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WhatWood Global Trends Review Global Trends Review, December 01-14, 2014: Global pattern of softwood lumber demand in 2014

Global Trends Review, December 01-14, 2014: Global pattern of softwood lumber demand in 2014

23 December 2014 ` 16:59  

Demand for softwood lumber has been steadily increasing on a worldwide basis since the great recession. As a result, lumber shipments in 2014 are the highest since 2007 by far, according to the Wood Resource Quarterly.

Lumber prices in both Sweden and Finland have been trending upward since early 2012, and in the 3Q/14 they were at their highest levels in 3.5 years. For Swedish producers, the markets in Egypt, the United Kingdom and Denmark in particular have grown this year.

Benefiting from a weakening currency, Russian lumber exporters have increased export volumes during the summer and fall this year with the 3Q/14 shipments reaching a record high. The biggest increase in exports has been to China (+11% compared to 3Q last year).

In order to compete with lumber from Russia, Canada and other regions, Scandinavian companies work closely with Asian countries on the marketing and standardization matters.

For instance, Metsä Wood has signed a cooperation agreement with Itochu Group with the aim of increasing sales in the Asian market. The agreement makes Itochu an agent and distributor for Metsä Wood’s sawn timber in the Japanese market as of 1 January 2015.

Also with European participation, China has approved in September a new fire norm that paves the way for more wood construction in the country. The new norms address to single-family homes, multi-unit buildings as well for LVL construction, Swedish Wood announced quoted by Fordaq.

As Jan Söderlind, International Director for Swedish Wood points out, association’s goal is “a fire norm that matches the Swedish regulations.” Wood hasn’t been used a lot as a building material by far in China, largely due to restrictive standards. The new rules pave the way for more construction of buildings with carcassing, infill walls, wood framework, hybrid constructions and laminated timber constructions. European fire experts have worked very closely with the Chinese fire authorities through European Wood association, said Söderlind.

Presently the rules allow wood constructions of a maximum of three storeys and interior partitions made of wood may only be used in buildings no higher than six storeys. For hybrid constructions, the height limit is 24 metres and for laminated timber constructions, it is 15 metres. The permitted maximum size of a laminated board is limited to 180 m2 per storey or 3,600 m2 with a sprinkler system. This still looks restrictive for European companies, so the association is going to push the standards further to allow wide use of CLT beams.

Reduced demand for dimensional lumber in China has determined Western Forest Products to close its Ladysmith (British Columbia, Canada) sawmill from 5 December 2014, company reported. The mill produces dimensional lumber specifically for China, so the measure seems to be temporary, for the time of market weakness here.

Nevertheless, the 3Q/14 lumber import volume in China was actually the second highest on record, as deliveries for nine months increased 5% year-on-year, WRQ reported.

In 2013, East Asia was Sweden’s growth market, but this year it is Egypt. The traded timber volumes are enormous, and so are the expectations concerning the United States, reported Holzkurier quoting a presentation given by Magnus Niklasson, market analyst for the wood industry association Skogsstyrelsen. In Egypt, Sweden is also competing fiercely with Russian sawmills that made a comeback.

With about 1.2 million m3, Europe will export nearly the same amount of softwood lumber to China this year as in 2013. For the time being, the massive increase seen last year (when the export volume tripled) has stopped, but the growth potential is enormous. Approximately 40% of imported conifers are used in interior design.

For this year and the next, the “big four” of the European lumber countries have announced significant production increases. Germany plans to step up its output by 3%, Finland by 5%, and both Austria and Sweden have pledged 9%. By 2018, the greatest lumber consumption growth is predicted for the US (+36% to 94 million m3), with China growing at a much more modest rate.


South Korea’s demand for pellets has increased substantially in 2014, WRQ reported. During the first ten months, importation of wood pellets was five times higher than in 2013, reaching almost 1.5 million tonnes.

Pulpwood prices in Russia in dollar terms have come down to levels not seen in more than six years due to rouble weakness. Currently, both softwood and hardwood pulplog prices are lower in Russia than in any of the 17 other regions covered by the WRQ.

Byko-Lat is going to build a fourth planing line at its factory in Valmiera, Latvia. The planing capacity will increase by about 30%. The new production line will become operational during the third quarter of 2015. The main reason for the new line is to reduce delivery lead-times to the customers. “There have been some structural changes during the past years in the European timber reprocessing business and we see an opportunity in this sector”, says Sampsa Auvinen, CEO of Norvik Timber Industries. This site has planing and further processing facilities including impregnation, a window and door factory and a prefabricated house factory. Byko-Lat’s garden furniture production is located at the Cesis factory.

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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