Global Trends Review, December 16-22, 2013: construction volume to drop by 3% in Europe this year, to grow 0.9% in 2014

Euroconstruct forecasts a decline of 3% by comparison to the preceding year in European construction output to €1.3 billion, reports EUWID Wood. This estimation made at the end of November reflects a slight adjustment downwards from the estimation of -2.8% announced previously in June. With a view to anticipated developments in 2014 and 2015, the business research group is marginally more optimistic than in June. In 2014 and the two following years a revival in output is expected with growth rates of around 0.9%, 1.8% and 2.2%.

In the first ten months of the year, the German sawmill industry achieved accumulated sales of €3.57 billion – which is an increase of 3.5% over the same period last year, according to the Federal Statistical Office Destatis. October sales stood at €399.9 million, which is the second-best monthly result since May 2011.

National House-Building Council (UK) announced that November new home registrations increased by 20% which continues the strong and consistent volume growth witnessed throughout 2013, said NHBC commercial director Richard Tamayo. Private sector registrations during September-November grew by 28% to 25,079, while public sector registrations were up 37% to 9,277.

Strong demand is also returning to North America, prices are recovering again after a serious breakdown in the second quarter. The slow pace of business in the second quarter was mainly attributable to the stagnation that arose in the US new residential building segment after the busy spring and the ensuing slacker domestic demand for softwood lumber along with simultaneously regressive demand from China, EUWID says.

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Norske Skog has been granted $1.13 million from Innovation Norway for the establishment of a world-leading pilot plant for the development of microfibrillated cellulose (MFC) or nanocellulose as it is also called. MFC has several interesting applications, including as a new raw material in paper production and as a possible reinforcement of plastic. MFC has received much attention within forestry industrial research in recent years. Manufacture of MFC takes place using high pressure treatment of thermomechanical pulp (TMP).

Approximately 260,000 tonnes of wood-plastic composites (WPC) and about 80,000 tonnes of natural fibre composites (NFC) were made in Europe in 2012, according to a survey carried out for the first time by nova-Institut and Asta Eder Composite Consulting. WPC and NFC thus made up 10-15% of the European market for composite materials. In terms of the different product groups, the study found that decking made mainly using extrusion processes accounted for 67% of European WPC production in 2012. 23% involved manufacturing rear shelves, lining for luggage compartments and spare-tyre wells as well as interior door cladding for car interiors.

Swedish Wood’s international director Jan Soderlind in an interview to TTJ said that Sweden’s sawmillers did not want to jeopardise 150 years of successful timber supply to the UK, so the considerable export growth to China would not affect the British market. Volumes will rather move from North Africa to China, Soderlind explained. There is still a political risk in North Africa and the Middle East and the sawmills will balance that risk a little. “The UK is the number one market in Europe for Swedish sawmills and they will never risk that position or the Swedish domestic market,” he added.

Eco Brasil Florestas S.A. is looking for an investor to build a new eucalyptus pulp mill in the Brasilian state of Tocantins. The company intends to construct a new plant for the production of 1.5 million tonnes of bleached eucalyptus pulp within the next four to five years. Eco Brasil disposes of nearly 300,000 acres of land in the north of Tocantins, one third of which consists of eucalyptus plantations.

Egger Group (Austria) increased half-year sales in the period ending 31 October to €1.137 billion, EBITDA grew by 2% to €159 million on last year. The profit margin remained stable at 14%, the equity ratio improved from 35.3% to 38.6%. “Our improvements in sales and earnings are due partly to the increase in production at our OSB plant in Radauti, Romania, and partly to higher turnouts at our chipboard locations in Hexham/GB, Radauti and at the edge production plant Roma Plastik”, said Thomas Leissing, spokesman of the Egger Group management. Until the end of the year, the sales trends will remain the same, he added.

Pellet prices in Austria in December remained the same compared to November at €199.1/t, in Germany grew to €196.7/t (+0.5%), while in Switzerland increased to €219.5/t (+0.6%), Holzkurier journal reported. Year-on-year prices are somewhat lower. The supply on the market of Central Europe is quite stable, which makes price hikes unlikely in the near term.

Fordaq quotes that pellet price in Germany in December stands at €285.61/t. The German Energy Wood and Pellet Association (DEPV) estimates a total production of 2.3 million tonnes in Germany in 2013, which would mean a slight increase over the previous year. The country remains the second largest producer of pellets globally after the US. Global pellet production was estimated at 22 million tonnes in 2012.

Regarding consumption in the heating sector, Germany occupied the third place worldwide in 2012 with 1.7 million tonnes, behind Italy (2.5 million) and the US (2.3 million). The DEPV expects a rise up to 2 million tonnes in 2013 for German pellets usage in heat generation.

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