Pulp Mills in Latin America Had Lowest Wood Costs Globally in 2Q 2013
In Brazil, prices for both sawlogs and pulplogs have come down substantially in US dollar terms the past few years.
Nov. 20, 2013 - The wood costs for pulp and lumber manufacturers in the two largest
producing countries in Latin America — Brazil and Chile — have fallen during much of 2012
and 2013, and in the second quarter of 2013 at the lowest levels in over two years, according to the
Wood Resource Quarterly (WRQ). The two countries currently have
some of the lowest wood raw-material costs in the world, and since these costs account
for 55-65% of the production costs when manufacturing pulp and lumber, it makes the
industry quite competitive in the export market, WQ explained.
In Brazil, prices for both sawlogs and pulplogs have come down substantially in US
dollar terms the past few years. The average pine sawlog price is currently over 20%
below the record high levels reached in 2011. This sharp price decline is more a
reflection of a weakening Brazilian Real than any dramatic price changes in the local
currency. The current sawlog costs, which were about 30% below the global sawlog
index GSPI, makes Brazilian sawmills very competitive. Although Brazil is a minor
player in the global lumber export market, the country has expanded sales to the US,
which is by far the largest consumer of Brazilian softwood lumber, this year, with
shipments in the 3Q/13 reaching their highest levels in over two years.
Prices for pulpwood in Brazil have followed a similar trend to those of sawlogs, with
sharp declines in US dollar terms but only modest declines in the Brazilian Real the past
year. Current pulplog price levels have not been seen in almost five years, and the
Brazilian pulp industry has become much more competitive compared to a few years ago.
Prices for pine sawlogs in Chile have been surprisingly stable in 2012 and 2013 despite
higher log demand from sawmills the past year both because of a stronger domestic
market and increased exports. Chile is about the tenth largest exporter of softwood
lumber in the world and shipments to China, Japan and the US were all up the first half of
2013 as compared to the same period in 2012.
Pulplog prices in Chile have also fallen, with the 2Q/13 prices being about eight percent
lower than in the 2Q/12. The average cost for Eucalyptus fiber in Chile is currently the
lowest in all countries tracked by WRQ, making the country’s pulp mills some of the
world’s lowest cost producers of hardwood market pulp.
Global pulpwood and timber market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, established in 1988 and with subscribers in over 30 countries, tracks sawlog, pulpwood, lumber and pellet prices, trade and market developments in most key regions around the world. For further information, visit: www.woodprices.com.
SOURCE: Wood Resources International