Pulpmills in Eastern Canada have become more competitive with wood costs in the 1Q/16 reaching their lowest levels in 15 years

Wood costs for pulp mills in Eastern Canada have fallen dramatically the past four years, and the region has some of the lowest wood fiber costs in North America, according to the North American Wood Fiber Review. In 2012, pulp mills in Ontario and Quebec had some of the highest wood fiber costs on the continent

Seattle, USA. Softwood fiber prices in Eastern Canada have been in steady decline for over four years, and in the 1Q/16 were at their lowest levels in almost 15 years. The shrinking pulp industry in Ontario and Quebec has become more competitive with fiber costs matching many other regions of North America in early 2016, as reported in the North American Wood Fiber Review (NAWFR). In US dollar terms, softwood chips and pulplogs costs were down 37% and 27%, respectively in the 1Q/16 as compared to the 1Q/12.

Although much of the decline can be contributed to a stronger  US dollar, wood chip prices have also fallen substantially in Canadian dollar terms. Softwood chip prices in Canadian dollars were 16% below 2012 levels, and they are actually at their lowest levels since NAWFR started tracking wood fiber prices in Eastern Canada in 1988.

Chip prices in Quebec and Eastern Ontario are currently on par with prices in Western Canada and the US South, and they are substantially lower than in the US Northwest, the Lake States and the US Northeast.  This has been quite a remarkable turn-around from four years ago when the region’s pulp mills had some of the highest wood fiber costs in North America.    

Pulpwood prices (in Canadian dollar terms) in the Maritime Provinces fell in the 1Q/16 for the second consecutive quarter, according to the NAWFR (www.woodprices.com). The primary reasons for the recent price declines were full fiber inventories at the region’s pulp mills, and good access to the forests which resulted in a healthy flow of logs to the manufacturing plants. The collapse of the softwood log market in neighboring Maine has also had an impact on fiber prices in Eastern Canada over the past six months.

The hardwood pulplog price eased modestly in early 2016 due to healthy fiber inventories. Despite the fact that there has been a plentiful supply of logs over the past winter, hardwood log prices have not come down as much as have softwood logs, and are still near their highest levels in 20 years (in Canadian dollar terms).

The North American Wood Fiber Review has tracked wood fiber markets in the US and Canada for over 25 years and it is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America. The 32-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, lumber, wood pellets and wood chips. 

Wood Resources International LLC

Hakan Ekstrom

info@woodprices.com

www.woodprices.com

Wood Resources International LLC (WRI), an internationally recognized forest industry-consulting firm established in 1987, publishes two quarterly timber price reports and have subscribers in over 30 countries. The Wood Resource Quarterly, established in 1988, is a 52-page market report and includes sawlog prices, pulpwood and wood chip price and market commentary to developments in global timber, biomass and forest industry. The other report, the North Americam Wood Fiber Review, tracks prices of sawlogs, pulpwood, wood chips and biomass in most regions of Canada and the US. 

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WRI publishes the market report the North American Wood Fiber Review. The 32-page report, established in 1982 has readers in a large number of forest and energy companies in North America and Europe. The publication tracks prices of sawlog, pulpwood, wood chip and biomass in 15 key markets of the US and Canada. The report also covers exportation of forest products to Asia and Europe and the latest developments on the continent related to supply and demand of forest products.
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Prices for wood chips and pulp logs in Eastern Canada down 30% in four years. The pulp mills in the region now have some of the lowest wood costs in North America
Hakan Ekstrom