Global Trends Review, June 16-29, 2014: New acquisitions and projects in the North American pellet industry; China blocks container shipping alliance

RWE Innogy is selling the largest operating US pellet factory, Georgia Biomass in Texas, as Holzkurier reported. The company is going to dispose of biomass assets as non-core business. The mill was launched in May 2011 and has a capacity of 750,000 tonnes annually. Pellet deliveries in the volume of 660,000 tonnes are contracted until 2019 to buyers from Europe, including Drax Group and RWE Supply and Trading.

Swiss company Alter Energy Group (AEG), an investor into renewable energy projects and companies, has signed a letter of intent to acquire an operating wood pellet factory in North Carolina, USA. The company plans to export 110,000 tonnes to EU markets for the upcoming heating season and increase capacity further to 280,000 tonnes during the 2015 summer off-season. AEG has also been active in the Ukrainian pellet industry. The company is involved with two operating pellet mils in western Ukraine and owns a biomass logistics and processing company in northern Ukraine, where the company also targets additional production.

Meanwhile, Canadian group Timberwest is planning to build a 200,000 t pellet factory on Vancouver Island, the final decision is to be made in the third quarter of this year, EUWID reported. In case of approval, the mill is scheduled for start-up in the second half of 2015. Branch and crown wood from forestry operations as well as residues from the surrounding sawmills are to be used as raw material for the factory.

The June 2014 price survey conducted by proPellets Austria resulted in an average price of €241.7 per tonne (for six-tonne purchases), Fordaq reported. As compared to the same month of last year, wood pellets are cheaper by 1.5%. Compared to May 2014, the price has increased by 0.2%. Thus, wood pellets price in Austria has stabilized after a continuous decline which started at the beginning of this year. From January through May the price has decreased by 9.4%. At the same time, in Germany, the average price of wood pellets stood at €248.69 per tonne in June, which is 6% lower year-on-year, and 0.7% lower than in May, according to the country’s pellet association.

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The Chinese authorities have surprisingly rejected the planned alliance of the world’s three major container shipping companies Maersk (Denmark), CMA CGM (France) and MSC (Switzerland) on June 17, as EUWID Wood reported. The preparations for the alliance which was to receive the name “P3” are discontinued. European and American regulatory bodies have already given their consent for the merger, and within the scope of P3, the three major ocean carriers intended to jointly use vessels and port capacities in China, Europe and the US. The market share of P3 on the Asia-Europe route would have amounted to 40%.

Holzindustrie Schweighofer CEO, Gerald Schweighofer, said in an interview to Fordaq portal that the company’s new Romanian sawmill will be situated somewhere between existing mills at Radauti and Sebes, and this will enable to redistribute log flows more effectively. “As Radauti is near the border we will increase imports from Poland, Ukraine and Russia to 2/3 of the needed logs”, he said. Logs for Sebes factory will be sourced from Bulgaria and Slovakia. Total imported amounts will rise to 1.2 million m3 per year, mostly pine, which is not available in Romania but needed for the further processing production. Also, imported pine is cheaper than Romanian domestic spruce, Schweighofer said.

According to Holzindustrie’s Chief Executive, there will be a great change for the wood cutting industry in Romania as it is in Western Europe. It will be very complicated for companies to be able to compete without further processing or for companies that are not operating on the local market and only sell low-grade timber to the Arabic countries.

Steico, who earlier announced construction of LVL factory in Poland, has placed an order with Raute for delivery of the complete plant, Holzkurier reported. The contract value amounts to approximately €23 million. Polish pine will be primarily used as a raw material for the production of LVL, harvested in the forests around Czarna Woda. Commissioning of the plant is scheduled for late 2015.

The German sawmilling industry posted a 14% rise in sales in the first quarter of 2014, however, the German Sawmill and Timber Industry Association (DeSH) says it is not a sustainable development, but mainly a result of favourable weather conditions which allowed for the early start of construction season. The roundwood supply at the beginning of the year was satisfactory, says DeSH.

After a 25% increase registered in 2013, Czech softwood logs exports have continued to surge in the first quarter – by 26% to €96.1 million year-on-year, Fordaq reported. Austria and Germany which are almost exclusive importers of Czech roundwood increased their deliveries by 15% and 41% respectively. The country occupies around one third of imported log softwood market in both countries.

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