Oliver Lansdell from Hawkins Wright delivered his report of The 'Battle for Fibre'.

Mr. Oliver Lansdell highlighted in his presentation that wood chip costs determine the competitiveness of dissolving pulp factories. What changes can we expect in the future regarding wood chip supply and demand, as well as pulp production capacity?

The pulp industry has shifted to the Southern Hemisphere due to local lower-cost planting resources. Since 2020, global wood chip price index has surged by 30-40%. Over the past two years, around 3.3 million tons of pulp production capacity have been indefinitely idled or shut down, primarily due to high wood chip costs. Looking ahead, a tight supply-demand balance may further drive up wood chip prices. On one hand, factors such as supply-side constraints like climate, pests, geopolitical issues, land competition, etc., could reduce the incremental supply of wood chips. On the other hand, demand is accelerating, with increasing production of virgin wood pulp and a surge in biomass demand.

Regarding wood chip supply, the planting area of eucalyptus trees in Brazil has failed to keep pace with the growing demand for woody biomass. Since 2016, timber harvesting in British Columbia, Western Canada, has declined by 44%, equivalent to a reduction of 30 million cubic meters. Prices for softwood logs in Austria and France have been on the rise. In China, domestic supply has increased due to one-off forestry policy changes and a slowdown in the construction industry. However, domestic supply growth is still insufficient to meet the rising demand.