North American Wood Fiber Pricing, Supplies and Sawmill Capex BY BROOKS MENDELL
North American wood fiber pricing Figure 1. Existing and Announced Softwood for the first half of 2022 highlighted reLumber Mills in the U.S. South. gional nuance and variability. Meanwhile, the macroeconomic environment grapples with headwinds from inflation, consumer confidence, interest rate hikes, and the ongoing war in Ukraine. Overall, demand for fiber remained strong, supporting the industry sentiment that North American forest products are well positioned for the nearterm. For example, AF&PA announced that total packaging papers and specialty packaging shipments increased 1% year to date through May, signaling robust demand within the pulp and paper sector. Trucking capacity issues were underscored by increasing fuel prices during the quarter. As one U.S. national firm with timber and mill assets in multiple regions reported, “It’s more about truckers than about loggers for us.” Around the country, many fiber buyers and sellers indicated that fuel surcharges were implemented to ease the burden of high fuel prices. However, the use of surcharges was uneven across the SOURCE: FORISK NORTH AMERICAN FOREST INDUSTRY CAPACITY DATABASE continent. U.S. Northeast prices skyrocketed to a four-year high as delivered prices in the U.S. South were flat to negative. upgrades and expansions. DR Johnson announced the reopening of Part of the fiber price stability in the South links to increased sup- the mill in Prairie City, Oregon, this summer. Our team is also watchplies of residual chips. As firms continue to add and acquire capacity, ing CLAW Forestry and their plans for a new 250 MMBF sawmill in most sawmill capacity increases in North America are happening in the Gloster, Mississippi, to startup in 2024, along with the news that Boise U.S. South due to low log costs, ample timber supplies, and proximity to Cascade reached an agreement to acquire Coastal Forest Resources plyend markets. In total, firms announced 4.5 billion board feet (BBFT) in wood mills in Havana, Florida and Chapman, Alabama. Roseburg broke new capacity to come online by 2024, an increase of 17% in the region. ground on the Weldon, North Carolina sawmill in late May. This includes seven new sawmills and two reopenings (Figure 1). Most This article includes data from the Forisk Wood Fiber Review, a quarterly publication tracking North firms plan to add capacity by expanding existing infrastructure: 26 mill America’s major wood fiber markets, and the Forisk Research Quarterly, which includes forest industry projects will add capacity to existing mills, making up 2.2 BBFT, or 50%, forecasts and analysis by sector. of the announced capacity. Forest industry firms based all over North America account for Author: Brooks Mendell the new capital investment activity in the South. PotlatchDeltic in Forisk Consulting LLC Waldo, Arkansas, and Westervelt in Moundville, Alabama, announced 770-725-8477 bmendell@forisk.com
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