Seattle, USA - Strong pulp markets and record high prices for both softwood and hardwood
market pulp resulted in upward price pressures on wood fiber throughout the world in the
1Q/18, reports the Wood Resource Quarterly (WRQ). The Global Softwood Fiber Price
Index (SFPI) was up by 3.4% from the 4Q/17 to the 1Q/18, the second highest quarter-toquarter
increase in seven years. Softwood prices rose in all 20 regions covered by the WRQ
with the exception of Eastern Canada, where chip prices fell 16% q-o-q (in US dollars).
Pulp prices reached record highs in early 2018 following a 16-month period of increasing
prices. Wood fiber costs, the largest cost component when manufacturing pulp, have gone
up much more slowly than pulp prices during the past year, resulting in substantial
increases in earnings for the international pulp industry.
Hardwood pulplogs saw a more modest price increase than softwood pulplogs, with prices
rising the most in Russia, Spain and Finland. The Global Hardwood Fiber Price Index
(HFPI) reached a three-year high in the 1Q/18 and was 8.0% higher than in the 1Q/17.
Profit margins continued to improve for pulp companies in the 1Q/18 as pulp prices increased faster
than the wood fiber costs. Northern Bleached Softwood Kraft Pulp (NBSK) pulp prices jumped in
the 1Q/18 to new record highs, while the crucial wood costs were only slightly higher. This resulted
in a record low wood fiber cost percentage of 22.5% of the pulp price. With the wood fiber costs
accounting for 40-60% of the total manufacturing costs, market producers can expect healthy
returns in 2018.
The wood costs share for Southern Bleached Softwood Kraft Pulp (SBSK) price was also down,
dropping to 16.2% . This is the lowest it has been in 25 years, and is mainly due to sharply
increasing pulp prices. The SBSK pulp is produced in the US South, Iberia, Latin America and
For Eucalyptus Bleached Kraft Pulp (EBK), the wood fiber share fell to 16.1% in the 1Q/18, the
lowest cost share since 2003, according to the WRQ. As with the other major pulp grades, it was
mostly the result of higher pulp prices rather any substantial changes in wood costs.
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