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WhatWood Global Trends Review Global Trends Review, November 03-16, 2014: Finnish sawmills scale down output as predicted; Chinese market outlook remains sluggish

Global Trends Review, November 03-16, 2014: Finnish sawmills scale down output as predicted; Chinese market outlook remains sluggish

23 November 2014 ` 18:18  

Due to the oversaturated lumber market, several Finnish sawmills reduce their outputs, Holzkurier wrote. Metsä Wood, Versowood, Stora Enso and Vapo Timber prepare prolonged winter vacation, temporary layoffs or short-time schedules. The favourable lumber export markets earlier this year have cooled considerably since the summer. Earlier at the International Softwood Conference speakers have already predicted winter downtimes.

Metsä Wood will also cease production at its Grangemouth plant in Scotland, but the site would continue to operate as a key distribution hub. The development is part of a strategic review of all the company’s operations within the UK in order to maximise efficiency across all products and departments.

UPM plans to take 800,000 t of publication paper (newsprint and supercalendered) capacity from the European market, EUWID Paper reported. The company will close down one machine each at the mills Chapelle Darblay in France, Shotton in the UK and Jämsänkoski and Kaukas in Finland. “We have achieved a turnaround in profitability during 2014. Nevertheless, the current operating rates are unacceptably low and the current economic environment is not promising tailwind for 2015. We plan to adapt our production to meet the profitable customer demand”, said Jussi Pesonen, President and CEO of UPM.


According to ITTO, timber traders in Hebei province of China are reporting the tropical redwood market is in crisis. Demand for redwood furniture has fallen sharply. Importers of redwood paid very high prices when demand was booming last year but now they cannot recover the costs and are stuck with high levels of capital tied up in timber that is difficult to sell.

Outlook for the forest product sector in China remains sluggish until the early or mid-2015 due to housing sector problems and slowing economy, Fordaq reported quoting International Forest Industries.

Inventories in China have not fallen enough to allow recent imported prices to cement themselves on the domestic market, which is resulting in buyers being very cautious about prospects over the coming months. The market is going to be very sensitive to supply levels over the balance of the year and into Q1 2015. Meanwhile, aggregate shipments from across the Pacific Rim are estimated at 76 ships leaving Pacific Rim log ports, down on 2014’s average of 96 vessels per month. This is a significant decrease with New Zealand and the US accounting for the majority of the logger demand fall off, IFI report concludes.

Within five years, a new timber port for international cargoes will be built in Caofeidian, Hebei Province of China, ITTO reported. This port will be one of three equipped for timber fumigation and will service customers in Northern provinces of China. RMB1.17 billion ($191 million) has been invested into a 30,000 tonne and two 50,000 tonne softwood berths, two 50,000 tonne hardwood berths, as well as one of the biggest timber trading platforms in North China. Currently, two 50,000 tonne berths are open to shipping and by the end of this year the terminal handling capacity is forecast to reach 5 million m3 per annum.

According to Holzkurier quoting specialists of Initiative Furnier + Natur (IFN), ever decreasing felling cycles lead to a progressive deterioration in timber quality. IFN chairman Axel Groh calls for enhancing the share of coloured hardwoods in natural forest habitats.

Japan’s Forestry Agency and land ministry announced a roadmap to produce an annual 500,000 m3 of cross-laminated timber by 2024 with the aim of promoting the use of wood in buildings of medium height (3-4 storeys), Fordaq reported. The government hopes to boost demand for lumber this way. Half a million m3 of CLT can be used to build 4,000 three-storey buildings. Presently, CLT costs more than concrete. However, the Japanese government plans to reduce the cost by mass production. It will also encourage the use of the timber by developing related building standards and supporting model projects.

The Baltic Course paper published the rating of top Latvian timber companies. Latvian State Forests was the leader in 2013 with a turnover of €182.65 million. It was followed by Latvijas Finieris (€131.69m), Kronospan Riga (€112.47m), Pata AB (€87.35m), Stora Enso Latvija (€49.86m), Billerudkorsnas Latvia (€48.56m), Metsä Forest Latvia (€43.18m), Vika Wood (€39.34m), Gaujas koks (€39.18m), and AKZ (€36.45m).

Energy supplier Eco Energy is building the world’s largest biomass power plant in Ghent, Belgium, as Holzkurier reported. It will have an electrical output of 215 MW and thermal output of 100 MW. The estimated investment cost amounts to €315 million. The plant will process wood chips and agricultural by-products. Start-up is scheduled for the end of 2017.

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

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