Pine sawlog prices down in Brazil as the lumber export market is weakening
Pine sawlog prices fell over 4% in the 3Q in Brazilian Reals as a result of declining demand from sawmills exporting lumber to the US market. However, as the US dollar continued to weaken, average log prices were slightly higher in US dollar terms reaching a record-high of US$65/m3.
The weaker demand for sawlogs is expected to continue in the coming months with downward pressure on sawlog prices. In southern Brazil, where a majority of the pine plantations are located, there are some forest companies that are now selling sawlog-size wood to the pulpmills as they pay higher prices than sawmills.
Both pine and Eucalyptus pulplog prices did go up in the 3Q, reaching new record levels. The average pine pulpwood price was almost US$90/odmt and the Eucalyptus log price was up three dollars. Brazilian hardwood fiber costs (open market volumes) are currently close to the WRQ global average non-conifer price.
In the past few years there has been increased competition for smaller logs between the pulp, MDF, particle board and biomass sectors thus putting upward pressure on wood prices. These developments have been particularly accentuated in southern Brazil.
Chip exports from Chile up 34% in four years
Chile has for many years exported wood chips mainly to Japan and the country is currently the third biggest supplier of hardwood chips to Japan after Australia and South Africa. Until 2004, Chile exported radiata pine, native beech and plantation Eucalyptus, but in recent years all exports have been of Eucalyptus chips only.
There are two species of Eucalyptus exported from Chile, Eucalyptus Globulus and Eucalyptus Nitens. The former is denser and sold at a higher price than E. Nitens (typically 10-15% higher). In 2007, an estimated 3.7 million m3, or approximately 70% of all exports are expected to be E. Globulus chips, a smaller share than during the period 2001-2006 (see graph).
There are currently seven major companies exporting chips from Chile with Astex, Anchile and Comaco being the biggest.
Record high prices for pine logs in Chile
Although radiata pine harvests have gone up about 40% since 1998, the pulp, composite board and lumber sectors have expanded faster, thus putting pressure on raw-material costs. Increased competition for softwood logs have pushed prices upward for both sawlog and pulplogs the past year.
Pine sawlog prices reached a record-high in the 3Q and were over 50% higher than four years ago. Pine pulplog prices have also reached record levels and were about 2.5 times the pulpwood costs in 2003.
Eucalyptus pulplog prices have been relatively stable the past two years. Despite the recent price increases, Chilean pulpmills and sawmills still have some of the lowest wood costs in the world today. Some of the increase over the past four years has been due to the weakening US dollar, but costs have also gone up in Chilean Pesos. |
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