Global Trends Review, June 30 – July 13, 2014: US may soon utilize European CLT widely; PPI companies dispose of paper assets

There is hype around European-made cross-laminated timber in the United States, as Holzkurier journal wrote in an editorial article. Many agendas and initiatives have been set towards CLT in recent years. The White House officially supported “innovative timber construction methods”, while Idaho Forest Group announced a joint venture with Austrian CLT pioneer company KLH. There are now even lighthouses made of solid wood in North America.

Adventurous market forecasts say that the US market might absorb between 1.4 and 4.3 million m3 of CLT even next year (an equivalent to market share of 5-15%), but this is three to eight times as much as is produced in German-speaking countries, so the outlook is not viable.

Unlike in Europe, North American market is set towards high-rise CLT structures, as the higher the building becomes, the more economically feasible it is to use CLT instead of timber frame and concrete.

Growth in residential construction and loyalty of the government to wooden technologies will contribute to growth of CLT market in the US. Last year, the American Plywood Association published a production standard for CLT. Moreover, the American Wood Council intends to amend the construction standards in favour of timber.

For the US Pacific coast, another reason to use cross-laminated timber in construction is its seismic safety proven by tests in Japan, concludes the journal.

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Lecta’s subsidiary Torraspapel has concluded the negotiation process with employee representatives and will shut down its Sarrià de Ter plant near Girona, Spain, as EUWID reported. The paper mill will be gradually closed over the next few months and production transferred to other production sites, primarily to the Zaragoza and Motril paper mills (a second-hand paper line is to be launched soon in Zaragoza). The company quoted permanent drop in demand and legal changes in the power industry as major reasons. Torraspapel owns six mills in Spain. Sarrià de Ter makes 65,000 tonnes of base paper and woodfree uncoated paper and runs a 25-megawatt CHP.

Canadian group Cascades agreed to sell its fine paper assets to Rolland Enterprises Inc., a subsidiary of H.I.G. Capital, for $39.5 million. The transaction includes Rolland Division, an uncoated fine papers and security papers plant, CTC Converting Centre, a fine papers processing and distribution plant, and Fibres Breakey, a de-inked bleached kraft pulp manufacturing plant.

“Despite the positive contribution of these units to Cascades’ results, we have adopted a strategic orientation emphasizing growth in the packaging, tissue papers and recovery sectors,” said Cascades Chief Executive Mario Plourde.

Finnish Forest Industries Federation (FFIF) member companies purchased 16.9 million m3 of wood from Finland’s private forests in the first half of 2014. This is a 4% increase year-on-year. The pace of the business levelled off in June, however. Sawlog deliveries in the first half-year amounted to 7.6 million m3, while pulpwood ones – to 8.6 million m3.

In June, log prices were stable in Finland. Pulpwood prices fell by 1-2% as compared to May. Pine and spruce logs were paid an average of €55-56/m3, birch logs cost an average of €42/m3, while pulpwood average price was €16-17/m3.

According to Holzkurier quoting FFIF, Finnish export deliveries of sawn and planed softwood timber made up 2.5 million m3 in January-April 2014, which is 9% higher than a year ago. The largest buyers in Europe from January to April were France (+20%) and the UK (+1%), each with 236,000 m3. They were followed by Germany (186,000 m3; +10%) and the Netherlands (87,000 m3; +20%).

Outside Europe, Egypt (368,000 m3; +36%) was the number one market for Finnish sawn timber. Sales to Algeria grew 11% to 167,000 m3. Japan acquired 297,000 m3 – 16% less than a year ago. As WhatWood agency already reported, the problems with supplying Russian timber to Egypt were probably the main reason why Swedish and – as is clear now – Finnish deliveries to this country have surged so much in early 2014.

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