For decades the Japanese pulp industry has been remarkably resilient in its use of imported hardwood chips, even as global pulp demand cycles waxed and waned. Indeed, in 2008 a record 12.3 million BDMT’s of hardwood chips were imported with Australia being the largest supplier, delivering more than 36% of the total.
Softwood imports, while still important, have fallen from peaks in the late 1990s because of greater use of recycled fibre.
However, in early 2009, even the Japanese pulp industry appears to be suffering from the crisis. This is probably led by massive reductions in the production of cars, machine tools, electronic goods and mobile phones, all of which require thick paper manuals. Reports of extended stoppages by several Japanese pulp mills, as well as new paper machines are leading to major reductions in orders for international hardwood woodchips, and demands for large reductions in FOB prices.
The crisis has also hit Chinese pulp mills, with expansions underway or planned which will be shelved for an extended period, delaying an anticipated increase in woodchip import demand.
The average landed price of Australian hardwood chips in Japan in 2008 was the highest of all major suppliers, at US$ 206 per BDMT CIF. However changing exchange rates later in 2008 seriously reduced USD prices: for example on an FOB basis for plantation chips from a high of more than US$ 190 per BDMT mid- year to less than $140 in Q4, 2008. Prices for 2009 had not been agreed at the time of writing, but are expected to fall in USD terms.
A Boston-based RISI publication: the 2009 edition of the “International Pulpwood Trade Review” is now available (contact [email protected]). This publication is now widely regarded as the “bible” of global wood fibre resources and trade.
A co-author of that report, New Zealand based DANA Limited Director Dennis Neilson is organizing a major conference on global and Australian- specific trends in the softwood and hardwood woodchip, woody biomass and wood pellet production and trade in 2009 and beyond; and their significance to Australian forest owners and wood fibre exporters. This will be held in Melbourne, Australia on 23 April (for details contact Pam Richards ([email protected]). Several internationally recognized experts, led by RISI Inc. Director Robert Flynn and LeadingEdge publisher Robert Eastment will be presenting papers.
The conference will also cover international and Australian- specific developments in tree based carbon offset trading. Some experts are predicting that major Australian CO2-e emitters could quickly establish the world’s largest tree based carbon offset industry from 2010, when the Australian Emissions Trading Scheme (ETS) comes into play.