Softwood Fiber Price Index Hits Highest Level in 5 Years

SEATTLE (Scrap Monster): The Wood Resources Quarterly (WRQ) report published yesterday states that wood fiber costs for softwood pulp manufacturers have gone higher during the past two years. Consequently, the Softwood Fiber Price Index (SFPI) touched the highest level since 2014 in Q1 ’19.

The phenomenal rise in SFPI during late-2018 and early-2019 was mainly on account of higher wood fiber costs in the U.S. South, Russia and New Zealand. Going forward, the upward trend is expected to come to a halt during the summer. Furthermore, WRQ predicts downward trend to commence during the second half of 2019.

According to WRQ, the prices for pulplogs and wood chips in local currencies have surged higher in all of the 17 countries tracked by it. The only exception to this trend was Eastern Canada, where prices of both logs and chips witnessed downward pressure, due to oversupply of sawmill residues. Western North America, the Nordic countries, Russia and Indonesia recorded the biggest price increases over the past few years.

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Over the prior quarter, the SFPI edged higher by 0.5%, recording the third quarterly increase in a row. Russia, New Zealand and the U.S. South were the major contributors of the rise. Meantime, pulplog prices decline in Central Europe, on account of high supply of logs from insect-damaged trees.

The wood fiber costs rose almost 10% over the previous year at pulpmills along the U.S. Atlantic coast. The tight supply of wood fiber sent prices of wood chips and pulplogs in South Central and Southeastern states to the highest level in almost seven years during the initial quarter of the current year.