The costs of wood fiber for the world’s pulp mills have trended downward the past two years because of reduced pulp and paper production, and in some regions, as a result of higher supply of lower-cost fiber. This trend continued in the 1Q/13 when the Hardwood Wood Fiber Price Index (HFPI) fell by 1.1 percent to $103.66 per oven-dry metric ton (odmt), which was 12 percent below the all-time high in the 3Q/11, as reported by the Wood Resource Quarterly.
However, the price trends were mixed in the 1Q/13, with hardwood fiber prices lower in Asia and Eastern Canada and slightly higher in Europe and Latin America as compared to the 4Q/12. Eucalyptus pulpwood prices in Brazil have fallen more than in most other regions the past two years, with 1Q/13 prices being down over 30 percent since 2011. This dramatic decline has resulted in Brazilian pulp mills now enjoying the fourth lowest wood fiber costs in the world, behind Russia, the US South and Chile, respectively.
The Softwood Wood Fiber Price Index (SFPI) in the 1Q/13 was practically unchanged from the 4Q/12 at $99.90/odmt. The SFPI has inched downward for seven consecutive quarters and is currently down 8.8 percent from the most recent peak in 2Q/11, according to the WRQ. The biggest changes in the 1Q/13 in US dollar terms were the declines in chip prices in Eastern Canada, Japan, Western Canada and the US Northwest. The biggest increases occurred in France and Germany.