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The Global Forest Industry in the 2Q/2015

The Global Forest Industry in the 2Q/2015

Excerpts from the Wood Resource Quarterly (www.woodprices.com)

Global Timber Markets

Sawlog prices fell again in the 2Q/15 in most of the 19 regions worldwide that are part of the Global Sawlog Price Index (GSPI). The Index is at its lowest level since 2009, and is down 20% from its all-time high four years go.The only regions where prices increased in the 2Q were in Northwest Russia andthe Interior of British Columbia.

Global trade of softwood roundwood slowed down towards the end of 2014 and log shipments have continued to be slow during the first half of 2015, with the biggest reduction in imports being in Japan, South Korea and Sweden.

Global Pulpwood Prices

Wood fiber costs for the global pulp industry continued their downward trend in the 2Q/15. The Softwood Fiber Price Index (SFPI) was $91.98/odmt, which was slightly lower than in the previous quarter.

The SFPI index has fallen for four consecutive quarters and was in the 2Q/15 8.4% lower than 2Q/14. The biggest price declines from the 1Q/15 occurred in Brazil, Central Europe and New Zealand.

The Hardwood Fiber Price Index (HFPI) fell one percent from the 1Q/15 to $88.95/odmt in the 2Q/15. The HFPI has declined for four years and is currently 25% below its all-time high in 2011. Fiber prices fell the most in France, Brazil, Indonesia and Australia.

Global Pulp Markets

Despite the recent slowdown, global market pulp production during the first five months of the years was up 3.7% as compared to the same period last year.Prices for NBSK have fallen much of the first eight months of 2015, while BHKP prices have gone up. The price premium for NBSK in Europe has shrunk from over $200/ton last fall to only about $35/ton this summer.

Global Lumber Markets

There have been mixed signals in the global lumber market during the 1H/15.Of the major lumber-importing countries in the world, China, the US and the United Kingdom have increased importation the most during the first half of 2015.

Japan and most countries in Europe have imported less lumber this year as compared to 2014.Exporting countries that have taken advantage of the scattered bright lights in the international lumber market have included Canada, Finland, Russia and Sweden.

Although the good news for lumber producers in the Nordic countries has been higher export volumes in 2015, the bad news has been that the average export price has declined by over 20% this year.

Import volumes to China were 2.4% higher during the first seven months of 2015, with Russian shipments to China having increased 18% and supply from North America and Chile having declined over 10%.

Both domestic and import prices for softwood lumber in Japan moved slightly lower during the summer months, and were close to their lowest levels in over seven years.

Despite substantially lower export prices in Russia, total export volumes have not seen a dramatic increase. Shipments in April and May were practically the same in 2014 and 2015.

Global Biomass Markets

British Columbia’s overseas pellet exports in the 1Q/15 fell by over 6% q-o-q. Pellet exports from the US South also fell back, breaking a four-year continuous increase in overseas shipments.Unusually warm weather, low costs for fossil fuels, and plenty of pellet supply drove the pellet prices in Europe downward during the spring and summer to their lowest levels in over three years.

ENDS


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