Market Update: Global Timber and Wood Products

SEATTLE (Scrap Monster): The Wood Resources Quarterly (WRQ) reported that hardwood chip exports from Latin America surged higher by 15% in the first quarter of 2019. The tightness in supply of hardwood fiber in the Pacific Rim lifted the prices of Latin American hardwood chips during the initial six-month period in 2019. Meantime, the projected decline in Chinese chip consumption is likely to stall the rally in hardwood chip prices.

The export prices for hardwood chips shipped from Chile and Uruguay were up significantly by nearly 10% each in Q1 this year. This is upon comparison with the prior quarter. The prices of chip export from Brazil were up by 6%. However, the export prices from Brazil and Chile remained below their 10-year averages.

According to WRQ, the hardwood chip prices have reached a peak during Q2 2019, but could potentially decline during the second half of the year. Over the long-term, the prices for hardwood fiber may witness sharp recovery owing to anticipated tightening of supply in the Pacific Rim. The exports from Chile and Uruguay may see notable decline in the coming years, the report said.

The wood chips trade in the Pacific Rim held steady over the quarter. The drop in imports to China was more or less balanced by increased imports to Japan. All major suppliers to Pacific Rim reported drop in shipments, except South Africa and Thailand whose exports to the region surged higher by 47% and 44% respectively.