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WhatWood Global Trends Review Global Trends Review, October 28 – November 03, 2013: lumber market oversaturation in Japan to end in Q2 2014; companies publish Q3 results

Global Trends Review, October 28 – November 03, 2013: lumber market oversaturation in Japan to end in Q2 2014; companies publish Q3 results

7 November 2013 ` 03:14  

Scandinavian woodworking companies report improving market conditions, higher selling prices and lower raw material costs. Their North American colleagues also publish very positive results, despite lumber prices falling back from Q2, TTJ reported.

Setra’s UK sawn timber sales grew by 15% in the first nine months of 2013. Volumes to Algeria, Japan and China also rose sharply. UPM’s forest and timber division saw sales rise 9% to €397 million, while operating profits, excluding special items, was up to €8 million. UPM said its sawn timber sales mix was more favourable in Q3 compared to Q2; cost efficiency improved as a result of restructuring. Sawn timber production and deliveries decreased seasonally, while prices were stable. The plywood division’s sales grew 4% to €98 million.

Moelven published weaker results partly due to costs associated with commissioning a new mill, but company CEO Hans Rindal confirmed that the market balance for Moelven’s sawmills is improving.

Stora Enso’s Q3 results show a 154% improvement in EBIT. SCA Timber’s forest products division (solid wood, pulp and publication papers) recorded a 49% boost in operating profits to SEK 420 million. Solid wood product sales increased due to higher volumes, partly offset by lower prices.

For Nordic producers, strong national currencies still present a problem. That is the case for Holmen Timber which reported an operating loss of SEK 20 million.

As for North American companies, West Fraser Timber reported its lumber division sales growing to C$581 million from C$491 million a year ago. Lumber prices were down compared to the previous quarter, triggering the reimposition of Canadian softwood lumber export taxes to the US. Panel division earnings dropped due to lower plywood prices and higher logging and haulage costs.

Boise’s wood products division increased sales by 9% to $283.2 million, thanks to volume and price growth in the engineered wood products business. But lower plywood sales prices and higher wood fibre costs offset the gains.

Weyerhaeuser’s wood products division revenue was hit by a 26% decline in average OSB selling prices compared with Q2, while lumber selling prices fell 7%. The declines were partially offset by improved average selling prices for engineered wood products, higher sales volumes across all product lines and lower western log costs, company said.

Norbord recorded $27 million of earnings in the 3Q 2013 compared to $27 million in the same quarter last year and $53 million in the prior quarter. “I am pleased with our 3Q result in spite of the volatile OSB pricing we’ve experienced in North America this year,” said Barrie Shineton, President and CEO. “Prices have adjusted by 45% since the spring, yet even at today’s more moderate levels, we continue to generate attractive free cash flow. OSB prices bottomed in September and we are now seeing a gradual, positive improvement that I believe will continue into the fourth quarter.”

“In Europe, panel markets continued to strengthen, particularly OSB, and our plants are running at capacity. It is clear that the housing recovery is now well entrenched in our core UK and German markets,” Mr. Shineton added. The European division of Norbord recorded OSB and chipboard prices rises of 8% on a year ago. MDF prices improved by 4% compared to Q3, 2012.

EACOM Timber Corporation has recently announced the reopening of its Ear Falls sawmill in the second quarter of 2014 due to improvement on the softwood lumber market. With the help of Ministry for Natural Resources, the company managed to improve its long-term wood supply situation. Logging and third-party wood purchasing will start in Q1 2014 in order to build a sawlog inventory for the mill.


The generalised scheme of preferences (GSP) adopted in October 2012 by EU for developing countries will affect import duties on methanol from 1 January 2014. Shipments from Russia, Libya, Saudi-Arabia, Qatar, Bahrain, Oman, Venezuela, Brunei and Malaysia – all countries that make methanol – are affected, EUWID says. Duties on importing methanol from these countries will rise from 2% to 5.5% after they lose GSP status. Another methanol producer, Azerbaijan, will also cease to be eligible under GSP on 21 February 2014. Countries affected by the GSP changes can extend their GSP status for a year by entering into bilateral talks with the EU, meaning that the hike in import duties can be pushed back in individual cases. These ten countries account for approximately half of current methanol imports into the EU-28.

At the ISC conference held in Edinburgh, Christoph Kulterer, Chairman of the association for sawmills in Austria, and Dr. Carl-Erik Torgersen, chairman of the Austrian federal committee for timber trade, confirmed that Japanese market is now oversaturated with lumber, but in the second quarter of 2014, at the latest, the market will come back, Kulterer said.

In the MENA region, if a country is free from political uncertainties, the market is growing relatively fast, Torgersen said. This is what recently happened in Morocco. “Morocco will need more softwood lumber than Spain this year”, he explained. According to him, Austrian softwood lumber production will contract slightly this year, probably by 2% or even less.

Modified wood producer Fibre7 has signed a licensing agreement with Momentive Specialty Chemicals (MSC) Inc. for production of the material in North America. The landmark deal will see Fibre7’s Lignia brand of modified softwood produced outside New Zealand for the first time. “The combination of Fibre 7’s commercially viable impregnation process and our unique resin technology will create a successful partnership,” said Dale Plante, MSC’s forest products division president. UK-based Fibre7 is currently also working on a European licensing deal. Its product is modified through the densification of New Zealand radiata pine in a pressure impregnation treatment process.

The Dutch thermowood manufacturer Plato has been taken over from insolvency by Schipper Bosch. According to a notice issued on 26 September, Schipper Bosch will continue business trading as Plato Wood B.V. with most of the original workforce. The notice states that production at Plato was resumed directly after the takeover. Delivery to clients was also resumed.

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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