Monday, 24 January 2011 11:30

Forest Products Market Update

Global sawlog prices in the 3Q 2010 were almost back up to pre-crisis levels, reports the Wood Resource Quarterly

Sawlog costs for many sawmills around the world went up during 2010, and the Global Sawlog Price Index reached the highest level in over two years in the 3Q/10, according to the Wood Resource Quarterly. The biggest wood price increases occurred in Western US, Germany, Sweden and Northwest Russia.

Seattle, USA. Sawlog prices have trended upward in almost all regions of the world for the past two years. The Global Sawlog Price Index (GSPI) reached $80.88/m3 in the 3Q/10, which was the highest level since the beginning of the financial crisis in late 2008, according to the Wood Resource Quarterly. The Index, which is based on prices for logs being processed into construction and better-grade lumber, is a weighted average of sawlogs traded in the open market in 19 key regions worldwide.

The GSPI for the 3Q/10 was up 4.8 percent from the previous quarter, which is actually one of the largest quarter-to-quarter increases in 15 years. Compared to a year earlier, the GSPI was 12.8 percent higher. The price increases are partly the result of a weakening US dollar, but log prices have also gone up in the local currencies in most regions. Western and Eastern Canada are the only two regions that currently have lower log costs in the local currency than a year ago. The biggest increases occurred in the US Northwest (+43%), Germany (+28%), Sweden (+24%) and Northwest Russia (22%).

Sawmills in North America, Latin America and Oceania generally have lower costs for wood raw-material than do sawmills in Europe and Japan. The lowest sawlog costs in 2010 were found in Western Canada, Chile and Northwest Russia, while Austria, Germany, Japan and China stand out as the high-cost countries of the world. These regions have been on the high-end of the price spectrum ever since WRQ started tracking sawlog prices in 1995.

The biggest change over the past decade has occurred in Brazil. Ten years ago, sawmills in Brazil had by far the lowest log costs in the world, according to Wood Resource Quarterly. This has changed in recent years, with prices rising closer to the global average. Just in the past two years, log prices have gone up 23 percent in the country. Not all of the increase has been the result of the higher costs in the local Brazilian Real; some is due to the strengthening of the Brazilian currency against the US dollar.

Global timber market reporting is included in the 52-page quarterly publication Wood Resource Quarterly. The report, established in 1988 and with subscribers in over 25 countries, tracks sawlog, pulpwood, lumber and pellet prices and market developments in most key regions around the world.

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    Hakan Ekstrom
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Published in financial News

The value of softwood logs and lumber exported from North America to China reached over 1.6 billion dollars in 2010, which was 150 percent higher than the previous year and more than ten times as much as in 2006, reports the Wood Resource Quarterly.

The full article can be found in the attached PDF file.....

Published in financial News

The wood chip cost discrepancy between pulp mills in Western and Eastern Canada was the lowest it has been in 10 years in the 4Q/10, reports the North American Wood Fiber Review

Over the past 20 years, pulp mills in Eastern Canada have consistently had higher wood fiber costs than the mills in the Western provinces with the exception of a short period in 1995, according to the North American Wood Fiber Review. In the 4Q/10, softwood chip prices had fallen in Quebec and Ontario and increased in British Columbia and Alberta resulting in the smallest cost gap between the two regions in 10 years.

The full article can be found in the attached PDF file.....

Published in financial News

Sawlog costs in Europe have gone up more than lumber prices the past year, reports the Wood Resource Quarterly. With the expected decline in lumber consumption, many sawmills in Europe are considering reductions in their operating rates. As a consequence, prices for sawlogs are likely to drop from their two–year highs in the coming months.

The full article can be found in the attached PDF file.....

Published in financial News

Global sawlog prices have trended upward in almost all regions of the world for the past two years.

After a temporary drop in the 2Q, the Softwood Wood Fiber Price Index (SFPI) increased again in the 3Q to the highest level during the financial crises.  

This year has been a very good year for the world’s producers of market pulp. World production for the first eight months was eight percent higher than last year.

Lumber markets were mixed around the world. In Sweden and Finland, lumber prices trended downward during the first half of 2010. Canadian w est coast spruce-pine-fir prices went up the most, and were 14 percent higher in September than in June.

Woody biomass prices in the US peaked in late 2008 and early 2009 and have fallen until the 2Q this year when they probably bottomed out for this cycle.

The full article can be found in the attached PDF file.....

Published in financial News

Wood fiber costs for the global pulp industry in the 3Q/10 were close to the highest level in two years, reports the Wood Resource Quarterly

The cost for wood fiber accounts for almost 60 percent of the total production costs when manufacturing pulp. Both softwood and hardwood wood fiber price indices, SFPI and HFPI, have increased about six percent over the past year, according to the Wood Resource Quarterly.

The full article can be found in the attached PDF file.....

Published in financial News

FOEX Indexes and Wood Resources International to partner in the launching of Global Wood Chip Price Indices

More than 80 million tons of wood chips, valued at almost ten billion US dollars, are traded annually in the open market worldwide and the shipment volumes are increasing.

FOEX and WRI have agreed to partner in the launching of global wood chip price indices. As for all price benchmarks in FOEX's PIX-index family, the indices will be based on a large number of actual trades and the data will be collected from both sellers and buyers of wood chips. The combined efforts of FOEX and WRI, and the PIX-index system, will ensure that the indices, whose launch is planned for early 2011, will be statistically reliable and thus well suited for numerous market participants. These include forest and energy companies who can use price indices for benchmarking, as well as the financial community, which can use the Indices as price risk management tools.

To learn more about this new, unique benchmark service, may contact either the FOEX representative in bio-indices, Mr. Matti Sihvonen (matti.sihvonen@foex.fi), Timo Teräs, the Managing Director (timo@foex.fi), or Mr. Håkan Ekström, the President of WRI (hekstrom@wri-ltd.com).

The full press release can be found in the attached PDF file.....

Published in Press Releases

China’s hunger for wood raw-material pushes timber prices upward, increasing the importation of logs and wood chips to record levels in 2010, reports the Wood Resource Quarterly

The forest industry in China is continuing its expansion, and with limited domestic timber resources, importation of logs and wood chips are at an all-time high, especially as tight supply of domestic logs has increased local log prices to new highs in the 2Q/10, according to the Wood Resource Quarterly.

The full article can be found in the attached PDF file.....

Published in Asian News

Woody biomass prices in the US increased in the 3Q/10 after having trended downward since early 2009, reports the North American Wood Fiber Review

Prices of wood fiber used for energy declined during most of the recession, partly as a result of the low cost of fossil fuels, which can serve as an alternative source for many industrial energy consumers. However, in the 3Q, biomass prices were up in the South, the Northwest and Southwest, according to the North American Wood Fiber Review. This trend break occurred mainly because of reduced fiber supply and generally lower biomass inventories.

The full article can be found in the attached PDF file.....

Published in Press Releases

Wood costs for sawmills and pulp mills in Sweden on the rise in 2010, reports the Wood Resource Quarterly

Continued healthy markets for lumber, pulp and paper has kept demand for logs at high levels in Sweden. As a result, log and wood chip prices have increased substantially the past 12 months, according to the Wood Resource Quarterly.

The full article can be found in the attached PDF file.....

Published in financial News
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