughout Europe, Eastern Canada and the U.S. South.

Except for Russian pulpmills, which have by far the lowest hardwood fibre costs in the world, hardwood pulp-producing regions throughout North America, Europe and Latin America currently have wood costs ranging in a fairly narrow range between US$75/odmt to US$100/odmt. Five years ago, when the HFPI reached its all-time-high, this range was substantially wider at US$75/odmt to US$175/odmt.

Softwood chip and pulplog prices fell in the local currencies in much of Europe and North America which, together with a stronger U.S. dollar against the Canadian dollar and the Euro, resulted in a decline of the Softwood Wood Fibre Price Index (SFPI) in the 3Q/16. The SFPI is currently close to the lowest level in over ten years. During the past 12 months, softwood fibre costs in US dollar terms have fallen the most in the U.S. Northwest, British Columbia, France, Norway and Germany, while they have gone up the most in Brazil, New Zealand and Japan.

Note: The Global Wood Fibre Price Index is a weighted average of delivered wood fibre prices for the pulp industry in all regions tracked by the publication Wood Resource Quarterly. These regions together account for 85-90 per cent of the world’s wood-based pulp production capacity. The price is based on current quarter average prices, and country/regional wood fibre consumption data. The global average price for softwood and hardwood is calculated in nominal US$ per oven-dried metric ton (odmt) of wood fibre.

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