Price discrepancy between softwood and hardwood chip widened in 2014

VANCOUVER (Scrap Monster): The price discrepancy between overseas traded hardwood and softwood chips was at its greatest in February 2015 when compared to the prior twelve months, according to the FOEX Chip Price Indexes.

Prices for wood chips traded overseas have trended downward for much of the period since 2011 when they reached their five-year highs. In February 2015, the FOEX softwood chip price index (PIX-SCG) was 14.8 percent below its peak, while the hardwood chip price index (PIX-HCG) was 9.1 percent below its five-year high.

In just six months, the PIX-SCG index has fallen from $185.73 per oven-dry metric ton (odmt) to $169.31/odmt, a decline of almost nine percent, partly because of lower import prices by some supplying countries to Japan. 

The PIX-HCG index has turned around since late last year and reached $183.93/odmt in February this year, the highest level in seven months. Some of the recent increases were the results of higher import prices in Portugal and higher volumes of lower-cost chips to China.

The price discrepancy between softwood and hardwood chip prices has widened the past year and was almost 15 Euros per odmt in February, 2015. However, the current price premium for hardwood chips is close to the average premium over the past five years. 

FOEX in cooperation with Wood Resources International (WRI) has launched two wood chip price indices, the Softwood Chip Global (SCG) and Hardwood Chip Global (HCG), both part of the PIX index family of FOEX. The Indices represent prices (CIF) for wood chips that are traded globally overseas for the manufacturing of wood pulp and wood-based panels. The Indices are reported monthly the third Tuesday of the month on the FOEX web site (www.foex.fi).