Global Trends Review, March 24 – April 06, 2014: The year in Europe starts with growing construction; China bans logging in Heilongjiang

In January 2014 compared with January 2013, seasonally adjusted production in the construction sector increased by 8.8% in the euro area (EU18) and by 7.3% in the EU28, as Fordaq said quoting Eurostat. The highest increases in production in construction were registered in Slovenia (+42.8%), Spain (+17.6%), Hungary (+15.9%) and Germany (+14.1%), and the largest decreases in Portugal (-14.0%), Romania (-9.2%) and Italy (-7.9%).

Satisfactory demand on the British lumber market raised UK imports of rough-sawn and planed softwood lumber in the fourth quarter of 2013 by 29% year-on-year to 1.27 million m3, EUWID reported. Scandinavian and eastern European shippers also benefited from the effects of exchange rates in their lumber deliveries to the UK, as the British pound strengthened against Swedish krona and euro in the second half-year 2013. The share of EU countries in deliveries to United Kingdom left unchanged at 92%.

The British company SCA Timber Supply UK officially commissioned its new industrial planing mill in Melton on Humberside on 18 March, TTJ reported. Production had already started on one of the planing lines in November. The second line started up parallel to official commissioning. The two lines are capable to process 50,000 m3 of lumber per year.

Residential construction permits in Germany boosted 18% in January 2014 to 20,873 units, according to EUWID. Especially multifamily buildings with more than three apartments are in high demand. Last year, 270,000 homes were approved – a figure that had not been reached since 2003.

German softwood timber producers gathered at the Sawmill Congress to discuss industry prospects. As Holzkurier journal reported, it was said that further processing wood products with high added value and high quality timber construction is a perspective market, but high roundwood prices undermine industry competitiveness. Congress participants referred to Austria’s wood marketing platform proHolz as successful project. Timber share in construction reached almost 40% in Austria, while in Germany only every seventh house is built of wood.

Germany barely benefits from the Chinese market boom: although its exports to China actually increased five-fold to 247,000 m3 last year, that only accounts for 4% of the total quantity. “In China, spruce graded B/C is just not competitive at our price levels”, commented Jörn Kimmichof from Binderholz Deutschland. Within Europe, Sweden might emerge as a tough competitor for Germany on the export front. Because of the autumn storms in Sweden, roundwood supply is good even in the south of the country, as reported by EOS President and Vida Timber CEO Måns Johansson.

Europe’s most vibrant lumber market this year was England, said Norvik Timber CEO Sampsa Auvinen. There is a lot of construction going on in Greater London – even with cross-laminated panels.

According to ITTO, Iida Group Holdings, First Wood and Kawa i Ringyo companies will jointly build the largest Japanese LVL manufacturing plant in Aomori prefecture with total investment of about 8.4 billion yen (€59.6 million). The mill is going to process 120,000 m3 of logs into 60,000 m3 of LVL. Current LVL production in Japan amounts to only 70,000 m3. The plant will be completed in March 2015.

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The Heilongjiang province, located in north-east China, has officially banned commercial logging of its natural forests as of April 01, 2014, ITTO reported. “Excessive logging over long periods have sharply reduced forest resources and downgraded quality of state forests in the province”, said the chief of the state forestry administration, Zhao Shucong, at a press conference. Mr. Shucong added that in order “to protect the ecosystem and insure sustainable development of forests, it is urgent that commercial logging be stopped”. The Chinese government will support the local community affected by the logging ban by developing industries such as tourism and green agriculture. The ban applies only to natural forests.

China continues with anti-dumping measures on dissolving pulp imports from Brazil, Canada and the USA. The duties of up to 33.5% have become effective on April 6 and will last for the next five years. Anti-dumping duty rates for cellulose pulp imports from the USA range from 16.9% to 33.5%. Canadian companies are subject to rates ranging from 0% to 23.7%, while Brazilian companies will have to pay 6.8% to 11.5%. Canada’s Neucel Specialty Cellulose and Brazil’s Bahia Specialty Cellulose have been exempted from the ruling. The decision follows an anti-dumping investigation that was launched in February last year at the request of seven Chinese pulp companies. Specialty cellulose imports from the USA, Canada and Brazil have been subject to provisional anti-dumping tariffs since November 2013.

Finnish Forest Industries Federation (FFIF) member companies purchased in January and February a total of 6.3 million cubic metres of wood from Finland’s private forests, which is 25% more than in the same period of 2013, Fordaq reported. Purchases of logs amounted 2.9 million m3, while those of pulpwood 3.2 million m3. In January, pine and spruce logs were paid an average of €55-56 per cubic metre, birch logs prices were on average €41 per m3, pulpwood averaged to €16-17 per m3.

The average purchase prices of round timber in Latvia in the second half of 2013 as compared to the first half showed modest but stable increase, Statistics Latvia reported. In case of coniferous sawlogs, the increase made up 2% or €1-3/m3. The same increase happened for black alder and aspen, while birch sawlog purchase prices remained at €49-59/m3. The highest increase was in the birch plylog market: 9% or €6-8/m3.

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