Seattle, WA -- Pulp manufacturers in many countries have seen their wood fiber costs go
up during 2017, with the biggest increases in US dollar terms occurring in Western North
America, Europe, Russia and Australia, according to the Wood Resource Quarterly (WRQ).
The Global Softwood Fiber Price Index (SFPI) increased for the third consecutive quarter
to reach $89.08/odmt in the 4Q/17, 4.0% higher than in the same quarter in 2016.
Pulp manufacturers in many countries have seen their wood fiber costs go up during 2017.
In the 4Q/17, both the global softwood and hardwood fiber price indices reached their
highest levels in over a year, according to the Wood Resource Quarterly. However, market
pulp prices increased even faster, resulting in a period of increased earnings by the pulp
Hardwood fiber prices have also trended upwards over the past year, with the Global
Hardwood Fiber Price Index (HFPI) reaching its highest level in almost three years
during the 4Q/17. In US dollar terms, hardwood fiber prices have gone up the most in
Europe, Russia and Indonesia during 2017. The only region that has experienced a decline
in wood fiber costs has been the US South, where hardwood pulplog prices were 2.3 %
lower in the 4Q/17 than in the 4Q/16.
Wood fiber costs remain the single largest cost component in the manufacture of wood
pulp, ranging between 40-60% of the total cash costs, depending on region and pulp grade.
The wood fiber costs as a percentage of the price of Northern Bleached Softwood Kraft
market pulp (NBSK) have been on a downward trajectory over the past eight years.
The substantial increases in market pulp prices during the 4Q/17 and only small upward
price adjustments of pulpwood resulted in the wood fiber cost percentage reaching a record
low of 23.2% in the last quarter of 2017 (down from 36% in 2012). Since wood fiber costs
account for a majority of the pulp manufacturing costs, the low wood cost share has
improved profitability for market pulp manufacturers throughout the world during 2017.
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