menu-bgimg

What we can offer you

We provide detailed transactional data, cost benchmarks and in-depth analytics for participants in the wood raw materials supply chain.
  • Pricing Data
  • Benchmarks
  • Product Forecasting
  • Advisory Services
  • Analytics
Learn More

SilvaStat360 Platform

  • Price Benchmarks
  • Madison’s Lumber Reporter
  • The Beck Group’s Sawmill TQ
  • Timber Supply Analysis 
  • Global Economic Data

Explore Forest2Market's Interactive Business Intelligence Platform

Learn More

Industries

From biomass suppliers in the Baltics to pulp producers in Brazil and TIMOs in the United States, Forest2Market provides products and services for suppliers, producers and other stakeholders in the global forest products industry.

Learn More
x
 
Blog

São Paulo Eucalyptus Market: From Water to Wine

June 13, 2019
Author: Marcelo Schmid

The eucalyptus market in Brazil’s state of São Paulo is an excellent example of how the forest market—which is based on and driven by long-term investment—is dynamic and can change very quickly. According to data from the Brazilian Tree Industry (IBÁ), São Paulo ranks second among the main eucalyptus-producing states with 2.3 million planted acres; Minas Gerais is the leading producer with 3.4 million acres.

Main eucalyptus-producing states (2016)

SaoPaulo_1

Source: IBÁ

 

This high concentration of eucalyptus plantations has been driven by the presence of large players in the pulp segment, including Suzano, International Paper and Bracell, as well as the wood panels segment, including Duratex and Eucatex. While eucalyptus prices in São Paulo were relatively stagnant over the last few years amid a market slowdown, the increase in consumption—some of which is being driven by other segments—has created a more optimistic, demand driven climate for the forest market in the state.

  • Bracell (the new brand of Lwarcel Celulose in Lençóis Paulista) has announced an expansion plan named "Star Project.” This expansion will increase the company’s pulp mill production capacity in São Paulo from 250,000 tons per year to 1.25 million tons per year, with completion scheduled for 2021.
  • Suzano, after its purchase of Fibria, became a global leader in eucalyptus production with a total capacity of 11 million tons of pulp per year and owner of three factories in São Paulo (Suzano, Limeira and Jacareí). As the company evaluates additional investment in new facilities and the expansion of existing units, São Paulo and Mato Grosso do Sul are likely locations for siting this growth.

Other regional companies in the pulp industry, while they have not announced expansion projects, are reviewing their forestry supply strategy for the coming years in what is now a much more competitive market. In addition to the pulp segment, demand for eucalyptus biomass has also increased in recent years, which is being driven by food production segments and other mill facilities that have switched to biomass due to the high price of natural gas.

The increased consumption of eucalyptus in São Paulo has naturally led to higher prices for forest raw materials in the state. Forest2Market do Brasil has monitored the eucalyptus market in São Paulo since 2016 through the collection of real market, transactional data. As evident in the chart below, eucalyptus stumpage prices per cubic meter (m³) have increased from R$37.05 in December 2016 to R$55.38 in March 2019, a 49% jump in just over two years.

 

Trend in eucalyptus log prices in São Paulo

SaoPaulo_2 

Source: Forest2Market do Brasil

 

With current demand and additional projects on the way, there is a strong likelihood that wood fiber prices in São Paulo are set to continue to increase in both the near and long terms. While there is currently a surplus of available fiber in São Paulo, the expansion of Bracell alone will add significant demand to the supply chain, further intensifying the regional competition for wood raw materials and pushing prices higher.

site selection studies

Back to Blog

You May Also be Interested In

November 14, 2019
Surplus of Beetle-Damaged Timber Impacting European Forest Industry
Over the last several decades, a combination of devastating wildfires and pest infestations have destroyed millions...
Continue Reading
November 13, 2019
3 Reasons Forests are Invaluable to Both Humanity and the Environment
Forest2Market recently hosted two students from the British International School in Charlotte, NC in support of the...
Continue Reading
October 04, 2019
Brazil’s Pine Export Market Braces for (Negative) Impact
Forest management is a long-term activity and investment; it takes years of patience to reap the rewards of the...
Continue Reading