world news - 13.07.2009
Wood costs for pulpmills in Sweden and Finland have fallen over 30 % the past year
Pulpwood prices fell substantially in practically all markets in
Europe in the 1Q/09. The biggest declines occurred in Sweden, Finland, France and
Germany, where softwood and hardwood prices were down 11-18 % from the previous
quarter. Pulpwood prices have fallen faster in Europe (in US dollar terms) than they have
globally, according to WRQ.
The Finnish forest industry has been hard hit with many sawmills and pulpmills closing
temporarily or permanently as a result of the combination of two factors: weak markets
for forest products and high costs for wood raw-material. Even though pulplog and
sawlog prices have fallen by about 30% in US dollar terms (and a modest 10% in Euro
terms) the past 12 months, wood costs for the Finnish industry continues to be among the
highest in the world, and maybe more importantly, higher than for its neighbor and major
competitor in the west — Sweden. As a result of the lower prices for logs, the Finnish
Forest Research Institute reported that log purchases from private landowners were down
almost 70% the first six months this year as compared to the same period in 2008.
Pulpwood prices in Sweden have also fallen and they are currently down to the same
level as three years ago. Despite a price decline of 33% the past year, pulpmills in
Sweden still have some of the highest wood fiber costs in the world, according to the
Wood Resource Quarterly. Currently, only Eastern Canada, Norway and Finland have
higher softwood pulpwood prices.
An interesting development is under way in Sweden where a growing volume of smalldiameter
logs that typically would go to pulp mills are being sold to energy plants. With
the demand and prices for pulpwood in decline and the usage of “energy wood” steadily
expanding, competition for smaller logs has increased. One forest landowner association
reported that approximately five percent of its “pulpwood” harvest will be sold to energy
plants.
Recently, pulp companies in Sweden have introduced premiums of up to 10% for
pulpwood deliveries in the coming months. This has mainly come as the result of reduced
supply of sawmill residuals, increased competition for wood from the biomass industry
and a reduction of pulpwood inventories. There are now signs that pulpwood prices have
bottomed out and that they will increase in the coming months.
See also:
- — Amazon deforestation at lowest level
- — Russian Timber Backlog at Finnish Border
- — Furniture industry 'alive and well'
- — Crisis and recovery in the forest industry
- — Timber body challenged on climate claims
