Global Trends Review, August 25 – September 07, 2014: Heavy fall of Japanese timber imports registered in Q2 2014; one more large EU pellet supplier will appear in the US

In the first half-year, Austria exported 3% less laminated wood products, which is 566,000 m3, Holzkurier reported. This decrease is primarily due to heavy losses in Japan. Exports to the Far Eastern market plunged by 38% to 80,500 m3. Losses were particularly well felt in the second quarter. All other sales markets were stable or even showed an uptrend in the first six months.

As Fordaq confirms, from January to May 2014, the European Union countries lumber shipments to Japan have significantly fallen. As Japan is currently expanding its own lumber production, its need for imports is proportionally decreasing. Already, the Japanese Forestry Agency has announced for this year a 5% increase in Japan’s lumber production. We can add also that consumption tax hike this April could additionally affect the Japanese market, as the construction volumes in the country have dipped.

In the first five months, softwood lumber export value from Europe to Japan fell by 30% year-on-year down to €283 million. Alone in May, deliveries have dropped by 40%, giving a bad signal for the upcoming period. Finnish and Swedish deliveries fell by around 20%; more significant decline was registered in Romanian and Austrian deliveries (41% and 42% respectively).

Holzindustrie Schweighofer, however, has announced completion of its new glulam beam line which will mainly ship products to Japan. In the framework of an investment project, the company has expanded its site in Radauti, Romania. Pellet production capacity was extended to 165,000 tonnes, the planing hall was enlarged, and a new 100,000 m3 glulam beam plant was installed, Fordaq quotes.

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American company Highland Pellets intends to start building its first pellet plant in October at its site in Pine Bluff, Arkansas, EUWID reported. The investment sum will amount roughly to $130 million. The plant with an annual production capacity of 500,000 tonnes will be probably commissioned in March 2016 and primarily produce industrial pellets for power plants in Great Britain. The company has already secured raw material supplies which will be mainly southern yellow pine in the form of sawings, wood chips and roundwood.

The United Kingdom is out of recession much faster than expected. Its economy will probably rise by 3% this year, a record in Europe, Fordaq says. In the British real estate market, the current situation is almost euphoric: prices increased by 11% in the first five months of the year. In the construction sector, it’s even better: 27% more housing starts as compared to the same period last year. It’s back to pre-crisis business.

As the Irish company Medite, part of the Coillte Panel Products group, noticed, wood consumption is riding this positive trend, and especially panels. The total consumption of wood-based panels is estimated to reach 4.5 million m3 in 2014.

Production and consumption of panels in the UK in 2013, thousand m3

Metsa Wood is going to adjust production in response to decreased demand at its Kerto LVL mills in Punkaharju and Lohja (Finland), and at its glulam mill in Hartola (Finland), the company said in a press release. Metsa says this decision comes after the prolonged and strong decline in the construction industry which continues in Finland and throughout Europe.

The company also says that the aim is to keep production curtailments to a minimum and they are planned to be implemented through temporary layoffs. At the Kerto LVL mills, the curtailments are scheduled to occur mainly by the end of January 2015 and their duration is two weeks at maximum. The curtailments at the glulam production are scheduled by the end of the first quarter of 2015 and their duration is 12 weeks at maximum.

German Pellets Group has increased its consolidated sales by 13% to €267.2 million in the first half of 2014. The company attributes this growth mainly to the commissioning of Woodville (Texas) plant. In parallel, the market for wood pellets in almost all Western European countries has grown despite the last warm winter.

The company also notes significantly lower raw material and energy costs in the United States as compared to Germany and Western Europe. “The preliminary financial results for the first half of 2014 show that our strategy to focus on the United States as the country of production, is correct and is therefore pursued consistently. The plant in Woodville (Texas) is stable. Now we focus on the completion of our second U.S. plant in Urania (Louisiana),” said Dr. Michael Walewski, company spokesman for German Pellets Group.

As of September 1, 2014, German Pellets also took over Munchenpellets, a family business in Munich, Germany. The company plans to expand its retail business in the metropolitan region of Munich through this acquisition.

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