Hardwood fiber prices have fallen dramatically
Wood costs for the hardwood pulp producers have fallen substantially worldwide the past three years, while softwood fiber costs have remained stable over the same period, reports the Wood Resource Quarterly.
Wood fiber costs have developed quite differently the past few years for pulp mills manufacturing softwood pulp, compared to companies producing hardwood-based pulp.
Softwood fiber prices remained relatively stable on a global basis during 2012 and early 2013 when the Softwood Fiber Price Index, SFPI fell to its lowest level in four years, according to the Wood Resource Quarterly. Since the 2Q/13, the SFPI has increased about three percent to just over $100/odmt in the 2Q/14.
Much of the world’s softwood pulp production occurs in the Northern Hemisphere where residuals from the sawmilling sector commonly account for a fairly large share of the pulp industry’s fiber supply. Strong lumber markets are often good news for the pulp industry in North America and Europe because high lumber production results in an abundance of a relatively inexpensive fiber source.
Wood chips prices have fallen substantially since 2012 in four of the regions of the world where sawmill chips account for a majority of the fiber supply, Japan, Western US, Western and Eastern Canada, resulting in improved competitiveness of the pulp and paper industry in those regions.
Contrary to the trend for softwood fiber prices, hardwood fiber prices have fallen dramatically the past three years, with the Hardwood Fiber Price Index, HFPI coming down from a record high of almost $118/odmt in 2011 to $97.01/odmt in the 1Q/14, followed by an increase of 1.8% in the 2Q/14.