Wood fiber costs for US pellet manufacturers fall in Q2

Wood fiber costs for US pellet manufacturers fell in the 2Q/19, while Canadian pellet producers experienced higher costs due to reduced supply of sawmill residues, reports the North American Wood Fiber Review.

Many pellet manufacturers in North America have had to increase the usage of logs for their feedstock in 2019 because of reduced availability of lower-cost sawmill residues. This has resulted in higher total wood fiber costs and increases in the pellet feedstock price indices for both Canada and the US in the 1H/19, according to NAWFR.

Seattle, USA. In late 2018, higher demand and tighter supply of low-cost sawmill residues pushed wood fiber costs higher for pellet producers in both Canada and the US. WRI’s feedstock price indices increased during the fall of 2018 and in early 2019 to reach their highest levels in two years, according to the North American Wood Fiber Review (NAWFR). The price increase in the US was mainly due to the wet logging conditions in the southern states that began in late 2018 and intensified in the 1Q/19, which negatively affected harvesting operations and increased costs for roundwood. In the 2Q/19, the Pellet Feedstock Price Index for the US (PFPI-US) fell 2.3% q-o-q, mainly due to slightly higher usage of residual chips instead of costlier logs.