Eucalyptus Pulplog Prices in Brazil Have Fallen Over the Past Year and in the 2Q/19 Reached Their Lowest Levels in Three Years

SEATTLE, Nov. 8, 2019 /PRNewswire/ -- Lower operating rates at the major pulp mills in Brazil and healthy inventory levels of wood fiber took pressure off prices of Eucalyptus pulplogs in the 2Q/19. Eucalyptus pulplog prices have been on a roller-coaster ride ever since the Wood Resource Quarterly began tracking wood fiber prices in Brazil in 1988, mostly due to fluctuations in the exchange rates and changes in the fiber demand/supply balance.

Following a 15-year period from 1988 to 2003 when prices fluctuated between US$20-50/odmt, prices took off and trended upward for almost eight years to reach an all-time-high in the 3Q/11. From 2011 to 2015, prices fell substantially to reach an 11-year low in the 4Q/15, which was followed by a period with slightly higher prices. In the 2Q/19, the average price reached its lowest level in over three years as the value of the US dollar strengthened.

It is interesting to compare the price developments for Eucalyptus in US dollar and Brazilian Real terms, as the exchange rate between the two currencies has fluctuated quite substantially over the years. Pulplog prices in Brazilian Real terms have generally trended upward over the past 15 years and reached a 25-year high in early 2019 when the average price was 50% higher than in 2005 (see chart). During the same period, prices in US dollar terms doubled before taking a plunge to 2005 levels. Pulpmills in Brazil now have some of the lowest wood fiber costs in the world. 

For the past eight years, the Eucalyptus pulplog prices in Brazil have consistently been lower than the global Hardwood Fiber Price Index (HFPI), a weighted average of delivered wood fiber prices for 15 key hardwood pulp-producing regions of the world. The discrepancy between the average Brazilian pulplog prices and the HFPI actually reached a 15-year record in the 2Q/19 when Brazil's price fell to 70% of the HFPI price index. Wood fiber costs as a percentage of market pulp prices have been at record lows over the past year, leading to healthy profit margins for the industry.

Global lumber, sawlog, and pulpwood market reporting are included in the 56-page quarterly publication, the Wood Resource Quarterly (WRQ). The report, which was established in 1988 and has subscribers in over 30 countries, tracks sawlog, pulpwood, wood chip, lumber and pellet prices, and trade and market developments in most key regions around the world. Please visit our website WoodPrices.com to learn more about our subscription services.

CONTACT:

Wood Resources International LLC
Hakan Ekstrom
info@woodprices.com
www.woodprices.com

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/wood-resources-international-llc/r/eucalyptus-pulplog-prices-in-brazil-have-fallen-over-the-past-year-and-in-the-2q-19-reached-their-lo,c2957826

The following files are available for download:

View original content:http://www.prnewswire.com/news-releases/eucalyptus-pulplog-prices-in-brazil-have-fallen-over-the-past-year-and-in-the-2q19-reached-their-lowest-levels-in-three-years-300955070.html

SOURCE Wood Resources International LLC