Pulp Mills and Sawmills in Latin America had Among the Lowest Wood Costs in the World in 2013

Declining costs for sawlogs and pulplogs in Brazil and Chile over the past few y ears have made the forest industry in the two countries quite competitive. Seattle, WA, January 21, 2014 -- The wood costs for pulp and lumber manufacturer s in the two largest producing countries in Latin America, Brazil and Chile, hav e fallen during much of 2012 and 2013, and were in the 2Q/13 at the lowest level s in over two years, according to the Wood Resource Quarterly (www.woodprices.co m). The two countries currently have some of the lowest wood raw-material costs in the world, and since these costs account for 55-65% of the production costs w hen manufacturing pulp and lumber, it makes the industry quite competitive in th e export market. In Brazil, prices for both sawlogs and pulplogs have come down substantially in US dollar terms the past few years. The average pine sawlog price is currently o ver 20% below the record high levels reached in 2011. This sharp price decline i s more a reflection of a weakening Brazilian Real than any dramatic price change s in the local currency. The current sawlog costs, which were about 30% below th e global sawlog index GSPI, makes Brazilian sawmills very competitive. Although Brazil is a minor player in the global lumber export market, the country has exp anded sales to the US, which is by far the largest consumer of Brazilian softwoo d lumber, this year, with shipments in the 3Q/13 reaching their highest levels i n over two years. Prices for pulpwood in Brazil have followed with sharp declines in US dollar terms but n Real the past year. Current pulplog price five years, and the Brazilian pulp industry pared to a few years ago. a similar trend to those of sawlogs, only modest declines in the Brazilia levels have not been seen in almost has become much more competitive com

Prices for pine sawlogs in Chile have been surprisingly stable in 2012 and 2013 despite higher log demand from sawmills the past year both because of a stronger domestic market and increased exports. Chile is about the tenth largest exporte r of softwood lumber in the world and shipments to China, Japan and the US were all up the first half of 2013 as compared to the same period in 2012. Pulplog prices in Chile have also fallen, with the 2Q/13 prices being about eigh t percent lower than in the 2Q/12. The average cost for Eucalyptus fiber in Chil e is currently the lowest in all countries tracked by the WRQ, making the countr y s pulp mills some of the world s lowest cost producers of hardwood market pulp. Global pulpwood and timber market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, established in 1988 and with subscribers in over 30 countries, tracks sawlog, pulpwood, wood chips, lumb er and pellet prices, trade and market developments in most key regions around t he world. To subscribe to the WRQ, please see www.woodprices.com Contact: Hakan Ekstrom Wood Resources International LLC PO Box 1891, Bothell, WA 98041 +1-425-402-8809 info@wri-ltd.com http://www.woodprices.com