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Blog

WRI Market Insights: 2Q22 Global Forest Markets & Price Performance

September 20, 2022
Author: Håkan Ekström

Global Timber Markets

A halt in Russian log exports and reduced wood demand in China contributed to a 20% decline in international softwood log trade in 1H22.

Sawlog prices increased worldwide in 2Q22, except for Oceania and Northern Europe. The increase extends the upward price trend that started in early 2020. As a result, the Global Sawlog Price Index (GSPI), representing 20 regions worldwide, has increased 34% in two years.

 

Global Wood Fiber Markets

Tight wood fiber supply, low pulp inventories, and record high market pulp prices have pushed the costs for pulplogs and wood chips up over the past year.

The global Hardwood Fiber Price Index (HFPI) jumped 5.3% quarter-over-quarter (QoQ) in 2Q22 and was 13% higher than a year ago, while the global Softwood Fiber Price Index (SFPI) has gone up relatively less (+7%) since 2Q21.

 

Global Pulp Markets

Prices for all the primary pulp grades reached new highs in 2Q22. The substantial increases in pulp prices paired with only modest increases in wood fiber costs have resulted in record gross margins for pulp companies worldwide.

Global trade of market pulp fell slightly during the first half of 2022, driven by lower demand in China, Germany, and Italy. The United States stood out as the only market with substantial importation expansion mostly because of continued strong demand for a variety of paper products.

 

Global Lumber Markets

Global trade of softwood lumber fell about 10% in the first half of 2022. Most of the decline was driven by lower lumber demand in China, the US, and Germany.

Lumber prices in Canada and the US fell by about 50% from March to July 2022 but were still close to their five-year averages. The international boycott of Russian forest products created much uncertainty in the European lumber market, and lumber prices softened in early summer.

Lumber imports to China fell 44% during 2020-21, and shipments are on pace to reach their lowest levels in ten years in 2022. Sawmills worldwide can look back on a few years with historically high profits due to record-high lumber prices and limited increases in wood raw-material costs. According to the Wood Resource Quarterly, current profit levels are the highest in at least 25 years.

 

Global Biomass Markets

Russia's war in Ukraine has shaken up the European pellet market. Pre-war shipments from Belarus, Russia, and Ukraine totaled about 3.5 million tons in 2021, about 30% of total imports to the continent.

However, in 2H22, this trade is likely to come to a halt. The tumultuous energy market in Europe brought wood pellet prices in the second and third quarters to extremely high levels never seen before.

Are you interested in worldwide wood products market information? The Wood Resource Quarterly (WRQ) is a 70-page report established in 1988 with subscribers in over 30 countries. The publication tracks prices for sawlog, pulpwood, lumber & pellets and reports on trade and wood market developments in most key regions worldwide. For more insights on the latest international forest product market trends, please go to http://www.WoodPrices.com.

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