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WRQ: Global pulp markets relatively stable in Q2 2020


September 9, 2020
By Wood Resources International LLC

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Photo: Annex Business Media

Global pulp markets have remained relatively stable this year, reports Wood Resources International (WRI) in its latest report on the global forest industry’s performance.

Highlights from Q2 2020 from WRI’s Wood Resource Quarterly are as follows:

Global pulpwood markets

Wood raw-material costs fell for most pulp manufacturers throughout the world in Q2 2020, which reduced WRI’s two fibre price indices for the fifth consecutive quarter. The Hardwood Fiber Price Index (HFPI) dropped to its lowest level since 2004.

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The world’s two largest purchasers of wood chips, China and Japan, drastically reduced their chip importation in Q2 2020, as the COVID-19 epidemic took its toll on pulp and paper consumption in the two countries.

Global pulp markets

Prices for hardwood market pulp (HBSK) have remained practically unchanged during the COVID-19 epidemic, despite short-term increases in demand for tissue and other paper hygiene products.

Prices for softwood pulp (NBSK) have inched up slightly this year from a three-year low in early 2020.

Global timber markets

Sawlog prices fell in most of the major regions of the world in Q2 2020. A strengthening U.S. dollar, weaker log demand early in the quarter, and sufficient log supply in some markets contributed to the lower prices.

The Global Sawlog Price Index (GSPI) declined four per cent quarter-over-quarter to its lowest level in over ten years, reports the Wood Resource Quarterly.

The European Sawlog Price Index (ESPI) has fallen 9.1 per cent in the past year. The largest sawlog price decreases have occurred in Central Europe.

Global trade of softwood logs fell by approximately 15 per cent year-over-year during the first half of 2020 as the consumption of lumber dropped throughout the world.

Global lumber markets

The good news for lumber producers in North America has been the increased usage of wood products in the repair and remodelling sector.

U.S. softwood lumber prices have risen spectacularly this year. Market prices for commonly traded grades have more than doubled from May to August.

In Q2 2020, China increased importation of softwood lumber by 42 per cent quarter-over-quarter, reaching 7.1 million m3. This large increase followed a quarter where import volumes had fallen to a four-year low.

As estimated eight per cent of globally traded lumber is shipped to the Middle East/Northern Africa (MENA) region. Following two years of increases, this year saw imports decline.

Record high lumber prices in the U.S. and slightly lower costs for sawlogs moved Q2 2020 gross margins for U.S. sawmills to some of the highest levels seen since 2005.

Global biomass markets

Import prices for industrial wood pellets fell quarter-over-quarter in Q2 2020 for the four major markets in Europe, with the largest declines occurring in Denmark and Belgium.

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.