Pacific Northwest Woodchip Market .

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Pacific Northwest Woodchip Market. May 2008. The Northwest Being Talked about
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Pacific Northwest Woodchip Market May 2008

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The Northwest Being Discussed… Pacific Northwest Woodchip Market Washington W. Montana Oregon Idaho No. California

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Pacific Northwest Woodchip Market Who are the players in the Pulp & Paper area? What amount of what do they expend? What does the fiber adjust resemble?

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Puget Sound Kimberly Clark – Everett 250 Nippon – Port Angeles 60 Port Townsend – P.T. 400 Simpson – Tacoma 540 Evergreen – Cosmopolis 300 Export to B.C. 740 * Import From B.C. ( 100) 2,190 Lower Columbia River Blue Heron – Oregon City 70 Boise – St. Helens 300 GP – Camas 210 GP - Wauna 300 Longview Fiber 940 SP News – Newberg 180 Weyco/Norpac – Longview 1,170 3,170 * Estimate Inland Boise – Wallula 510 Inland – Spokane 100 Ponderay – USK 180 Potlatch - Lewiston 720 Smurfit – Missoula 620 Export to B.C. 250 * Import From B.C. ( 40) 2,340 Willamette Valley/No. Calif. Evergreen - Samoa 480 GP – Toledo 500 Pope & Talbot 180 International Paper - Albany 360 International Paper - Springfield 500 Export to Japan 620 2,640 NW Softwood Chip Demand: 2008 Estimate - MBDU/Year Pacific Northwest Woodchip Market

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NW Hardwood & Sawdust Demand: 2008 Estimate – MBDU/Year Pacific Northwest Woodchip Market Puget Sound Hardwood (Chips & Sawdust) Sawdust (Softwood) Kimberly Clark 70 - Port Townsend - 40 70 40 Lower Columbia River Blue Heron 20 - Boise 260 - GP – Camas 180 50 GP – Wauna 110 150 Longview Fiber 90 30 Weyerhaeuser 50 - 710 230 Willamette Valley GP – Toledo 100 - Pope & Talbot - 180 Export to Japan 30 - 130 180 Inland Boise 60 80 Potlatch - 320 60 400

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NW Supply/Demand Estimate – 2008 (MMBDU) Pacific Northwest Woodchip Market

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NW Fiber – Principal Woodchip Market Drivers Pacific Northwest Woodchip Market What are the key drivers of the woodchip showcase in this locale? Lodging Starts Lumber Production Rates/Product Pricing/Log Costs Pulpmill Operating Rates/Pulp & Paper Prices Transportation/Diesel Costs Pulpwood accessibility Resource requirements

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Pacific Northwest Woodchip Market U.S. Lodging Starts: Annual Rates

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Western Lumber Production 1988 to Date Pacific Northwest Woodchip Market

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Western Lumber Production By Region 1989 to Date Pacific Northwest Woodchip Market

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Pacific Northwest Woodchip Market Bone dry units of chips created per MBF stumble generation

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Green DF 2X4 Standard & Better: Nominal Sales Price 1988 to Date Pacific Northwest Woodchip Market

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Green DF 2X4 Lumber Price Portland: 2005 to Date Pacific Northwest Woodchip Market

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Pacific Northwest Woodchip Market Pulp and Paper Prices Year Over Year (Feb, 2008) Pulp costs: NBSK up 15% NBHK up 18% Paper costs: Newsprint down 5% All uncoated, covered white papers up 2 – 17% Liner, medium, kraft, boxboard, and so on up 4 – 12%

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Western US Pulp Mill Operating Rates: 2006 to Date Pacific Northwest Woodchip Market

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West Coast No. 2 Retail Diesel Price History Pacific Northwest Woodchip Market

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Pacific Northwest Woodchip Market A couple remarks about transportation costs, pulpwood accessibility, and asset imperatives: Companies are experiencing issues in overseeing costs in light of heightening fuel valuing. The Pacific Northwest is not a pulpwood economy … the present situation is not reasonable. Asset imperatives will keep on being an issue for giving financial wood fiber (especially hardwood) for the mash and paper industry.

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Pacific Northwest Woodchip Market In light of the fiber adjust and the key drivers: Where have we originate from and what do things look like as of right now?

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Softwood & Hardwood Woodchip Receipts: MBDT every Day 2006 to Date Pacific Northwest Woodchip Market

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Softwood Receipts: Residuals MBDT every Day 2006 to Date Pacific Northwest Woodchip Market

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Softwood Receipts: Whole Log Chip Percentage 2006 to Date Pacific Northwest Woodchip Market

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Pacific Northwest Woodchip Market PNW Pulpwood Price History

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Pacific Northwest Woodchip Market PNW Woodchip Price History

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Pacific Northwest Woodchip Market Woodchip Inventory and Consumption

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NW Fiber – Future Supply/Demand and Cost Drivers Pacific Northwest Woodchip Market Housing begins: Doldrums proceed with flow yearly rate of 940K … not a single end to be seen; oversupply of existing and new homes; Heaven in 2011 Pulp & Paper: Forecasts indicate debilitating in business sectors in late 2008 and 2009; working rates won\'t change broadly from momentum aside from if real retreat is nearby; who will survive the cost crunch? Leftover chips: Lumber generation rates (lodging begins); innovation upgrades make higher recuperation rates, bring down chip yields; super-plants; log costs need to adjust to item evaluating; woodland administration/timber collect governmental issues Pulpwood accessibility/cost: Cyclical through the working season; requests will stay high through 2009; rivalry with low esteem sawlogs; express gratitude toward God for blowdown Diesel cost – who knows? $7.00/gallon? Trade chip volume: Can the Japanese keep on consuming chips at conveyed costs in abundance of $240/BDU?; swapping scale impacts? Birch supply: Resource decreases encourage after some time; request expands; planting programs Competing utilizes: Board plants; pellet factories; cellulosic ethanol; biofuels Wood items business adjustments: Mill terminations/combination of non-coordinated plants; proficient merchants

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Hardwood Considerations Pacific Northwest Woodchip Market Current chip costs are high … paper edges low … drivers are pull costs, asset accessibility, softwood blunder business doldrums, blowdown species circulation Hardwood request … long haul no change Lumber markets will stay solid over the long haul (item moves) Wood chip utilization by mash factories will stay at ebb and flow levels as factories keep on making esteem included items that request hardwood content No new sawmill residuals in here and now … (Independence, OR) Whole log chips will contain +70% of the market Log costs … pulpwood esteem will stay higher than SW, timber will shift with market requests Resource limitations will proceed with Total developing stock will decrease in one decade from now by +10% principally in conifer/blended conifer stands (generally in littler size classes) Land proprietorship changes of concern (TIMO\'s, REIT\'s, and so forth; transformation to different uses) Total collect levels will most likely proceed at the ebb and flow levels for the following five to ten years 10+ years - ebb and flow gather level not supportable without concentrated administration of birch (10-15K sections of land planted every year?) … at present unbalanced to conifer stands

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