In the 2Q 2019, the European Sawlog Price Index (ESPI) fell to a nine-year low, reported Wood Resources International in its Wood Resource Quarterly. In Euro terms, average sawlog prices in Austria and Germany have fallen almost 20% over the past two years, thus improving the competitiveness of the two countries sawmilling industry. US softwood log shipments to China have fallen by $124 million in value since the trade war started May 2018.
Global Pulpwood Prices
Prices for softwood pulplogs and wood chips fell in practically all markets around the world in the 2Q/19 because of a combination of factors. These factors varied by region, but included reduced fiber demand, lower pulp prices, insect-damaged forests, and favorable logging conditions.
In the 2Q 2019, the Softwood Fiber Price Index (SFPI) fell by 1.5% from the previous quarter.
The Hardwood Fiber Price Index (HFPI) was down 0.5% quarter-over-quarter in the 2Q 2019. Hardwood pulplog prices fell the most in Indonesia, Germany, the US Northwest and Brazil, while prices increased in Russia, Japan and Australia.
Global Pulp Markets
Pulp mills around the world have had to tackle both weak demand and high inventories of pulp during the second quarter of 2019. The prices for NBSK and BHKP market pulp in July were down as much as 26% and 18% respectively, from October of last year.
Global Lumber Markets
With unchanged or slightly higher log costs and lower lumber prices in the 2Q, sawmills in North America saw their profit margins decline again after the short-lived improvements seen in the 1Q 2019.
Demand for lumber in China, the UK, Egypt and the Netherlands increased this year despite a slowdown in the global economy.
Lumber production in Canada from January to May 2019 was 9% lower than it was during the same period in 2018. Most of the decline were in British Columbia, where production was down 16.5% year-over-year.
China imported almost eight million m3 of softwood lumber in the 2Q, a new quarterly high. Russian deliveries reached five million m3, a 39% increase from the 1Q 2019.
The increased lumber demand in the MENA region continued in the 1Q 2019 when the two major markets, Egypt and Saudi Arabia, increased their importation by over 50% from the 1Q 2018.
Global Biomass Markets
In 2015, only 80,000 tons were exported to Japan, while an estimated 600,000 tons (24% of all exports) are expected to be shipped to this relatively new market in 2019.
Wood fiber costs for US pellet manufacturers fell in the 2Q, while Canadian pellet producers experienced higher costs due to reduced supply of sawmill residues.
Source: Wood Resources International