Wood Fiber Costs for U.S. Pellet Producers Slumped

Author:Suny Group

According to NAWFR, the North American –pellet manufacturers were forced to increase the usage of logs as feedstock, mainly on account of the shortage in availability of lower-cost sawmill residues. This in turn led to higher wood fiber costs in the region.

Also, the U.S. and Canadian indices for pellet feedstock price surged higher in the initial half of 2019. The increased demand and tighter supply of low-cost sawmill residues had resulted in higher wood fiber costs for pellet producers in both the U.S. and Canada even during late 2018. The Wood Resource International’s feedstock price indices touched the highest level in almost two years, NAWFR noted.

The wet logging conditions in the U.S. Southern states, which began in late 2018 and further intensified in the first quarter of the current year, impacted harvesting operations, thereby resulting in increased prices for roundwood. The Pellet Feedstock Price Index for the U.S. recorded quarterly decline by 2.3%. On the contrary, the Index for Canada increased significantly by almost 12% over the prior quarter in Q2 this year.

NAWFR noted that ongoing temporary and permanent closures of sawmills in the B.C region is likely to further impact supplies of sawdust and shavings.