Global saw timber markets
• The WRQ Global Conifer Sawlog Price, based on sawlog prices in 19 key
regions worldwide, fell six percent this quarter as lumber markets weakened in
both North America and Europe. In the 3Q, the Index was US$85.92/m3, the
lowest since 1Q/07. The biggest declines in log prices occurred in Western
Canada, Sweden, Germany and the Baltic States as reported in the Wood
Resource Quarterly.
Global pulpwood price
• The average global conifer wood price fell two dollars to $110.43/odmt in the
3Q, the biggest quarter-to-quarter decline since 2001. Despite the fall, the price
was still the second highest ever recorded. Conifer fiber costs were lower in
practically all regions covered by the WRQ in the 3Q (in US $ terms). The
only exceptions were in the US South, France and Norway, where prices were
higher because of tight supply.
• The average non-conifer wood fiber cost was up almost two dollars in the 3Q,
reaching a new record-high of US$110.71/odmt. This was mainly as a result of
higher costs in the US South and Japan as most other regions had lower costs
this quarter.
• With the hurricane season more intensive than usual, wood raw-material
supply flow for both pulpmills and sawmills in the US South was interrupted
in the 3Q. Heavy rainfall following the severe winds drastically reduced both
logging activity and the transport of logs.
• Imports of softwood logs to China have declined for the past three quarters and
were down to 4.4 million m3 in the 3Q, the lowest level since 1Q/05. Russia
continues to be the largest supplier accounting for 81% of total imports,
however the share is down from almost 90% in 2007.
The pulp and paper market
• Market pulp production fell in August compared to July but total production
for the first eight months of the year was still 5.9% higher than last year.
• In North America, pulp production has not change much from last year, but
Latin America has increased production by over 20% this year.
• The NBSK benchmark price (PIX) has fallen dramatically the past four months
from the peak of $910/ton in June to $775/ton in early November. The last
time the price was this low was in May of 2007.
• The PIX price for HBKP pulp has only declined by $90/ton from its peak in
August, reaching $731/ton in the first week of November. The price difference
between softwood and hardwood pulp was down in the 3Q to $44/ton, the
lowest discrepancy in over two years.
The lumber market
• The US lumber market continues to be weak and sawmills have been running
at very low operating rates. The Western Wood Products Association reported
that sawmills in the West ran at 67% of their practical capacity in August.
• Lumber production in Canada is continuing its downward spiral with no end
in sight, reaching a new low in the 3Q. Production was down 26% from a year
ago and 30% lower than two years ago. In recent months, sawmills in British
Columbia have been harder hit than in the eastern provinces.
• The Russian economy started to slow in the 3Q with a decrease in housing
constructions and reduced demand for lumber both domestically and in the
export market. So far this year, lumber production is down about 7% and
logging has declined by about 9% compared to last year. |
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