Seattle, UWA - Wood fiber costs fell in most regions of North America during the first six
months of 2019 with the biggest declines being seen in Western Canada and the US
Northwest. Prices for pulplogs and wood chips in the US South bucked the trend, with
softwood fiber moving up to it’s highest levels in three years and hardwood fiber prices
hitting an all-time-high.
Wet weather conditions in the US South continued to restrain harvesting in the 2Q/19.
However, with pulpmill maintenance outages and falling pulp and paper product prices,
demand for wood fiber softened during the quarter. The result was an easing in softwood
pulplog prices from the 1Q/19. Even though hardwood pulplog pricing remained flat, the
region was slowly reducing its reliance on long-distance haul supply sources, as well as
finishing harvesting operations in timber stands that were purchased when rates were
higher than in the 2Q/19.
With sawmills in the US Northwest running at only slightly reduced production levels in
the 2Q/19 due to small adjustments of US lumber prices, residual chip supply remained
stable. Residual chip prices dropped mainly as fiber demand diminished due to seasonal
pulpmill maintenance outages. The reduced fiber consumption resulted in most pulpmills
being able to build their fiber inventories going into the second half of the year. According
to the North American Wood Fiber Review, most sub-regions of the Northwest saw
pulplog and residue prices decline in the 2Q/19 to reach their lowest levels since early 2018.
US Lake States
As winter weather of snow and freezing rain continued longer into the 2Q/19 than usual,
more pressure was placed on fiber buyers and their inventories. Some pulpmills reported
having adequate volumes, while a few others struggled with insufficient wood supply,
especially of hardwood fiber. The result was that the price for hardwood pulplogs increased
nearly 4% between the 2Q/18 and the 2Q/19, reaching its highest price seen since early
2017. The pricing for softwood pulplogs remained unchanged from the 1Q/19.
As is customary in the US Northeast, the arrival of spring meant that logging contractors
had to contend with muddy harvesting conditions, which prevented much fiber moving
from the woods to the logging yards. Softwood fiber prices remained stable during the
2Q/19. In contrast, hardwood pulplogs edged upward to levels not seen since the 2Q/16.
This price increase was due to the higher cost of reloading the pulplogs stored at the satellite
In British Columbia, the average price for pulplogs fell slightly to C$51/m3 in the 2Q/19.
In the Interior of the province, pulplog prices were steady because pulpmills made a push
early in the year to build up their inventories before the spring breakup. There was also
slower production at several pulpmills due to lower NBSK prices. In the Southwest Coastal
Region, there were no significant supply or price fluctuations.
Of the three regions in Western Canada, residual chip prices in the Interior of BC saw the
steepest decline in the 2Q/19, six percent q-o-q, as a result of the NBSK pulp prices having
slipped (see more in the latest NAWFR). Chip prices in Coastal BC fell just over two
percent, and they were down four percent in Alberta.
In Eastern Ontario and Quebec, weather-dependent harvesting challenges during the winter
months due to the weather resulted in mediocre hardwood log inventory levels in the 2Q/19.
This caused the prices for hardwood pulplogs to edge upward to levels last seen in early
2016. There was no movement in the price for residual chips in the 2Q/19. However, the
opening of two new pellet mills during the second half of the year is expected to upset the
current supply and demand balance and could therefore change chip prices late in 2019 or
In the Maritime provinces, mill and pulpmill inventories remained stable during the spring
thaw. Sawmills were not running hard, so the demand for sawlogs was tepid. The price for
softwood pulplogs remained flat in the 2Q/19, while the price for hardwood pulplogs rose
by two dollars per odmt. This price increase was primarily due to higher handling costs of
moving the pulplogs from auxiliary wood yards, as well as in some cases temporary
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