Forisk Wood Fiber Review: Impacts on Weather and Trucking
Moist soil from South Carolina to Texas affected harvesting operations and pushed up southern pulpwood prices in the third quarter.
Moist soil from South Carolina to Texas affected harvesting operations and pushed up southern pulpwood prices in the third quarter. Hardwoods, often growing in damp (water-borne) areas, suffered the greatest impact as loggers struggled to maintain production. Southern hardwood roundwood prices in the Forisk third quarter 2021 wood fiber report increased 7-8% for the quarter, up 12-14% year-on-year (Figure 1). The limited trucking capacity only added to the misery. “Factories face the challenge of keeping adequate supplies on hand due to the trucking chaos,” said Tim Gammell, editor-in-chief of FWFR. Amid a summer spike in COVID-19 cases, operations in the south have faced challenges on multiple fronts.
Outside the southern United States, pulp-grade wood fiber prices remain low across much of North America. Robust sawmill production in the first half of 2021 generated abundant residual chip volumes that depressed prices in the Pacific Northwest, Lake States, Northeast and Eastern Canada. Pacific Northwest chip prices have increased due to growing export demand for wood chips, but current prices remain near five-year lows across much of the region. In Western Canada, softwood chip prices are largely tied to market pulp prices for northern bleached softwood kraft (NBSK) pulp. Shawn Baker, vice president of research at Forisk, notes: “While pulp prices fell in the third quarter, they remain high. »Residual softwood chip prices in Western Canada are up 10% year over year despite an 8% decline this quarter.
The economics of the forest industry continue to drive decisions about harvesting rates and downtime. Changing chip flows and high prices remind us of how the economics of raw materials are influencing the pulp sector, where another market watcher points out how ‘you see a shift from plastic to paper’ as the markets end products for recyclable products encouraging innovation for fiber-based packaging. This decision is supported by the fact that the conversion costs are lower for OCC than they are for virgin fiber. “We also have an overabundance of mixed papers,” remarks the market observer. This is important because the costs of wood fiber represent more than half of the total cost of making pulp worldwide.
Recently, Forisk analyzed growth to drainage in the southern and northwestern Pacific. The average growth of pine to drainage for the South in 2020 was 1.31, indicating a general oversupply of timber in the region, reinforcing the continued growth in the capacity of sawmills using grade and hold. ‘a significant residual chip flow for years to come. the region. Looking ahead to 2025, Forisk’s analysis for the region has an estimated average growth of 1.04 (close to one). Meanwhile, 10 sawmills and 11 pellet mills go into operation in the South.
The above data is taken from the Forisk Wood Fiber Review, a quarterly publication that tracks major wood fiber markets in North America, and the Forisk Market Bulletin, which tracks forest industry investments.