Hardwood & Softwood Pulpwood Price Indices at Lowest Level in 10 Years

Seattle, WA, April 7, 2016— Pulpwood costs have fallen substantially worldwide with the softwood and hardwood pulpwood price indices in the 4Q 2015 being at their lowest levels in over ten years, reports the Wood Resource Quarterly.

Wood cost is the factor that often determines the competitiveness of a pulp manufacturing plant or region, because it is the largest cost component when producing wood pulp. During the past few years, this cost has varied between 45% and 70% of the total cash cost, depending on product grade and the costs of other components such as chemicals, energy and labor.

Hardwood fiber prices continued to fall in most of the major pulp-producing countries in the world in the 4Q 2015. The biggest declines were seen in Brazil, Chile, Russia, France, Germany and Indonesia. In most regions, the price adjustments occurred in both in the local currencies and in U.S. dollar terms. The hardwood price index (HFPI) fell over 2% from the 3Q 2015 to a level that was almost 10% lower than in the 4Q 2014.

With the exception of the U.S. South and New Zealand, softwood fiber prices were also down throughout the world in the 4Q 2015. The declines ranged between 2% to 10% from the previous quarter. The softwood price index (SFPI) was U.S. $88.46/odmt, a reduction of 1.4% from the previous quarter and 7.5% lower than the same quarter in 2014. Both the SFPI and HFPI are currently at the lowest levels in over ten years.