A fire at Tolko’s Lakeview Division has shut down the mill for some time, which is affecting the price of wood fibre for local pulp mill operations. Photo submitted

Price of wood fibre for B.C. pulp mills at a six-year high

Lack of residual chips from sawmills a cause of concern for local mills

Pulp mills in British Columbia and the Western United States paid a pretty penny for wood fibre in the first quarter of 2018, according to the North American Wood Fiber Review.

B.C. and the Western U.S. saw the largest jump in prices quarter over quarter, compared with Eastern Canada and the US South. Prices for wood chips increased by 12 per cent in B.C., which the North American Wood Fiber Review says resulted in the highest price levels in the region for six years.

West Fraser Mills vice president of Canadian woodlands Larry Gardner says there are two things that affect fibre costs for pulp mills.

“One is the shortage of residual chips from sawmills. Because of the shortage of chips, the pulp mills are needing to whole-log chip, meaning they have to take in whole logs and chip them, which is more expensive.”

Gardner says that in B.C., the shortage of residual sawmill chips extends back to the wildfires of 2017.

“There are some chips we can’t utilize because they have charcoal in them.”

He says sawmill closures are also affecting the flow of chips. Tolko’s Lakeview Mill in Williams Lake has been closed since last fall due to a mill fire, and other sawmills in the area have seen temporary shut downs due to economic factors and fibre availability.

The other factor is that the price of fibre is calculated by a formula that takes into account the sale price of the end product, which is at an all time high, says West Fraser’s vice president of pulp and energy operations Keith Carter.

This means that much of the high cost of the chips can be offset by the high sale price, but there are other factors at play.

The increased cost of whole-log chips isn’t reflected in the end-product price, so the pulp mills must absorb that cost.

“We see fewer sawmill chips and have to go further afield to get pulp wood to bring to town to chip up, so there’s the cost of freight and the actual chipping process, which is more expensive. It will be challenging for us to manage those costs moving forward,” says Carter.

“It’s a cyclical business, of course, so there will be a time when the prices fall back again and we’ll probably more readily feel the impact of the expensive whole-log chips. It means we have to tighten our belts anywhere we can.”

Carter says his data shows the pulp fibre price may reduce a bit in 2019, but that the cost will remain near today’s levels for the next two or three years.

Just Posted

UPDATED: Trudeau announces bioregional oceans protection agreement in Prince Rupert

Agreement announced in partnership with 14 central and north coast First Nations

Students sew 1,000 moccasins for Indigenous children in foster care

Prince Rupert schools stitch moccasins and pack backpacks as part of child apprehension campaign

Walk this way: Port officially opens Atlin Promenade

Prince Rupert’s waterfront access was extended with a ribbon cutting ceremony June 20

Pair kayaking from Glacier Bay to Vancouver Island to raise awareness about Ocean Pollution

Lucy Graham and Mathilde Gordon arrived in Prince Rupert on June 16

Marijuana to be legal in Canada Oct. 17: Trudeau

Prime Minister made the announcement during question period in the House of Commons

This Week Podcast — Episode 90

For National Indigenous Peoples Day, organizers of Prince Rupert festivities tell us what’s coming up

Rescued Oregon family simply unprepared for adventure, RCMP say

Agencies now helping the group of four get to their destination in Alaska

Large B.C. tree dies after possible poisoning

Police and District investigate after large chestnut tree’s rapid decline

Canucks release 2018-19 season schedule

Vancouver to face Calgary Flames on Wednesday, Oct. 3, for home opener

VIDEO: Luxury Home and Design Show opens with Italian flare

Event set to run Friday to Sunday at BC Place in Vancouver

Small new charge on BC Hydro bills goes toward new crisis fund

The new fund aims to help customers who find themselves in financial emergencies

Fake cops ‘arrest’ woman, steal $6,000 in latest CRA scam

Vancouver police urge people not take calls from anyone saying they’re from the Canada Revenue Agency

Study shows increase in mountain bike tourism in B.C.

Numbers are up, way up, for bike-related visits to the province

Most Read