Analytics, EU – Baltic States, Woodwork
International Internet Magazine. Baltic States news & analytics
Friday, 26.04.2024, 18:07
Wood Fiber Costs Declined for both Softwood and Hardwood Pulp Producers in 2019 and early 2020
The relatively steep decline took prices in the US South
down to their lowest levels in almost three years. The major driver of
declining pulplog prices was the reduction in log demand from regional
papermills towards the end of the quarter as the result of the COVID-19
pandemic.
The early 2020 price declines in Latin America were largely
the result of currencies weakening against the US dollar. From the 4Q/19 to the
1Q/20, the Brazilian Real and the Chilean Peso fell 8.2% and 6.2% against the
US dollar, respectively.
As a consequence of falling wood fiber prices in the key
markets worldwide, the Hardwood Fiber Price Index (HFPI) dropped 4.2% q-o-q in
the 1Q/20. This was the fourth consecutive q-o-q decline, bringing the average
price to the lowest it has been in four years. As a percentage, it has fallen
9.2% since the 1Q/19.
The Softwood Fiber Price Index (SFPI) also declined last
year, although not as severely as the HFPI. In the 1Q/20, the Index was 5.6%
lower than in the same quarter in 2019. The biggest price declines came in
Central Europe, Latin America, and Oceania, while on the contrary there were
actually small increases in prices for softwood fiber in the US South, Eastern
Canada, and Sweden.
Pulpmills in Austria, Germany, and France have seen their
wood fiber costs decline quite substantially in the past year. Wood fiber is
dropping in price both due to an increased supply of lower-cost residuals from
the region’s sawmills and to substantially lowed costs for pulplogs, which have
been plentiful as a result of the large supply of beetle-killed logs WRI Market
Insights 2020 - a subscription service from Wood Resources International
International Wood Fiber Prices Wood Resources International in Central Europe.
Softwood pulplog prices in Germany have been particularly hard hit during 2019,
with average prices falling 28% from the 1Q/19 to the 1Q/20. Spot prices have
been reported to have plunged to the low to mid $30s in early 2020, levels that
barely cover the logging and hauling costs. The historically low log prices in
Germany are expected to stay at their current levels assuming there continues
to be a surplus of logs in the domestic market, as well as weak demand for
market pulp and selected paper grades.
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