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FOEX Indexes Ltd is an independent company providing audited, trade-mark registered pulp, paper, recovered paper and wood based biomass price indices.

Sep 22, 2020

Market Comments

PIX Wood Finland and PIX Sawn Softwood Timber FAS Finland

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PIX Wood Finland and PIX Sawn Softwood Timber FAS Finland – UPM is planning to close its Kaipola paper mill in central Finland with three paper machines at the end of this year. The mill has been consuming about 1 million cubic meters of wood annually, including both roundwood and byproduct wood. However, the local forestry management association, MHY Kangasniemi-Pieksämäki, estimates that the impact of the closure on the local wood market will be limited as there are other mills in the region consuming wood as well. Some negative impact is still expected especially for spruce pulpwood demand after the mill closure.

The pulpwood market is reportedly running rather weakly, as noted by the Finnish Journal Metsälehti. There are more stands available for harvesting than there is urge to buy. The above-mentioned mill closure news is not making the situation any better. Logging conditions during the coming winter can have an impact on the market development. A mild winter can create lack of possible logging stands, giving a boost to those available for year-around logging.

The roundwood trading volumes in August showed a decline from the previous year but increased from July, according to the wood trade statistics from the Finnish Forest Industries Federation. Compared to July 2020, the latest monthly total volume increased by 17%, and by the same for both logs and pulpwood separately. Individual grades all showed increases, from a 10% hike in spruce pulpwood, to a 20% hike in pine pulpwood. Comparing the volume year-over-year, the total volume decreased by 14%, consisting of a 7% drop in logs and a 20% drop in pulpwood. In logs, the decreases varied from 3% to 10% and in pulpwood from 14% to 23%. The prices showed a downward trend in pulpwood and birch logs, but in coniferous logs especially spruce showed a majority of increasing regional prices. The PIX Softwood Sawlogs Finland index strengthened by 34 cents, or by 0.61%, to 56.41 EUR/m³. The PIX Birch Sawlogs Finland index value decreased by 15 cents, or by 0.35%, landing at 42.82 EUR/m³. The PIX Pulpwood Finland benchmark value slid down by 16 cents, corresponding to 0.91%, with the index closing at 17.47 EUR/m³.

The Finnish sawn softwood export prices reported for both of our indices included a mixed bag of changes, making the two indices to head in different directions. Prices reported for pine sawn timber, headed downwards quite clearly in many cases, while those for spruce sawn timber featured more mixed data. Hence, the PIX Sawn Timber Pine FAS Finland index weakened by 5.56 euros, corresponding to 3.18%, with the index settling at 169.17 EUR/m³. The PIX Sawn Timber Spruce FAS Finland benchmark went up by 89 cents, i.e. by 0.49%, landing at 183.94 EUR/m³.

The PIX Wood Finland price indices are based on the monthly wood trade data by the Finnish Forest Industries Federation, which we convert to a volume weighted 3-month moving average for our benchmark values, after removing the extreme highs and lows before the index calculation. The PIX Sawn Softwood Timber FAS Finland indices are currently based on monthly price reporting from Finnish export sawmills. The indices are calculated with fixed weights on six sawn timber quality grades, which are individually weighted by the volumes reported by the sawmills.