The Global Forest Industry in the 3Q/2015

Highlights from the 3Q/2015 full report:

Global sawlog prices fell and the GSPI Index has declined 14% in one year. The European Sawlog Price Index (ESPI) has dropped 24% in 18 months because of slower lumber markets and weaker currencies in in Europe. The two WRI wood fiber price indices for softwood and hardwood fiber (SFPI and HFPI) were down by 9.0% and 11.0%, respectively, from the same quarter in 2014.

Lumber production in North America has gone up for the past few years. The biggest production increase during the first eight months of 2015 occurred in Canada. North American pellet exports to Europe reached the second highest level on record. Shipments to Asia have fallen significantly. Also, quarterly prices for sawlogs, pulpwood, wood chips, pellets and lumber from around the world.

Global Timber Market
Sawlog prices have trended downward in most markets worldwide for the past five quarters, resulting in the Global Sawlog Price Index (GSPI) declining by over 14% in one year. In the 3Q/15, the GSPI was at its lowest level since the 2Q/09.
The European Sawlog Price Index (ESPI) has dropped 24% the past 18 months to US$94.10/m3 (€84.67/m3) in the 3Q/15. This decline is the result of slowing demand for lumber in some markets as well as weaker currencies throughout Europe.
Worldwide trade of softwood logs fell by over 12% during the first nine months this year as compared to the same period in 2014. Much of the decline can be tracked to declining imports to China, which have fallen 21% so far this year.

Global Pulpwood Prices
In the 3Q/15, the two WRI global wood fiber price indices for softwood and hardwood fiber (SFPI and HFPI) were down by 9.0% and 11.0%, respectively, from the same quarter in 2014, mostly due to the strengthening of the US dollar.
The SFPI has fallen for five consecutive quarters and reached a six-year low of US$89.64/odmt in the 3Q/15. The biggest price declines from the 2Q/15 occurred in Western Canada, Russia, Latin America and Oceania.
Hardwood fiber prices have followed the same downward trend as softwood fiber. The HFPI reached US$86.14/odmt in the 3Q/15, the lowest level since 2006. In the 3Q/15 hardwood fiber prices in Russia, Brazil, Chile and Australia fell the most.

Global Pulp Markets
Global production of market pulp continues to be higher this year than in 2014. During the first eight months of 2015, global supply of wood pulp reached 36.9 million tons, 3.5 percent higher than the same period last year.
Softwood pulp (NBSK) prices have continued to weaken during the fall, while prices for hardwood pulp (BHKP) have been surging upward for over a year.

Global Lumber Markets
Despite occasional gloomy reports from the sawmilling industry around the world this year, softwood lumber trade increased during the first nine months of 2015 as compared to the same period in 2014.
Lumber production in North America has been trending upwards ever since the Global Financial Crisis in 2008 when the lumber market crashed. The biggest production increase during the first eight months of 2015 occurred in Canada. Lumber prices in the US started to recover in October and November after a 3 1/2 year low in the month of September.
Finland and Sweden have exported more lumber this year than in 2014. Export prices, in US dollar terms, have fallen dramatically over the past year, making the Nordic lumber producers more competitive in markets trading lumber in US dollars.
Lumber import prices to China have fallen during much of 2014 and 2015. In October, average import prices were 25% lower than their peak in September last year. The biggest price declines have been for lumber imported from Europe.
Softwood lumber exports from Russia fell slightly in the 3Q/15 as compared to the previous quarter, which had the highest quarterly lumber shipments ever recorded.

Global Biomass Markets
North American pellet exports to Europe were at their second highest level on record, reaching 1.37 million tons.
Pellet exports to Asia from British Columbia fell significantly in the first half of 2015.
Lower demand and relatively high production levels kept pellet prices at their lowest levels in three years in both Austria and Germany.

Global timber and wood market reporting is included in the 52-page quarterly publication Wood Resource Quarterly. The report, established in 1988 and with subscribers in over 30 countries, tracks sawlog, pulpwood, lumber and pellet prices, and market developments in most key regions around the world. To subscribe to the WRQ, please go to www.woodprices.com.

Contact Information
Wood Resources International LLC
Hakan Ekstrom
Seattle, USA

Source: Wood Resource Quarterly