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Wood chip exports from Chile plummeted in 2020, with shipments falling by over 40% from the first quarter to the fourth quarter. Only an estimated 450,000 odmt were shipped in the 4Q/20, the lowest quarterly volume since the 3Q/15.

A combination of substantially reduced wood fiber consumption by Japanese pulpmills and an increased supply of lower-cost hardwood chips from Vietnam to Asian markets has contributed to the decline in demand for Chilean Eucalyptus chips in 2020.

Together with Vietnam and Australia, Chile has long been one of the primary wood fiber suppliers to the pulp industry in Japan. In 2013, the country was the number one source of wood chips to Japan, with a market share of 23%. However, the Chilean wood fiber supply in that market has diminished, and the percentage of total imports in the 4Q/20 was down to 11%.

The lower chip sales from Chile contributed to a five-year low in total wood chip shipments from Latin America in the 4Q/20. In just three years, the continent’s export volume has fallen from 1.24 million odmt in the 4Q/17 to about 720,000 odmt in the 4Q/20. Exports by Brazil have been relatively steady the past few years, ranging between 200-300,000 odmt per quarter.

Shipments from Uruguay, the third largest wood chips exporter on the continent, stopped entirely in the second half of 2020. The halt in shipments followed a long period when the country supplied pulpmills in Europe, predominantly Portugal, with between 500,000 and one million odmt of Eucalyptus chips annually.

The declining demand for hardwood chips by Asian pulpmills in 2020 has substantially reduced export prices (FOB) in Brazil and Chile. The Latin American wood chip export prices fell in the second half of 2020 to the lowest price in over ten years.

The post Chile’s wood chip exports down 40% in 2020 appeared first on Timber Industry News.