Study: Wood fiber demand to increase

By Ryan C. Christiansen
Web exclusive posted August 8, 2008 at 9:17 a.m. CST

A significant increase in demand for wood fiber from wood waste biomass-burning power companies in the southern United States, as well as an increase in the amount of wood pellets exported to Europe for energy production, will drive prices for forest products higher, according to a study released August 4 by Forest2Market, a timber industry market analysis company in Charlotte, N.C.

The study, titled "Quantifying Forest Biomass Resources in the U.S. South," also stated that new facilities to convert biomass into cellulosic ethanol will have an impact on the price of wood fiber. The study is based on transactional data for millions of shipments to mills throughout the southern United States.

According to Forest2Market, the demand for wood fiber in the renewable fuels market is expected to climb from 2 million tons in 2008 to at least 13.5 million tons in 2020. The demand is primarily for pulpwood and wood chips and secondarily for construction and demolition debris, as well as leftover woody biomass from timber harvesting operations.

The impact of the renewable fuels market on the price of wood fiber will be much steeper and more disruptive than the impact the oriented strand board market has had during the past 15 years, the Forest2Market said.

The analyst group recommends that forest product companies should establish stronger relationships with suppliers and create more efficient transportation systems to weather the impending price increases.