Global Wood Fiber Supply

- Overview and Regional Profiles

International Pulp Week

May 9, 2005
Montreal, Canada

Håkan Ekström
Wood Resources International, LLC

Wood Resources
International
Outline

• Global Wood Fiber Supply

• Global Wood Fiber Prices

• Eucalyptus Fiber Supply

• Regional Profiles

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 Global Pulpwood Fiber Consumption
90

80

70
Million odmt

60

50

40

30

20

10

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u la a p d a e s h a
, So in Br Ja
w
e
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Fr a rm Sp orw eal str
US
F S ad o r
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Source: Wood Resources International Wood Resources

International
 Global Pulpwood Fiber Mix

Conifer Conifer chips

roundwood 27.5%
34.6%

Non-conifer
roundwood
29.2%
Non-conifer
chips
8.7%

Wood Resources
Source: Wood Resources International LLC
International
 Wood Fiber Mix, Con/Non-Con
100%

80%
Non-con, chips

60% Non-con, rwd

Con, rwd

40% Con, chips

20%

0%

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 Global Average Wood Fiber Price
1988 – 2004
120

110

100
US$/odmt

90

80

70
Conifer
60 Non-conifer
50

Source: Wood Resource Quarterly (WRI) Wood Resources

International
 Eucalyptus Wood Supply

• The Largest Supply of Eucalyptus Fiber is in

Latin America and Asia.

• Costs of Eucalyptus Plantation Fiber Often

Lower than Native Hardwood Fiber in the
Northern Hemisphere.

• Global Trade of Eucalyptus has Increased the

Past Five Years.

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 Global Supply of Eucalyptus Fiber
Oceania
10.0%

Asia
12.8%

South America Africa

57.2% 12.4%
Europe
7.6%

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Source: Wood Resources International LLC
International
 Wood Fiber Markets – US South
The largest pulpwood consumer in the world.

90
The industry consumes 80
almost 70% conifer 70
fiber. 60
50

US$/odmt
40 Conifer Roundwood
Wood fiber prices have
30
trended upward the 20
Non-Conifer Roundwood

past 15 years. 10
0

The supply of hardwood

pulpwood is tightening. Source: Wood Resource Quarterly (WRI)

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 Wood Fiber Markets – Canada West
Major Market Pulp Producer

160
Conifer residuals
140
account for over 85% of Conifer Chips
120
total fiber consumption.
100
80

US$/odmt
Wood fiber costs among 60
the lowest in the world. 40
20

Increased wood supply 0

from beetle killed pine

the next 10 years. Source: Wood Resource Quarterly (WRI)

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 Wood Fiber Markets – Canada East
Major Newsprint and Market Pulp Producer

Conifer wood fiber

accounts for almost 75%
of total consumption.

Wood fiber prices are

high and trending
upward.

Substantial reductions of
wood supply the next few Source: Wood Resource Quarterly (WRI)
years.
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 Wood Fiber Markets – Sweden
The second largest conifer wood fiber consumer in the world.

The pulp industry 200

consumes almost 80% 180 Conifer Roundwood
conifer wood fiber. 160
Conifer Chips
140
120
After declining prices 100

US$/odmt
80
during most of the 1990’s,
60
prices have increased by 40
over 50% the past three 20
years. 0

Imported wood fiber Source: Wood Resource Quarterly (WRI)

accounts for almost 20%
of total supply. Wood Resources
International
 Wood Fiber Markets – Brazil
The fastest growing pulp industry in the world.
The pulp capacity has
increased by 18% in just two
years.

The industry consumes

mostly logs from fast-
growing pine and Eucalyptus
plantations.

Dramatic price increases

have occurred over the past Source: Wood Resource Quarterly (WRI)
two years, but Brazil is still
one of the lowest cost Wood Resources
International
producers in the world .
 Wood Fiber Markets – Indonesia

• Increased use of Plantation Fiber but Still

Large Usage of Mixed Tropical Hardwood
Fiber.

• Wood Fiber Costs are Among the Lowest in

the World.

• Higher Exports of Wood Chips to China and

Japan likely over the Next 5 years.

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 Wood Fiber Markets – Russia

• Large Volumes of Available Supply

• Major Pulpwood Exports from Western Russia

• Limited Demand for Pulpwood Domestically

• Wood Fiber Costs are Increasing

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 Wood Fiber Markets – China

• Rapid Increase in Paper Consumption.

• Lack of Domestic Wood Supply.

• Plantation Programs by the Government Exist

but have Limited Success.

• Chinese Investments in Foreign Pulp Capacity

Increasing.

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 Outlook for Global Wood Fiber Supply

• Most of the global expansion of wood supply

will be that of Eucalyptus fiber from
plantations in the Southern Hemisphere.

• Hardwood fiber costs in the Southern

Hemisphere are likely to go up near-term but
will continue to be substantially lower than
wood fiber costs in North America and
Europe.
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 Summary
• Wood fiber consumption for conifer static, while
non-conifer demand is increasing rapidly.

• Global wood fiber prices reached a bottom in 2001

and have been on an upward trend the past three
years. This trend is likely to continue on a short-
term basis.

• We can expect to see most additional global pulp

capacity in regions with eucalyptus plantations.
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 Questions?

Håkan Ekström
Wood Resources International, LLC
Seattle, USA
Phone: 1-425-402-8809
Email: hekstrom@wri-ltd.com

www.woodprices.com

Wood Resources
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