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Hakan Ekstrom
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Mr. Ekstrom is the President of Wood Resources International LLC . The company is an internationally recognized forest industry consulting firm established in 1987, which publishes two quarterly timber price reports and have readers in over 25 countries. The Wood Resource Quarterly, established... More
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  • Brazilian Sawlog Prices Have Declined 40% Since 2011, And In The 2Q/15 Hit Their Lowest Levels In Ten Years

    Sawlog prices in Brazil fell to their lowest level since 2005 in the 2Q/15, after having been in a falling mode for about four years. Current prices for pine logs, in US dollar terms, are almost 40% below their all-time high in 2011, according to the Wood Resource Quarterly (WRQ).

    Over the past 20 years, sawlog prices have fluctuated quite substantially with a period of slowly declining prices from 1995 to 2003, followed by a dramatic increase from 2003 to 2008 when prices increased almost fourfold.

    The global financial crises of 2008 hit Brazil hard, as with most other countries in the world, resulting in log prices falling substantially in just a few quarters. After the global recession came a period of price recovery, which lasted almost three years until the all-time high was reached in 2011. Subsequently, there was a long period of declining prices.

    The price fluctuations in Brazil have, to a large extent, tracked the Global Sawlog Price Index (OTCPK:GSPI) over the past 20 years, although the GSPI price swings have been less dramatic. However, there is one exception, the period from late 2012 to early 2014, when the GSPI increased while prices in Brazil continued their downward trend, reports the WRQ ( This came during a period when the Brazilian currency continued to weaken against the US dollar, whereas many other currencies in Europe, Oceania and Asia were unchanged or in recovery mode.

    The sharp price swings in Brazil over the past ten years can mostly be attributed to the fluctuation in the value of the Brazilian Real. A closer look at the price trends for sawlogs in the local currency paints a very different picture than the price history in US dollar terms. Average prices in the Real from 2007 to early 2014 have actually been quite stable. However, since the 1Q/14, prices have taken off and reached an all-time high in the 2Q/15, an increase of about 10% in 18 months.

    Exportation of softwood lumber from Brazil has been increasing in 2015, with the 2Q/15 shipments reaching their highest levels since 2006. With the lumber export market improving, particularly in the US, there is likely to be upward price pressure on pine sawlogs in the coming 12 months.

    Sep 25 1:50 PM | Link | Comment!
  • Sawlog Prices Declined In Many Countries During 2014 And The GSPI Price Index In The 4Q/14 Was At The Lowest Level In Two Years

    For the third consecutive quarter, the GSPI price index fell in the 4Q/2014 to the lowest level in two years, reports the Wood Resource Quarterly. The biggest price declines the past year have occurred in Europe, Latin America and Oceania, while prices in North America have remained stable thanks to healthy domestic demand for lumber.

    Sawlog prices were generally lower throughout the world both in the local currencies and in US dollar terms in the 4Q/14 as compared to earlier in the year. The Global Sawlog Price Index (OTCPK:GSPI) fell for the third consecutive quarter to $83.12/m3, which was down 2.6 % from the previous quarter and 6.3% lower than the same quarter in 2013, according to the Wood Resource Quarterly (WRQ). The GSPI is currently at the lowest level in two years.

    Over the past year, sawlog prices have fallen the most in Northern and Central Europe in US dollar terms, predominantly as a result of a weakening Euro. Domestic log price also declined in Latin America and Oceania. The only continent where prices did not decline was North America, where healthy US domestic lumber demand and respectable export volumes from both the US and Canada kept consumption of logs as high as in 2013.

    The west coast of the US, British Columbia and New Zealand have expanded log and lumber exports to China quite substantially over the past few years, and these are also the regions that currently have the highest sawlog prices as compared to their respective ten-year averages. In the northwestern US, there has been a steady increase in log costs since 2009 and the 4Q/14 prices for Douglas-fir and hemlock sawlogs were 25% higher than their ten-year averages.

    On the other end of the spectrum are Russia and Brazil, two regions that currently have substantially lower sawlog prices as compared to the average for the period 2005-2014. For both countries, prices have fallen because of a stronger dollar. In their local currencies, current prices are actually higher than the average price over the past decade.

    Countries that had the highest and lowest domestic sawlog costs in the 4Q/14 as compared to the average costs for the past ten years were:

    4Q/14 higher then 10 y avg 4Q/14 lower than 10 y avg

    US, Northwest (+25%) Sweden (-4%)

    New Zealand (+21%) Finland (-6%)

    Canada, West (+19%) Canada, East (-8%)

    Latvia (+14%) Brazil (-17%)

    Estonia (+12%) Russia, NW (-31%)

    In its latest issue, the WRQ reported that sawmills in Central Europe had some of the highest wood raw-material costs in the world in the 4Q/14, while sawmills in Russia and Latin America enjoyed quite competitive wood costs.

    May 03 2:00 PM | Link | Comment!
  • Softwood Lumber Prices Fell Towards The End Of 2014 In The US, Japan And The Nordic Countries, While Import Prices To China Remained Unchanged From Earlier In The Year

    Softwood lumber exports were 5-8% higher in Canada, Russia and the Nordic countries in 2014 compared to 2013, reports the Wood Resource Quarterly. Prices for lumber trended down over the course of the year, mainly because of the strengthening US dollar and weaker wood markets in Europe and Asia.

    Global trade of softwood lumber has continued to trend upward ever since the global financial crises in 2008. In 2014, export volumes were up 5-8 percent for a majority of the largest lumber-exporting countries in the world, including Canada, Russia, Finland, Sweden and Germany, according to the Wood Resource Quarterly (WRQ). Of the top fifteen exporting countries, only Austria, the US, New Zealand and the Czech Republic reduced their export volumes in 2014 as compared to the previous year.

    Lumber market update - North America

    Lumber consumption in the US increased 6.9% in 2014 as compared the previous year, according to WWPA. This increase came because of a rise in consumer confidence and an improved housing market. Higher demand for lumber resulted in increases in lumber production in the Western and Southern states, while sawmills in British Columbia reduced production in 2014.

    In the US, lumber prices have gone through some ups-and-downs the past two years with southern yellow pine prices having fluctuated between $198/m3 (actual size) and $284/m3 over the period. Prices averaged around $250/m3 in February, 2015.

    Lumber market update - Northern Europe

    Lumber prices declined during much of the fall of 2014 in both Sweden and Finland because of the weakening of the export market during the second half of the year. Despite the reduced demand from the foreign markets, the sawmill sectors in the Nordic countries did not cut back production as much as needed to keep the prices at the high levels reached in the first half of the year. As a consequence of a surplus of lumber in the market, prices fell about 13% during the fall.

    Lumber market update - Japan

    The higher sales tax that was implemented in the spring of 2014 in Japan had a major impact on consumer spending, including the investments in new housing. The wooden housing starts were down 11 percent in 2014 from 2013. Lower demand for lumber impacted both lumber production in Japan and the importation of wood products in 2014, as reported in the WRQ ( With the reduced demand and weaker Yen, lumber prices in US dollar terms fell quite substantially during 2014.

    Lumber market update - China

    The demand for lumber in China weakened during the second half of 2014 with import volumes of softwood lumber in the last quarter of the year falling nine percent from the 3Q/14 and six percent from the same quarter in 2013. The average import price for softwood lumber stayed fairly flat for most of the summer and fall of 2014.

    May 03 1:57 PM | Link | Comment!
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