March 2012
Over The Wire Tissue Edition
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Fiber Prices Down in Most Global Regions

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Sawlog prices in the fourth quarter of 2011 were down both in U.S. dollar terms and in local currencies in most of the 20 regions covered by the Wood Resource Quarterly (WRQ) Seattle, Wash., USA, compared with the previous quarter. The Global Sawlog Price Index (GSPI) declined for the second straight quarter to $87.28/cubic meter in the fourth quarter. The Index was down 6% from the all-time high in the second quarter of 2011. In U.S. dollar terms, the biggest declines from the third quarter 2011 occurred in the Nordic countries and Oceania.

In the fourth quarter, the U.S dollar continued to strengthen against the currencies of all of the countries covered by the WRQ except Japan. This development, together with a downward price pressure on pulp log and wood chips in local currencies because of weakening pulp demand, resulted in a decline of both of the global wood fiber indices.

The Softwood Wood Fiber Price Index fell for the second straight quarter to $105.30/ovendry metric ton (odmt) in the fourth quarter of 2011. This was down 3.3% from the previous quarter, but 1.6% higher than the fourth quarter of 2010. The biggest price declines from the third quarter took place in Western Canada, Brazil, Spain, Germany, and Finland.

The Hardwood Wood Fiber Price Index fell 3.6% from the third quarter to the fourth quarter of 2011, when it averaged $113.69/odmt. Despite this drop, this was still 5.0% higher than in the fourth quarter of 2010 and the third highest level ever recorded. The biggest price reductions from the third to the fourth quarter occurred in Spain, Finland, Brazil, and Chile.

Production of market pulp on a worldwide basis was up 4% from October to November, and operating rates reached 91% for 20 of the world’s largest producing countries. For the first 11 months of 2011, world production was 3.7 % higher than the same period in 2010, with production going up the most in Latin America and W. Europe. Prices for bleached hardwood kraft pulp (BHKP) fell more than those for northern bleached softwood kraft (NBSK) pulp last fall, but they seemed to reach a bottom in early January and have been slowly climbing during late January and early February.

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