Global Trends Review, December 02-08, 2013: reports of UNECE, EU Flooring Association and German Pellet Institute published

The UN Economic Commission for Europe (UNECE) announced that the residential construction volume in Europe is expected to fall this year before a slight increase in 2014, TTJ reported. “While a short- or mid-term recovery is unlikely in Europe’s construction sector, the current focus on policies for reducing carbon emissions could lead to increased use of wood in construction,” the report says.

The UNECE figures show a large growth of forest product consumption and production in Turkey, which is by now Europe’s fourth largest consumer of softwood lumber and particleboard. This country is also the leader in European MDF production and consumption.

Much of the dialogue in the European wood flooring sector in recent years has focused on the rising tide of competition from Chinese manufacturers in their domestic markets. However, judging by recent reports from the industry association EPLF, there is a growing focus by European manufacturers seeking to capture a larger share of the Chinese market, ITTO reported.

Europe’s flooring manufacturers have recognised that their domestic markets are unlikely ever to recover the ground lost during the recession. Future opportunities for market development are now seen as heavily concentrated in other regions. China is seen as a particularly attractive target.

US market research organisation Catalina Research estimates that total flooring sales throughout China amounted to 3.9 billion m2 in 2011 and forecasts that demand for new floors will increase by 149 to 177 million m2 per year at least until 2025.

Several years ago laminate flooring began to be manufactured in China, which collapsed the market for European manufacturers. In 2012, China led the global laminate flooring production with 28%, Germany being the second with 27%.

However, the European manufacturers such as Pergo, Skema and Unilin are taking the Chinese market in turn: in 2012, exports from Europe to China restored to the level of 3 million m2. European manufacturers believe the high-end segment of the Chinese market offers particular potential for European-made quality laminate flooring.

As Raffaele Ferrara of Italian manufacturer Skema says, format are changing in China: “In addition to standard boards the Chinese market is slowly but steadily acquiring a taste for long board and tile formats.”

As the German Pellet Institute (DEPI) estimated, global production of pellets certified with ENplus quality seal will reach around 8.53 million tonnes per year by the end of 2013. In late 2012, this indicator stood at 5.35 million tonnes, which is 59% higher on-year; the growth rate had been 75% from 2011 to 2012. Eight certification applications are now being considered in the US and another ten in Eastern Europe, so this figure can be expected to grow further. Only approximately three years after its introduction, the ENplus certificate has established itself at the global level.

Sawlog prices in Q3 grew in almost all regions tracked quarterly by WRQ, except for Canada, Western US, Finland and Brazil. Pulpwood in Europe also appreciated in the 3Q/13 compared to the previous quarter.

Demand for pulp has picked up in all regions of the world with the biggest increases in Eastern Europe, Japan and North America, WRQ reported. Within five months, NBSK pulp prices increased 5%, while BHK pulp fell 6% at the same time, which is very unusual, as historically they followed each other.

Lumber prices in both the US and Canada have started to recover the past three months after the dramatic decline earlier in the spring this year when prices fell by close to 20%. Russian sawmills have increased shipments to practically all of their major markets, except for Egypt.

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Finnish plywood exports increased 7.2% to 461,000 m3 in the first half-year, as the Finnish Forest Industries Federation (FFIF) reported. Europe remained the leading destination for Finnish plywood with the total share of 90%. Major European export markets had mixed fortunes in the first half of the year.

The downward trend in Latvian plywood exports continued in Q3 2013, EUWID reported. Export volumes slipped 3.7% down to 183,300 m3, while export value declined by 3.4% to LVL 80.2 million.

Smartply company (UK) announced a substantial investment into its OSB mill, which will include an additional ContiRoll continuous press, plus new forming and finishing lines.

Record production levels of leading modified wood brand Accoya meant that the Arnhem plant (Netherlands, Accsys company) finally recorded positive EBITDA of €0.9 million in the six months ended September 30, compared to a loss of €0.5 million a year ago. UK Accoya sales from existing distributors grew by 77%, total company revenue increased 80% to €13.9 million.

The company expects to achieve overall profitability in the medium term. Accsys chairman Gordon Campbell said economies of scale from higher production volumes and price increases helped boost business.

The sawmill of Rhenus Midgard Forest Logistics in Nordenham, Germany, will be discontinuing operation on 31 December, following the fruitless search for a buyer. The last orders are being processed at the moment. The individual items of plant and machinery will then be up for sale as from 1 January. The sawmill’s principal item is a band saw unit supplied by Braun-Canali, with an appropriately-sized log carriage; the plant can handle trunks with a diameter of up to 2000 mm and a length of up to 11,500 mm.

Researchers from the Finnish Aalto University have found a way to convert pulp wood into textile fibres; this development has already been recognized as internationally relevant and has interested experts from different countries, since the global prospects of cotton and viscose are limited due to different reasons.

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