Wood fiber markets are largely retreating across North America as firms shutter less competitive operations. In the Pacific Northwest, WestRock’s closure of its Tacoma, Washington, pulp mill adds to Packaging Corp. of America’s Wallula, Washington, curtailment and the continued shuttering of Cosmopolis. In Eastern Canada, Domtar is closing its Espanola, Ontario, pulp mill. Western Canada continues to struggle with fiber availability, and Paper Excellence extending the curtailment at their Crofton, British Columbia, mill adds to the list of regional closures and curtailments. The South is losing WestRock’s pulp mill in Charleston, South Carolina, Evergreen Packaging’s Canton, North Carolina, pulpmill, and a Roseburg particleboard mill in Taylorsville, Mississippi. Capital is still flowing into the forest industry. Two new oriented strand board mills are being built in the South, in addition to several new and expanding pellet mills. Longview, Washington, is also gaining a new pellet mill, being built by Drax. In addition, the recently announced merger of WestRock and SmurfitKappa creates the largest paper manufacturer in the world. Despite these investments, mill events impacted markets. One forestry executive in the South observed, “Pulp mill closures, like those in Charleston and Panama City, have a ripple effect” on regional pulpwood and fiber markets. On the same theme, a regional manager for a wood products manufacturer with operations in the Lake States and south central U.S., said, “Pulpwood is in the trash in my areas right now. Some guys are leaving it in the woods.” With respect to fiber prices, the Northeast stands out as an exception, as prices increased in all four fiber categories (Figure 1). Hardwood residual chip prices increased the most with an 18% rise. Hardwood roundwood prices jumped 11% while softwood roundwood prices increased 14%. Despite weak finished product markets, these increases are likely due to difficult logging conditions brought on by the wettest summer on record for the region. In the West, softwood fiber prices fell 13% for chips and pulp logs. The reset from high prices last year and continued contraction in mill demand resulted in lower prices year-over-year for chips and pulplogs. U.S. South fiber prices remained less volatile than other North American regions. Southeast softwood chips fell 3% quarter-over-quarter. All southern fiber prices are 4-7% lower year-over-year. Weak paper markets over the past year continue to erode fiber demand and contribute to the price reductions. In western Canada, British Columbia softwood chip prices fell 17% and softwood pulplog prices dipped 4%. Despite fiber shortages, prices fell recently, though both chips and roundwood are slightly higher on a year-over-year basis. In eastern Canada, softwood chip prices fell 6% in Ontario and Quebec. Maritime roundwood prices rose for both softwood and hardwood, the only North American region with prices up across all products.This article includes data from the Forisk Wood Fiber Review and the Forisk Research Quarterly. Authors: Brooks Mendell and Stephen Wright Forisk Consulting LLC 770-725-8477 bmendell@forisk.com

North American Wood Fiber Pricing and Demand

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