The global forest industry in Q4/2017

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The Global Sawlog Price Index (GSPI) increased to US$76.34/m3 in the 4Q/17, up 1.0 percent from the 3Q/17. This was the fourth consecutive q-o-q rise, with the GSPI being up 9.8 percent in one year.

Sawlog prices have gone up universally in US dollar terms in 2017, with the biggest growth occurring in Eastern Europe, the Nordic countries and in Western North America.

Sawlog prices in Europe were generally lower in the 4Q/17 (in Euro terms) after having reached a two year peak in the 3Q/17. In the 4Q/17, the European Sawlog Price Index (ESPI) fell 1.2% from the previous quarter.

Global Pulpwood Prices

Pulp manufacturers in many countries have seen their wood costs go up during 2017, with the biggest increases in US dollar terms occurring in Western North America, Europe, Russia and Australia.

The Global Softwood Fiber Price Index (SFPI) increased for the third consecutive quarter in the 4Q/17, and was 4.0% higher than in the same quarter in 2016. Year-over-year, wood fiber prices have gone up the most in Western Canada, Sweden, Spain, Russia and Chile.

Hardwood fiber prices have also trended upward over the past year with the Global Hardwood Fiber Price Index (HFPI) reaching its highest level in almost three years during the 4Q/17.

Global Pulp Markets

Pulp production was up throughout the world in 2017 with the total production reaching just over 53 million tons, or 3.2% more than in 2016.

The biggest increase from 2016 was seen in Western Europe where output was up +5.1%. Prices for market pulp reached new record highs in early 2018 when softwood market pulp (NBSK) prices in Europe averaged over $1000 per ton.

Global Lumber Markets

Trade of softwood lumber reached an all-time-high in 2017 as demand for wood was strong in most key markets around the world. An estimated 126 million m3 of softwood lumber was shipped from forest- rich countries such as Canada, Russia, Sweden and Finland to markets with high consumption of lumber, including China, the US, the United Kingdom, Japan and Germany.

US softwood lumber production in 2017 reached the highest level seen in ten years, with the biggest increase in the southern states.

The strong market for lumber in the US led to record high lumber prices in both the US and Canada in late 2017 and early 2018.

Finnish softwood lumber production reached a ten-year high in 2017. The higher production was driven by expanding lumber exports, particularly to China.

Over the past two years, prices for imported softwood lumber to China have been steadily rising and reached the highest levels in three years in early 2018.

The Middle Eastern and North African (MENA) lumber markets grew fast from 2007 to 2015, reaching a peak in 2015. Since then, import volumes have fallen by over 20% to an estimated nine million m3 in 2017.

Although lumber imports to Japan fell in the 4Q/17, the total volume for the year was up slightly for the second consecutive year.

Global Biomass Markets

Global trade of wood pellets has grown quite substantially over the past five years, from 11.8 million tons in 2013 to 18.3 million tons in 2017 with Europe being the dominant market.

Most of the investments in pellet production over the past five years have been in the US South, while investments in Canadian capacity have been limited.

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