WRQ: Wood fiber, sawlog prices fall

Web exclusive posted Jan. 16, 2009, at 9:39 a.m. CST

Wood Resources Quarterly, which is published by Washington-based Wood Resources International LLC, stated in its latest market report that during the third quarter of 2008 the cost of wood fiber fell for the first time in many years in practically all major pulp-producing regions in the world. According to WRQ this drop was the result of two main factors � the strengthening on the U.S. dollar combined with a reduced demand from pulpwood.

The average global softwood pulp price fell 2 percent during the third quarter of 2008, to $110.43 per oven-dry metric ton. This was the largest quarter-to-quarter decline since 2001. The average price was up 11 percent from 2007 and up 26 percent from 2006. Softwood fiber costs were lower in most of the 16 regions covered by the WRQ during the quarter. Exceptions included France, Norway and the southern region of the U.S. Prices in these regions were higher due to tight supply.

The average hardwood fiber cost was up almost $2 during the third quarter, reaching a record high of $110.71 per oven-dry metric ton. This increase was the result of higher costs in Japan and the southern region of the U.S., since most other regions had lower costs during the quarter. This marked the third time in 20 years that the global average hardwood price was higher than the softwood price.

WRQ also reported that sawlog prices fell 5 to 12 percent worldwide in the third quarter of 2008. This was due to reduced consumption of lumber in North America and Europe. The WRQ global conifer sawlog price fell 5.8 percent to $85.92 per cubic meter during the third quarter of 2008, which was the lowest level since the first quarter of 2007. The largest declines in log prices occurred in western Canada, Sweden, Germany, the Baltic States and New Zealand. In the U.S., prices were down approximately five percent from the preceding quarter, while log costs in Brazil and Chile were largely unchanged.

Global pulpwood and sawlog market updates are included in WRQ. The report was established in 1988 and tracks wood prices in most regions around the world. It also includes regular updates of international timber, pulp, lumber and biomass markets.