A plentiful supply of logs together with declining demand has seen prices for sawlogs, pulpwood logs and woodchips slump and decline in most major markets around the world in the 3Q/2019 according to the 3Q 2019 issue of the Wood Resource Quarterly (WRQ) published by Wood Resources International.
A plentiful supply of logs coupled with declining demand moved sawlog prices downward in most major markets around the world in the 3Q/19. For pulpwood, the biggest price reductions came in Central Europe, where storm-damaged logs flooded the market.
With falling sawlog prices throughout the world, the Global Sawlog Price Index (GSPI) took a hit in the 3Q/19 and had its third-largest quarter-on-quarter (q-o-q) decline in a decade. The European Sawlog Price Index (ESPI), which has been in steady decline for two years, fell another 5.0 percent in the 3Q/19, as reported in the latest issue of the Wood Resource Quarterly (WRQ).
Prices for softwood pulpwood logs and woodchips either remained unchanged or declined in the 3Q/19 compared to the previous year. The biggest price reductions were seen in Austria, Germany, and Sweden. The only region with higher prices in the 3Q/19 was Western Canada, where pulpwood log prices increased by 10 percent from the previous quarter.
The Softwood Fiber Price Index (SFPI) fell by 2.2 percent q-o-q in the 3Q/19 and hit its lowest level in two years. The Hardwood Fiber Price Index (HFPI) has been fairly stable over the past two years. In the 3Q/19, the HFPI experienced a slight decline from the previous quarter but increased by about one percent from the 3Q/18.
Pulp prices have continued their decline that started in the 4Q/18. In October, the Northern bleached softwood kraft (NBSK) price in Europe ranged from US$820-850 per tonne, down from US$1 300 per tonne in October last year. With pulp inventories coming down to levels similar to last year, resistance to further price reductions is becoming stronger.
the 3Q/19, as reported in the latest issue of Wood Resource Quarterly (WRQ) published by Wood Resources
International (graphic courtesy Wood Resources International).
In lumber markets, Russia has surpassed Canada to become the world’s largest exporter of softwood lumber in 2019 and is on track to ship almost 32 million m3 of lumber this year, representing almost a quarter, 23 percent, of globally traded lumber. Lumber production has fallen in both the US and Canada in 2019 because of disappointingly low activity in the US housing market and meager demand for North American lumber in overseas markets.
Lumber import prices to China have fallen for three consecutive quarters and in the 3Q/19 hit their lowest level since 2016. Germany’s exports of softwood lumber is likely to reach a ten-year high in 2019, reports the WRQ. The biggest increases in shipments have been to China, the US, the UK, and India. The gross margins for lumber producers in Finland, as reported in the WRQ, have fallen more rapidly than those of their Swedish competitors during 2018 and 2019.
The European Pellet Price Index (EPPI), a weighted import price for industrial pellets in Europe, has trended upward over the past two years to reach over EUR 160 per tonne in 3Q/19. North America exported 2.5 million tonnes of pellets in the 3Q/19, representing a 6 percent increase from the 3Q/18. The almost 1.8 million tonnes exported from the United States to Europe in the 3Q/19 was the highest volume on record.
