US Wood Chip Market

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RISI Details Wood Chip Supply & Demand Changes at 75th Forest Resources Association Event

BOSTON, USA--March 17, 2009--/PRNewswire/-- RISI analyzed the economic health of North American timber markets this weekend at the Forest Resources Association's annual meeting in Hilton Head, SC. RISI stated that North American supply and demand for sawmill residual chips has taken some twists over the past year, with lumber demand tanking, pulp and paper nose-diving since the fourth quarter, and biomass development running steady throughout. Furthermore, the rapid expansion of higher-cost in-woods chip production steadily increased through 2008 to meet pulp demand, which was strong until third quarter.

Currently, however, about 24 pulp and paper mills in the US and another 12 in Canada are taking varying degrees of curtailment - anywhere from single machine to full mill shutdown. RISI anticipates some relief is in store due to their forecast of a moderate recovery in US housing starts beginning by the end of the year and continuing throughout 2010. A pickup in starts will return limited residuals to the wood market - a good thing considering RISI's Wood Biomass Market Report suggests over 54 million green tons of new wood demand will come from North American energy, pellet, and liquid biofuel development through 2015. An increase of in-wood chip volumes is expected to find a home among wood energy and pellet consumers, RISI anticipates.

Rocky Goodnow, RISI Director of North American Timber commented, "We've seen a dramatic decline in consumption at pulp and paper mills but demand will improve with a recovering economy, although some capacity will come back and some will not." He continued, "Chip consumption will also benefit from growing demand from biomass consumers."

The Wood Biomass Market Report is a monthly publication that focuses on wood biomass feedstock pricing, project development and capital investment, government incentives and regulations and policies as it tracks the rapidly growing market. A one-year subscription to the Wood Biomass Market Report can be purchased for $497 at www.risiinfo.com/woodbiomass, by calling 866.271.8525, or by sending an email to wt@risiinfo.com.

About RISI

RISI is the leading information provider for the global forest products industry. The company works with clients in the pulp and paper, wood products, timber, tissue, nonwovens, printing and publishing industries to help them make better decisions.

Headquartered in Boston (Bedford), Massachusetts, RISI operates offices in Brussels, Belgium; Atlanta, Georgia; San Francisco, California; Portland, Oregon; Sao Paulo, Brazil; Shanghai, China; Singapore; and Charlottesville, Virginia. More information can be found at www.risiinfo.com.