Global Sawlog Price Index Slumped to Hit Decade-Low Level

SEATTLE (Scrap Monster):  The sawlog prices recorded decline in major regions of the world during the second quarter this year. The fall in Q2 prices were mainly on account of rising U.S. dollar and waning log demand, said the most recent Wood Resources Quarterly (WRQ) report.

The Global Sawlog Price Index (GSPI) witnessed a decline by 4% from the prior quarter to hit its lowest level in almost a decade. The European Sawlog Price Index (ESPI) had nosedived by over 9% in 2019, the major contributor being Central Europe. During the initial six-month period of 2020, global softwood log trade has dipped by approximately 15%.

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Meantime, the Hardwood Fiber Price Index (HFPI) declined to its lowest level since 2004. The wood raw material costs for pulp manufacturers declined in Q2 2020. The wood chip imports China and Japan witnessed drastic decline, mainly due to substantial drop in pulp and paper consumption on account of Covid-19 pandemic.

The prices for hardwood market pulp remained essentially unchanged, whereas the softwood pulp prices inched higher marginally during the quarter.

The Chinese imports of softwood lumber surged higher by 42% quarter-on-quarter in Q2 2020. It must be noted that the import volumes by the country had hit four-year lows in the first quarter of the year. The gross margins for U.S. sawmills hit highest levels in over 15 years, triggered by record high lumber prices and slightly lower sawlog costs, WRQ noted.