Global pulpwood market prices changed substantially since 2023, with hardwood fibre prices surpassing softwood

The global wood fibre market has changed substantially over the past three years.

Despite a worldwide decline in hardwood pulp prices in 2023, the supply of hardwood pulp logs tightened primarily because of Russia’s invasion of Ukraine. This geopolitical event triggered a significant increase in hardwood fibre prices, which have outpaced the rise in softwood fibre prices and led to a 44% surge in the Global Hardwood Fiber Price Index (HFPI) since late 2020.

According to Wood Resources International, this upward trajectory continued into Q3 2023, during which the HFPI reached its highest level in over 10 years. The most significant price increases of hardwood pulpwood occurred in Brazil, Germany, France, Finland, Sweden, and eastern Canada.

However, not all regions experienced this surge. Notable price declines in the past year occurred in the US, Spain, and Australian domestic markets.

Image: Wood Resources International

Furthermore, China, a significant importer of wood fibre, saw import prices fall by over 20%. In contrast to the hardwood market, the recent dynamics for softwood wood fibre have been different.

Lower pulp production in North America and Europe and declining prices for softwood pulp globally have reduced demand for wood fibre. This decrease has put downward price pressure on softwood wood chips and pulp logs.

In Q3 2023, the Softwood Fiber Price Index (SFPI) reported a decline of 4.5% from Q2 of the same year.

This fall was the most significant quarter-to-quarter decline since 2015. Despite this quarterly decline, the index has seen an overall increase of 4.3% since Q3 2022.

Image: Wood Resources International

Regions such as the northwest US, south US, western Canada, Austria, France, Spain, Chile, and Australia have experienced the most substantial price declines in US dollar terms. The recent drop in the SFPI occurred following an all-time high in Q2 2023.

Pulp mills in the US and Latin America currently have the lowest cost wood fibre worldwide, while producers in the Nordic countries have the highest costs.

Significant changes in the ranking for softwood fibre costs during the past two years include the US South, which moved from sixth to second, and Spain from 12th to eighth.

During the same period, Brazil’s ranking fell from first to fifth, and Germany’s from fifth to 10th. The most significant ranking improvements for hardwood fibre occurred in the northwest US, Spain, and Australia, whereas pulp mills in Brazil, France, and Germany have lost competitiveness since 2021.

Source: Wood Resources International