Wood costs account for between 50-55 percent of the production costs for pulp mills in the US. Historically these costs have often been substantially lower in the Southern states than in the Northwest — the two major pulp-producing regions of the country. However, this has been changing with the most dramatic regional price movements in North America happening in the US Northwest, where prices for softwood chips, the major fiber source for the region’s pulp mills, have fallen for five consecutive quarters, says Hakan Ekstrom of Wood Resources International (WRI).
During much of the past seven years, wood costs
have been substantially higher for pulp mills in Western US than they have for
pulp mills in the Southern states. However, sharply falling wood chip prices in
the West during 2012 and 2013 have improved the competitiveness of the region’s
pulp mills.
