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Pulp Prices: Have We Hit the 2013 High?

Picture of Suz-Anne Kinney Suz-Anne Kinney : May 31, 2013

Pulp and Paper

Where are pulp prices, and where are they headed?

According to the Forestweb North American Pulp Index, which is published by Industry Intelligence, pulp prices fell below the five-year trend line in November 2011 and remain there today.

How long will pulp prices remain below the trend?

The following chart shows the current market level in context of the last four years. While the market is considerably stronger than it was at the recession’s nadir in 2009, it is well below both 2010 and 2011 levels. In fact, 2013 so far is tracking almost exactly as 2012 did.

Will pulp prices crawl out of the dungeon in 2013?

The answer to both this question and the preceding one can be found in the next figure. If we normalize the Forestweb index by pegging the yearly high at 100 percent and all other prices as a percentage of that high, we can see that for each of the last three years, the market high for the year occurred in either May or June.

To date in 2013, it appears that we are at or near the market high for the year. Recent announcements by West Fraser, Domtar and Canfor that they will increase NBSK prices $20/tonne (to $950/tonne) by June 1 indicate that a little more room for upward movement may still be on the table for 2013. Whether or not some or all of this increase goes into effect, however, it is likely that we will have seen the market high for the year by the end of June. And if the high for the year does happen at the end of the second quarter, prices are unlikely to climb above the five-year trend line in 2013.

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Comments

william

06-03-2013

I am currently as of 06/2013 about to harvest timber on my place in Kemper County. Don’t know Squat about how to go about it. How do I know if i’m getting a fair price on my timber? How do I find out what Price it is going for at the mill? I got Pole Quality, Chip & Pulp mostly pine with some OAK hard wood. Thank’s folks.

Comments

Tom Busch

06-04-2013

William,

Get a good consulting forester to do a timber appraisal, at least. If they sell the timber as your agent and fiduciary, you’ll get the best price and have peace of mind.