Wood Costs for Pulpmills in Western US Higher Than in the US South in 2007
Wood fiber costs, the major cost component when manufacturing pulp, fell sharply in western US in 2007 as fiber supply and demand come in balance towards the end of the year.
Seattle, WA, February 15, 2008 --(PR.com)-- Wood fiber prices in the US Northwest experienced a roller-coaster ride in 2007. After an event-filled year, the wood fiber market had a temporary breather in the 4Q with only minor price adjustments.
The average softwood residual chip price was about $95/odmt (oven-dry metric ton) last quarter, which was $23/odmt more than in the US South, according to the wood market report the North American Wood Fiber Review.
Prices in the western states have fallen almost 20% since their peak in the 1Q/07. Despite the substantial decline, wood chip costs are still almost 20 dollars higher than they were two years ago. With the tight wood fiber market and with many sawmills struggling to keep operating in a lousy lumber market, it is not likely that residual chip prices will decline any further in the near-term, but rather that they will start to move up again.
With the declining supply of residual chips from sawmills, pulpmills have had no other option than to use chips manufactured from roundwood – a more expensive alternative. Despite the increased demand for pulplogs in the northwest, costs have actually declined by over 20% since a year ago as the supply situation has improved. Log costs are currently the lowest they have been in over two years. However, for several recent timber sales, pulplog prices have been higher than in the 4Q, which is an indication that some wood consumers expect further reductions of residual chip supply and are preparing for increased reliance on roundwood fiber in 2008.
In the US South, softwood chip prices were higher in the 4Q as supply dwindled with the lower lumber production. In addition to tighter supply, transportation costs have increased with higher diesel prices and longer transportation distances. Availability of pulpwood has been helped by lower demand for small logs by the OSB and lumber sectors the past six months. Prices for both pine and hardwood pulplogs have been declining in the South and are currently among the lowest of all regions in North America.
The North American Wood Fiber Review, established in 1982 and utilized by most of the major forest companies in the US and Canada, tracks delivered wood fiber costs in the 17 key markets in North America.
Contact Information
Wood Resources International
Hakan Ekstrom
Seattle, USA
info@wri-ltd.com
www.woodprices.com
###
The average softwood residual chip price was about $95/odmt (oven-dry metric ton) last quarter, which was $23/odmt more than in the US South, according to the wood market report the North American Wood Fiber Review.
Prices in the western states have fallen almost 20% since their peak in the 1Q/07. Despite the substantial decline, wood chip costs are still almost 20 dollars higher than they were two years ago. With the tight wood fiber market and with many sawmills struggling to keep operating in a lousy lumber market, it is not likely that residual chip prices will decline any further in the near-term, but rather that they will start to move up again.
With the declining supply of residual chips from sawmills, pulpmills have had no other option than to use chips manufactured from roundwood – a more expensive alternative. Despite the increased demand for pulplogs in the northwest, costs have actually declined by over 20% since a year ago as the supply situation has improved. Log costs are currently the lowest they have been in over two years. However, for several recent timber sales, pulplog prices have been higher than in the 4Q, which is an indication that some wood consumers expect further reductions of residual chip supply and are preparing for increased reliance on roundwood fiber in 2008.
In the US South, softwood chip prices were higher in the 4Q as supply dwindled with the lower lumber production. In addition to tighter supply, transportation costs have increased with higher diesel prices and longer transportation distances. Availability of pulpwood has been helped by lower demand for small logs by the OSB and lumber sectors the past six months. Prices for both pine and hardwood pulplogs have been declining in the South and are currently among the lowest of all regions in North America.
The North American Wood Fiber Review, established in 1982 and utilized by most of the major forest companies in the US and Canada, tracks delivered wood fiber costs in the 17 key markets in North America.
Contact Information
Wood Resources International
Hakan Ekstrom
Seattle, USA
info@wri-ltd.com
www.woodprices.com
###
Contact
Wood Resources International LLC
Hakan Ekstrom
425 402 8809
www.woodprices.com
Hakan Ekstrom
425 402 8809
www.woodprices.com
Contact
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