Pulp production increase drives up wood prices

Wood costs for the global pulp industry have risen 17 per cent in the past two years, according to market reports.

Global market pulp production increased by seven per cent in 2010, which, in turn, boosted demand for wood raw material and pushed up prices for wood chips and pulp logs in most regions of the world, the Wood Resource Quarterly reported.

The second half of 2010 saw higher-than-anticipated global pulp production, with markets in a stronger position than they had been in the first six months of the year.

The total production of chemical market pulp reached an estimated 45 million tonnes last year - around seven per cent more than the amount produced in 2009.

The Softwood Wood Fiber Price Index (SFPI) has reached US$103.60/odmt - the highest level since the beginning of the financial crisis - and is now 16 per cent above the first quarter of 2009 price.

Meanwhile, the Hardwood Wood Fiber Price Index (HFPI) has risen faster than the SFPI and in the last quarter of 2010 was US$108.28 - almost 18 per cent higher than in the first quarter of 2009. The HFPI has only been higher twice since it was established more than 20 years ago.