Canadian mills have lower fiber costs than U.S.
North American wood fiber prices have trended downward for most of 2015 and 2016 with prices in the third quarter of 2016 being at their lowest levels in more than two years, according to the North American Wood Fiber Review (NAWFR).
Wood fiber costs for pulp mills in Canada and the U.S. have fallen over the past year as a result of higher availability of residual chips from the continent’s sawmills.The biggest price declines have been in the U.S. Northwest and Northeast regions where prices have fallen between 10-15 per cent from the 3Q/15 to the 3Q/16., but prices have also fallen quite dramatically throughout Canada.
In the US Northwest, where a majority of the fiber furnish is sawmills residuals, prices have fallen 11% in one year but are still higher than the 25-year average price. Current price levels for softwood chips in Washington and Oregon are the second highest in North America, behind the Lake States region. The lowest cost regions for chips are the US South, British Columbia, Alberta and Quebec.
About the Canadian wood fiber prices
Canadian wood fiber prices, in U.S. dollar terms, have come down substantially from their record highs in 2012. Pulp mills throughout Canada have become much more competitive over the past few years and have gone from having the highest wood fiber costs in North America five years ago to currently having the lowest costs on the continent.
In British Columbia, wood chip prices would most likely have fallen more than they have the past year had it not been for the commonly used formula linking chip prices to the NBSK pulp price, a price that has stayed fairly stable the past year.
The North American Wood Fiber Review has tracked wood fiber markets in the US and Canada for more than 20 years and it is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America.