Global Trends Review, November 04-10, 2013: panel capacities return to market; crossfire of duties between US & China

Pollmeier is expected to start up its new beech LVL factory in Germany in February 2014. The launch of sales is scheduled for March, says Holzkurier journal quoting company CEO Ralf Pollmeier. Major equipment is already installed. The investment volume has exceeded €100 million.

The line has a production capacity of 150-180 thousand m3 of high-strength beech laminated veneer lumber. The product price will range from €520 to €750/m3 (ex-works), depending on quality and dimension, the company said. The new product will be marketed as “Baubuche” (“construction beech”) in Germany and export markets.

At the same time, Kronospan finally announced officially that it is considering to resume operations at its particleboard mill in Bischweier (Baden-Wuerttemberg, Germany). The shutdown in 2010 was accounted for the poor economic situation which determined a collapse in orders. Rumours about reopening Bischweier were circulating in Central Europe for quite a long time.

Norbord company intends to start refurbishment of the continuous press line at the OSB plant in Huguley (Alabama, USA), at the beginning of 2014. The plant was shut down indefinitely in January 2009. This serves as a preparatory measure for the plant’s re-commissioning which is to be carried out during the course of the first half of 2015. However, no precise date has yet been fixed for production start; the final decision depends on future trends in the market

According to Norbord CEO Barry Shineton, the refurbishment of the Huguley plant will be a great deal more expensive than that carried out at the end of June at the plant in Jefferson (Texas, USA), which resumed operations at the end of June this year and which is now running at full capacity. The company currently assumes that the investment requirement for the Huguley plant will be around $45 million, while in Jefferson roughly $16 million was invested.

Crossfire of duties

Against the decision of the US Commerce Department, the US International Trade Commission (ITC) has determined that the US industry is neither materially injured nor threatened with material injury by reason of imports of hardwood plywood from China.

During 2013, the US Commerce Department had determined that hardwood plywood from China had been subsidized and sold in the United States at less than fair value.

However, according to the ITC press release as of November 5, 2013, no antidumping or countervailing duty orders will be issued with respect to imports of hardwood plywood from China. The decision is that there was insufficient proof of injury or threat to the US economy.

Meanwhile, China decided to impose anti-dumping duties on pulp imported from the US, Canada and Brazil. The preliminary ruling requires importers of the product to place deposits with Chinese customs ranging from 0.7% to 50.9% of the imports, depending on the dumping margin, the Commerce Ministry said in a statement.

The ministry said companies from the United States, Canada and Brazil had dumped cellulose pulp on the Chinese market and such imports caused substantial damage to the domestic industry. An anti-dumping probe was launched in February.

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Mondi Group announced 25% operating profit increase to €172 million for the third quarter ended 30 September 2013 (€138 million in 3Q 2012), the result of improved market conditions in Packaging Paper and the South Africa Division and the benefits from the acquisitions completed towards the end of 2012.

The recent increases in capacity in both France and Russia in the face of the on-going structural decline in demand in Western Europe and cyclically softer demand in Russia remain a concern. Benchmark prices at the end of the quarter were around €10 per tonne lower than at the close of the previous quarter. The business benefited from on-going cost management, particularly in the Russian forestry operations, with average wood costs continuing to decrease, the company said.

In an interview with the press, Peter Oswald, CEO of Mondi, described the subsidies for biomass combustion in Austria as “a real threat” to the paper mill in Frantschach, Holzkurier reported. Raw material costs in Austria are 20% above the EU average, he says. In Frantschach with an annual consumption of 1.2 million m3, this reduces profits by €15-20 million per year. In order to secure wood supplies for Frantschach, wood is imported from Romania or Bulgaria. Carinthia’s largest customer of timber sporadically even buys from Venezuela.

UPM and Canfor Pulp have agreed on a strategic sales and marketing cooperation. Beginning 1 January, 2014, UPM’s Pulp Sales network will represent and co-market Canfor Pulp in Europe and China while Canfor Pulp’s sales network will represent and co-market UPM Pulp in North America and Japan.

In the initial phase, the cooperation agreement will include 6 grades of market pulp and approximately 1 million tonnes of pulp sales from 8 mills on 3 continents. Both parties consider the agreement to be a significant strategic step.

“Canfor Pulp’s grades complement our current softwood and hardwood pulp range very well. The cooperation will also bring us access to new customers in new markets through Canfor’s established sales channels in North America and Japan,” said Tomas Wiklund, Vice President, Sales and Marketing, UPM Pulp Business.

The Japanese Forestry Agency disclosed that there are about 60 biomass generation projects in planning stage now. Total power output by those facilities is about 350 MW. Around 40 boilers will use the subsidy option from the Japanese government.

SCA announced that the company has completed its offer for the Chinese tissue manufacturer Vinda and is the majority shareholder with 59.95% of the shares. SCA owns now the third largest tissue company in China which is in turn the second largest tissue market globally. “SCA aims to develop collaboration with Vinda and utilize its extensive and robust distribution network,” says company CEO Jan Johansson.

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