Global Trends Review, July 14-27, 2014: Domestic market saves glulam industry in Germany; global woodworking machinery sales fell in 2013

Germany is lucky to have strong domestic sales market, which supports the laminated timber industry, as Holzkurier journal noted in an article. Austria, unlike Germany, has to export to the sharply declining sales markets like Italy or to the countries with extremely fluctuating demand like Japan.

Demand for glulam alone in Germany is supposed to be around 800,000 m3 per year, and it hasn’t suffered much from the crisis. This gives Germany the opportunity to do business easily without exports. From 2010 to Q1 2014, glulam exports to Italy fell down by 90%. The only large company which depends much on the Italian market is Nordlam.

Austria does not have such a strong home market and is forced to export glulam. Among three most important markets are Italy, Japan, and Germany. Austrian mills of Stora Enso are particularly large suppliers of laminated wood products to Japan.

Meanwhile, softwood lumber keeps getting more expensive in Germany, Holzkurier says quoting country’s Statistical Office. Since the beginning of the year, the curve of the producer price index has been trending up noticeably, and this June the on-year growth amounted to 3.4%. Other construction materials like raw iron or concrete have generally retained their price levels since the middle of last year.

Earlier reported growth of European lumber deliveries to Egypt seems to be the part of a new trend started in 2014, Fordaq noted. While in 2012 and 2013, EU sawmills targeted their exports mostly to Asia (especially to Japan and China), with the European and North African markets being on a constant decrease, now this trend has been reversed. In the first quarter, intra-EU softwood lumber trade expanded by 15%; EU exports to North Africa surged by 25%, with deliveries to Asia decreased by 3%.

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The global woodworking machinery producers recorded falling export sales last year, as the Italian Acimall association reported: Germany (€1.72 billion, -3.1%, but compensated with strong domestic sales), Italy (€1.11 billion, -3.1%), USA (€283 million, -7.5%), Austria (€355 million, -0.6%), and Taiwan (€457 million, -0.2%). Only China improved over 2012, with export at €790 million (+12.6%).

Among destination countries, the US were the biggest global customer and purchased equipment for a total value of €836 million (+12%). The second place was taken by Russia with €500 million, but Acimall notes a strong downsizing (-24.8%) at one of the liveliest markets in recent years, now facing a difficult geo-political situation and the weakness of the rouble rate. Germany has the third place (€397 million, +10.9%).

Out of Top-50 consuming countries, only 22 increased equipment purchases in 2013. The largest relative growth was registered in Turkey which firmly established at number eight (+14.8%, €167 million).

Lumber prices in U.S. are likely to rise by 30% by the end of this year, as Fordaq quotes London-based financial consultancy group Capital Economics. The main driver for this increase is primarily attributed to the very strong rebound of the U.S. housing sector, which is already happening and is expected to continue. Earlier this year, lumber prices in the US suffered from falling activity in China, as property investments in this country have declined significantly during recent months.

E-Pellets company has acquired the formerly closed Louisiana Pacific OSB mill in Georgia (US). The company plans to convert the mill into a 450,000-tonnes wood pellet plant. Products will be exported to the power plants in European Union. The company has a long-term port agreement with Georgia Kaolin Terminal which provides E-Pellets sufficient port capacity to export up to 1.35 million tonnes of pellets annually through the port facility in Savannah, Georgia. E-Pellets previously purchased another pellet plant in Georgia.

European particleboard production slipped 1.5% to approximately 28.4 million m3 last year, EUWID reported. However, MDF/HDF manufacturing increased 2.1% to 11.2 million m3. An even larger jump in OSB production was reported, which was up 6% at 3.7 million m3. Total wood-based panel output was marginally higher than the previous year at 43.3 million m3. These figures cover European Panel Federation member countries apart from Turkey and Russia. The EPF expects manufacturing of all three product groups to increase again this year. Particleboard output is projected to climb by around 1.5% to just below 29 million m3.

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