2Q Results—Hardwood Fiber Delivered to Pulp and Paper Mills in the South

From the August 2010 Forest2Mill newsletter.

Hardwood fiber purchases increased by more than 9 percent in the second quarter across the South as mills built inventory. The weighted average delivered price for hardwood fiber fell $2.34/ton. 
“Inventories have decreased steeply since 3Q2009, and that continued through the first quarter,” said Stuber. “So even though hardwood purchases were up 9 percent, this was primarily a move to build inventory after winter log shortages. At the same time, mill’s cut hardwood production. Frankly, it doesn’t look like production will increase anytime soon, since inventories have returned to year-ago levels. As a result, we expect prices will continue to fall.
“We may see more inventory builds in fall due to seasonality,” said Stuber. “We may even see mills build inventory above their usual fall levels over concern that wet weather could once again restrict supply. If this occurs, it will stymie the fall in prices."
Purchases of all classes of hardwood fiber increased during the quarter, with pulpwood up nearly 7 percent, primary chips up 9.5 percent and secondary chips up more than 20 percent. Prices ended the quarter near $41/ton; primary chips fell nearly $1/ton, but pulpwood prices accounted for the largest portion of price declines.

Additional Stories from the August 2010 Forest2Mill Newsletter:
Economic Outlook
Housing Market Update
Results from 2Q2010 Delivered Price Benchmark 
      Pine Fiber 
      Pine Sawtimber
Myth of Deforestation
AF&PA Sustainability Report

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