Home Blogs Hakan Ekstrom Pulpwood prices in Western US were up almost 50 percent in 2Q/11

Pulpwood prices in Western US were up almost 50 percent in 2Q/11

Wood costs for pulp mills in Western US have increased over the past 12 months, reaching their highest level since early 2008 in the 2Q/11, reports the American Wood

Fiber Review. Pulp mills in the US South have slightly lower wood costs than they did in 2010, and continue to have the lowest fiber costs in North America.

 

Pulp mills in the Western US have seen their wood costs go up for four consecutive quarters, and this region, together with Quebec, had the highest 2Q/11 wood

fiber costs in North America, according to the North American Wood Fiber Review (NAWFR). Douglas-fir and hemlock residual chip prices in the US Northwest were up 42 percent

between 2Q/10 and 2Q/11, reaching their highest levels since early 2008. Pulplog prices have increased more than for wood chips, reaching a 16-year high in the 2Q/11.

Historically, the region’s pulp industry has relied on 70-80 percent sawmill residuals for its fiber furnish, but in 2011, softwood residuals accounted for approximately 55 percent

of the softwood fiber receipts as reported by the Forest Products Association, with the remaining being chips manufactured from roundwood. The current price surge in Western US has been

 the result of four primary factors: sawmill lumber production well below historical volumes, high pulpmill production due to strong product prices, a reopened pulpmill in the state of

Washington, and strong Chinese demand for logs. Violent storms in Mississippi and Alabama, flooding along the Mississippi River and wildfires primarily in Georgia and Texas

interrupted the regular flow of wood fiber in the US South during the 2Q. The extreme conditions resulted in curtailments of a few pulpmills and chipping facilities and temporary reductions

 in fiber demand. To some extent, this balanced out the reduction in pulpwood production. While salvaging is difficult and more costly than ordinary timber harvesting, the sheer volume of

 wood that is under pressure to be brought in before it deteriorates will bring a surge of supply to the market. Softwood and hardwood pulpwood prices in the 2Q were unchanged from the

 previous quarter, according to NAWFR, but can be expected to decline in the 3Q as a result of the large volume of damaged wood in the region. With other North American regions

experiencing significant increases in wood costs in the 2Q, the South’s low, stable wood prices continue to make the region’s pulp industry very competitive.

 

Hakan Ekstrom

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Mr. Håkan Ekström is the principal of Wood Resources International LLC, an internationally recognized consulting firm providing forest market analysis and wood price reporting for the forest industry worldwide.  He has, for the past 22 years, worked in various capacities relating to wood products utilization, international forest products marketing and global wood supply. His international experience is extensive, including visitation of more than 20 countries to research forest resource issues and to study forest products industry developments on-site.

He is also the editor of the Wood Resource Quarterly and the North American Wood Fiber Review, two reports tracking wood markets and focus on the global and the North American market, respectively. The reports include information about wood costs, wood supply and trade of wood products in all the major regions of the world.

 Wood Resources International LLC

Track global pulpwood and sawlog prices - subscribe to the Wood Resource Quarterly - read by forest industry analysts in over 25 countries since 1988.

www.woodprices.com

 
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