Global Trends Review, October 21-27, 2013: Softwood lumber industry forecast to rise in 2014, Russian lumber deliveries to UK to fall 10% this year

At the International Softwood Conference held from 14 to 18 October in Edinburgh, Scotland, the European Forest Institute (EFI) presented a forecast, according to which in 2014 softwood lumber output will rise by 2.9% to 109.13 million m3 in Europe and by 3.2% to 95.77 million m3 in North America. The pace of Canadian sawmill production might well slow from 7.5% this year to 2.6% in 2014.

The total volume of UK imported softwood this year is expected to be around 4.58 million m3 (2012: 4.76 million m3), with volumes falling from all the main producing countries except for Ireland, which is projected to see a 1.2% rise to 371,000m3, as TTJ reported.

Of the main countries, Russia is forecast to see its UK volumes dip the most – down 10.2% to 225,000 m3, with leading shipper Sweden falling 5.3%. Imports are predicted to rise to 4.66 million m3 in 2014, with all countries to see modest growth. Latvia’s UK softwood export growth will be the largest, rising 5.2%.

The 2.4% growth in domestic production to 3.44 million m3 will increase to 3.9% (3.58 million m3) in 2014, with exports remaining low at 130,000m3 in 2013 and 140,000m3 in 2014.

British Crown Timber Group has acquired the assets of the former Haminan Veistosaha (Havesa) sawmill in the port of Hamina, in the South-East of Finland. Stuart McIntyre, Chief Executive of Crown Timber, explained that the company has been Havesa’s largest customer for many years. “The equipment is ideal for producing our structural whitewood products and we feel that the timing of this deal, with initial signs of improving demand levels in the UK and Ireland becoming apparent, is good,” McIntyre concluded.

In January-August 2013, Germany exported 4.04 million m3 of lumber (–1.1%). China (+357% to 144,000 m3) and India (+104% to 128,000 m3) managed to offset a decline in deliveries to Austria, France and Netherlands.

After a slowdown in 2012, China’s expanding housing market has driven up its demand for logs and timber this year, and European sawmills are beginning to make their presence felt on the Chinese market. According to the Eurostat figures, in the first seven months of 2013, EU’s softwood logs exports to China more than tripled over the same period of 2012. Romania has the lead, with a share of 28% of all European exports by France (27,9%) and Lithuania (22,9%). Softwood lumber exports almost tripled as well, with Finland, Sweden and Germany accounting for 84% of the overall EU exports. Year-on-year, Finnish and Swedish softwood timber shipments to China increased three times, meanwhile those from Germany rose 304%.

***

Montes del Plata, a joint venture of Stora Enso and Arauco in Uruguay, rescheduled its start-up process for the 1Q 2014. The pulpmill project is well underway and its construction is 94% complete. At this moment, the main objective is to achieve perfect commissioning of the equipment, which is a key factor to ensure a successful start-up.

UPM unveiled its new business structure effective from 1 November 2013 which is to boost profitability through clearer business targets and simplified portfolio. As part of this programme, the company announced plans to reorganise its Finance & Control operations and to outsource recurring transactional tasks to an external company by the end of the second quarter of 2014. The employee consultation process is now closed and decisions were made accordingly. The number of personnel will decrease by 150 positions, of which 92 are in Finland and the rest in China and other countries.

Metsa Fibre will increase pricing for its Botnia Nordic Pine and Botnia Nordic Strong (NBSK pulp grades) in China by $40 per tonne, effective November 1. The new price of Botnia Nordic Pine is $750 per tonne and Botnia Nordic Strong $760 per tonne. The previous price hike was made on September 1.

Weyerhaeuser will soon produce JAS (Japanese Agricultural Standard) certified OSB material for exports to Japan at its Hudson Bay, Saskatchewan mill in Canada. OSB is used in Japan for both residential and commercial construction, as wall and roof sheathing and as structural flooring panels. The Hudson Bay mill will produce JAS-certified panels in standard sizes such as 910mm x 1820mm and 910mm x 2730mm to align with Japanese building practices, as well as custom sizes. Production according to JAS standards will begin in April 2014, with the first shipments arriving to Japan in May 2014.

In the third quarter of 2013, prices of sawlogs in Sweden decreased by 1% as compared to the same period of 2012, the Swedish Forest Agency reported. Prices decreased in Northern and Southern Sweden by 3% and 7%, meanwhile in the Central region they have increased by 4%. The prices for pulpwood declined 4% and 5% in the Northern and Central region, while in the South they remained stable.

Thermogen Industries intends to invest a total of $70 million by the end of 2014 in the building of a pellet plant for the manufacture of torrefied pellets at a site in Millinocket, Maine (USA). The company reports that the initial capacity of the plant, which will be located on the site of a former paper mill, will be roughly 100,000 tonnes per year and will be expanded in stages to produce 500,000 tonnes. According to company’s plans, pellet production will primarily be destined for exports to European energy producers who will use the pellets for co-firing.

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