North American Pulp Mills Recorded Mixed Wood Fiber Costs in Q1 ‘18

SEATTLE (Scrap Monster): The wood fiber price movements across North America exhibited mixed trends. The Western U.S. and Western Canada region reported substantial increase in prices, when compared with the prior quarter. Meantime, the softwood chip prices recorded notable decline. Meantime, the wood prices remained essentially unchanged in the U.S. South region.

According to the latest edition of North American Wood Fiber Review (NAWFR), the biggest increases were reported by British Columbia and the Western U.S. region, where prices of wood chips increased substantially by 12% and 15% respectively over Q4 ’17. The rise in prices of wood chips and pulplogs was mainly on account of constrained fiber supply, exceedingly low fiber inventories, reduced harvest levels and transportation issues.

The recent jump in lumber production volumes by the Eastern Canada region has resulted in robust supplies of residual chips. The demand for wood fiber stagnated during the quarter. This imbalance resulted in wood chip prices hitting their lowest level in over three decades. Moreover, the region’s pulp mills reported lowest softwood fiber costs in North America.

In spite of improved harvesting and better supply of sawmill residuals, the softwood fiber prices continued to remain stable in the U.S. South region. The demand for hardwood fiber remained strong. This, coupled with limited log supply, led to tight supply/demand balance for hardwood pulpwood. The prices of both logs and wood chips remained robust, due to constrained supply. For instance, the average prices in the South Central region touched the highest level in almost two years.

According to NAWFR, the softwood fiber pricing witnessed notable surge in Q1 2018 in the U.S. Northwest. The region reported low pulplog inventories and limited supplies of residual chips. The prices hit the highest level in six years.