South Carolina's Pulpwood Prices Boosted by Housing Slump, Exports

April 8, 2008; Charlotte, NC

Despite the slowing national economy, pulpwood prices in coastal South Carolina have been resilient because of decreased lumber production and increased exports, an expert in the forest products industry said Tuesday.

Pulp mills operate on small logs and wood chips – a byproduct of lumber production. But, the weak housing market has forced lumber mills throughout the South to cut production, including a mill in Sampit, S.C., and another in Conway, S.C., said Daniel Stuber, operations manager for timber price information provider Forest2Market. To maintain production levels, pulp mills have had to rely on more logs.

“One of the only bright spots for timberland owners in this region is the demand from the pulp and paper industry,” Stuber said. “Land owners have been withholding stands with larger trees until sawtimber prices rebound, but they have been able to generate revenue through thinning practices and harvesting younger stands.”

Increased exports have also helped pulpwood prices. The weak dollar makes it cheaper for pulp and paper companies to purchase products in the U.S. and ship them overseas. This region is often targeted because of its proximity to international ports.

The forest products industry in South Carolina employs almost 30,000 people with an annual payroll of almost $1.6 billion.

Based in Charlotte, N.C., Forest2Market has developed sophisticated analytical tools to accurately forecast timber prices.