Volatility defined much of the global marketplaces in the lumber, timber, and related industries as 2022 wrapped up. Take a look below to see where the numbers landed – and what to expect for 2023.
Global Timber Markets
Wood raw-material costs for sawmills in North America and Europe eased in the 3rd quarter 2022 as demand and prices for lumber fell.
The Global Sawlog Price Index (GSPI) fell 5% from its all-time high in the previous quarter. The decline follows a two-year increasing streak when the index had only one occasion when it declined quarter-over-quarter.
Global Wood Fiber Markets
Prices for pulplogs and wood chips have increased in practically all markets worldwide during the 3rd quarter 2022. As a result, the Hardwood Fiber Price Index (HFPI) has moved upward for over two years to reach a level 26% higher than its 15-year low in the 2nd quarter 2020.
Global softwood fiber prices have also risen over the past few years, with the Softwood Fiber Price Index (SFPI) increasing for nine consecutive quarters. In the 3rd quarter 2022, the SFPI hit the highest level since early 2021.
Global Pulp Markets
Market pulp prices continued up in the 3rd quarter last year but started to level off early into the 4th quarter. Softwood and hardwood chemical pulp prices were substantially higher in quarter 3 compared to 2021, with the most substantial increases occurring in China. NBSK was up 18% over the past year, and HBSK has risen 36%.
Global Lumber Markets
After three months of incremental price decreases, the North American lumber market continues to struggle against inflationary pressures and high-interest rates. All these factors are taking a noticeable toll on the housing market.
Forest2Market's Southern yellow pine lumber price composite for November fell to almost half of what it was in November 2021. This is the lowest amount since early 2020.
Lumber production has declined in three of the four major regions of North America during the first eight months of 2022. Only the US South increased production (+6.9% year-over-year), while output in BC, Eastern Canada, and US Northwest fell by 12.5%, 6.6%, and 6.9%, respectively.
Russia's invasion of Ukraine and the boycott by western countries in trading with Russia have also created a serious impact. The country's exports have fallen from an all-time high of 31 million m3 in 2019 to an estimated 19 million m3 in 2022. Russia's share of global trade also declined from 22% to about 14%.
Global Biomass Markets
The wood pellet market in Europe remained turbulent during the fall. Prices for industrial and residential pellets have vaulted to all-time highs.
In some markets, residential pellet prices in the third quarter 2022 were three times as high as they were during the same period in 2021.
WoodMarket Prices: Business Intelligence You Can Trust
This post comes from Wood Resource Quarterly (WRQ), a regular publication from ResourceWise's Wood Resources International.
WRQ is now available as an interactive online business intelligence platform, WoodMarket Prices (WMP). WMP tracks prices for sawlog, pulpwood, lumber and pellets and reports on trade and wood market developments in most key regions worldwide.
Users can quickly find specified trade and pricing information relevant to their business interests. This information will improve strategic decision-making and planning in a potentially volatile global marketplace.
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