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WhatWood Global Trends Review Global Trends Review, April 07-20, 2014: raw wood concerns around the world; lumber production in Finland predicted to grow 2% in 2014

Global Trends Review, April 07-20, 2014: raw wood concerns around the world; lumber production in Finland predicted to grow 2% in 2014

24 April 2014 ` 21:01  

According to the latest Eurostat figures quoted by Fordaq, in 2013 not only the sawmills from Europe made their presence obvious on the Chinese market, but also EU’s softwood log exporters more than tripled their deliveries compared to 2012. France has the lead, with a share of 27.4% of all European exports (+100% on-year), followed closely by Romania (+27.2%) and Lithuania (+21.9%). As we reported earlier, this trend of raw wood exports growth to China concerns European sawmillers.

Another country which feels the pressure of lower-cost Chinese sawmills is New Zealand. According to TTJ, more than 40 sawmills closed in the past decade in this country. China’s expanding economy has driven a surge in the volume and price of New Zealand log exports which harmed local mills who are further challenged on the global market by strong NZ dollar. “The industry has been affected by high exchange rates and very competitive export price trends in recent years, and so has not been able to add value to its lumber exports this decade,” NZ consulting company DANA said in its report quoted by TTJ. We may add that in 2013 New Zealand outpaced Russia and became the leading log exporter to China.

Another raw wood concern was expressed in United Kingdom by local office of Kronospan who warned that biomass plants are fuelling increases in timber prices, TTJ said quoting The Daily Post. UK has seen a 10% surge in timber prices only in the first quarter of this year, with a price doubling recorded in the past 10 years. Kronospan’s plant in Chirk, Wales has already reduced exports which constituted 10% of sales, as market conditions are fierce and the competition with Central and Eastern Europe is very strong. The UK market is also running a risk of being invaded by cheaper imports, especially in case of exchange rate fluctuations. So, Kronospan is asking the UK government to act against subsidies on biomass. The company thinks that subsidies should be given only for wood that can’t be used for anything else. Note that earlier Austrian producers also protested against biomass subsidies which undermine wood procurement of the local forest industry.

Importation of softwood logs to Sweden (fourth largest importer of logs in the world) reached a 10-year high in 2013 with Norway and Latvia being the major suppliers of both pulplogs and sawlogs, reported the Wood Resource Quarterly. There has been a 16% decline in the importation of hardwood logs at the same time. The forest industry in Sweden imported about 10% of its wood raw-material needs in 2013. Of the total imported log volume, around 10-15% were sawlogs mostly from Norway destined for sawmills in the southern part of Sweden. Shipments from Norway grew considerably due to the closure of Sodra Tofte pulpmill in Norway last summer. As a consequence, private forest owners in the region have increased their log shipments to pulpmills in central Sweden which changed log flows and prices in the local market.


CLT remains the most dynamic structural wood product, Holzkurier reports. After massive investments, growth has somewhat cooled, but experts still detect an annual growth potential of 5-10%. If conditions change, however, that could be much higher. Germany, Austria and Switzerland has more than doubled CLT production between 2008 and 2011, since then the growth has slowed a bit, also because there has not been a major investment in the industry recently. But plant expansions and modernisation cause capacity to rise steadily. However, to go on with the growth, the industry needs development of standardization, prefabrication and marketing. In Austria, there is now research on possible ready solutions using CLT like wall systems from this product fully fitted with insulation. In addition, new species like birch are being tested quite successfully for cross-laminated timber production.

To adjust to the market, Norske Skog will shut down for nine weeks one of the three newsprint-making machines at Skogn mill in Norway in mid-2014, which will put 30,000 tonnes of product out of the market.

Södra Interior will move MDF production from its plant located in Jokkmokk, Sweden, to a site in Lithuania. Södra says that the plant in Lithuania is located close to both raw materials and customers. With this move, the company creates the conditions for a competitive production that can meet demand in the European and Swedish markets. The decision means that production at the plant in Jokkmokk will be discontinued.

Average pellet price in Germany (6-tonne party, delivered), according to German Energy Wood and Pellet Association (DEPV), is currently €257.27, which is 6% less than last month and 5% less than in April 2013. Earlier the association reported that mild winter led to pellet price decreases in the first quarter of this year.

Poland has produced about 600,000 tonnes of wood pellets in 2013. Jointly with imports, the Polish pellet market was somewhere around 1 million tonnes, Fordaq said quoting the Ukrainian Biofuel Portal. The report notes that due to the collapse of the green certificate market, strong growth in the Polish pellet market has suddenly stopped in 2013. In the first quarter of 2014, the actual gross prices on the Polish pellet market were €190–250/t in the west, €162-262/t in the east, €176-264/t in the north and €131-286/t in the south of the country. Low prices in the south and east are explained by proximity of Belarus and Ukraine that supply large volumes here.

The Pellervo Economic Research Institute (PTT) forecasts growth of 3-4% in Finnish softwood lumber exports this year, EUWID quotes. There are no signs of a slow-down in export sales for the time being. A further increase in exports of 4-6% is expected for 2015. However, softwood lumber production in Finland is only expected to grow by around 2% this year, due to continuing weakness in domestic consumption. PTT believes that growth in production of up to 5% will be possible in 2015. Regarding the export prices, the institute forecasts an increase of 2-3% this year and another rise of 3-4% in 2015.

WhatWood’s reviews are prepared using corporate press releases, Holzkurier, Timber Trades Journal, Fordaq, EUWID Wood Products, ITTO, ForestTalk, and EUWID Paper.

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