Interview with Ruben Colin, CEO of GlobalPanels

GlobalPanels is a Mexican forest products trading company. WhatWood agency spoke to Ruben Colin, CEO of GlobalPanels, to learn about the main trends in the global forest industry markets, the impact of Covid-19, the specifics of working with Russian companies and much more.

Dear Ruben, please briefly introduce your company.

Our origins dated back to 1996, we have been thru a constant evolution process, we started buying and selling domestic products, handling people, stock, warehouses, etc. and now we are doing Global Trade, we are business developers, we represent, as agents, some of the most important Brands in our sector. We have two locations (only office), Mexico City and Vancouver Canada. We measure our impact and presence into the market not based in USD, we use better m³ per year, and we are around 55,000m³.

What is the main activity of your company?  

The main activity is the Trading, and as Traders we buy Globally, and we attend customers in North America, Central America and in Asia. We also offer our expertise in Logistics to our Markets. We offer Forest Products from what we call “non-common” origins at attractive prices, and we compete successfully against the common supply in the country of destination.

What are the main trends in the global timber industry markets in recent years you would indicate?

Based in Full Picture View, the volumes consumed YoY basis are growing, the demand Globally is showing a constant, everywhere the consumers are using more forest products. The advantage on lower Carbon emissions against common construction products (steel, concrete) plus the “cheap” prices, are very important characteristics playing in favor of all our industry. Markets like Mexican and some others must implement more strict controls in order to avoid illegal logging and in a few years Only Sustainable sourcing must be allowed.

How has the coronavirus pandemic affected the demand, consumption, prices of forest products in the world?

The Covid-19 showed us how easy the market conditions can be disrupted, there is a market before Covid and after Covid.  Prices skyrocketed everywhere, after 4-5 months last year (April-August) with almost no movements the demand is back and constant. Freights going Mars at insane levels are driving the delivered prices to an historical rate never seen before. Customers are begging for better prices but at the same time they know that the trend is driving this rocket. Prices in USA are back to prepandemic levels on Lumber, Panels (OSB, Plywood) are on bearish trend as well, Europe is different, for sure Price there will come down, When? and at what levels? No one knows. In my point of view, it will be until Q1 2022 when the price trend starts to change price direction.

How the coronavirus pandemic will affect the future trends in global forest products demand? 

The New Normality will drive this trend for a few months. Forest products are not the only ones affected, there is a long, long list of products seated in the same rocket. The biggest effect has already modified prices, future possible Covid waves will not impact into the same manner Our industry.

Why sawn timber prices skyrocketed in late 2020 – early 2021? When can we expect prices to go down and stay stable?

NO one expected that Covid increased dramatically the demand of any kind of forest products, this unexpected demand for DIY Globally, plus a shortage on Labor workers on every Sawmill/Plant around the Globe causes the perfect storm for a Sky-high price scale. Today the imbalance is getting on balance. Workers are back, New Lines are ready to offer more new supply, but the effect still around, as commented previously freights are a key factor increasing prices CFR even when in some Countries prices are going down on FOB Basis, as a perfect example of Globalization, US Lumber prices from an historic USD1,670.00msf on Early May 2021 are Now below USD600.00msf!!!, and Europe is not living the same, prices there are keeping the bull trend. Bearish trend will come in a few months.

How strong is the shortage of forest products in the world market now?

Being specific per products we offer, Brazilian Plywood to USA Market, the main problem is to find container space, MDF/OSB/CDX out of China, only one vessel a month is offering service by Break Bulk, service is not really accurate on dates but we are moving good volumes to Mexico, OSB from Europe, prices are at impossible levels for our markets, German Domestic market is pretty strong giving us no chance to get available volumes at attractive prices this year, Russian Birch Plywood, we are attending our customers with an order file of 3-4 month with restricted volumes, Russian SF 1-5 and C24 Planed lumber, we are facing a shortage due an unexpected Sawmill failure. In summary we are not really facing shortage, the problem is around insane container rates.

What volume of forest products do you purchase from Russia every month?

20 FEU per month on Edged Sawn Lumber, 10 FEU on Birch Plywood.

What suppliers from Russia do you work with?

Solomenksiy and UPM, and looking for more.

What features of working with Russian forest companies can you point out?

The Export Oriented ones speaks English with an all the time highly professional and commercial attention, they offer you CFR Prices, high quality products, and a very accurate production schedule.

What difficulties or advantages can you point out working with Russian suppliers?

I been looking for years the Russian Supply, after years of research and after a few trips, my goal is now a reality, I am buying from Russia, as Advantages I can list, enormous Forest, “Cheap” Log price in average, Some State-of-the-Art Sawmills and Plywood, PB, MDF, OSB Plants, some Export Oriented Mill near by Main Ports like SPB or Vladivostok. Difficulties, even in 2021 you can find a lot of What I call “old school” Sawmills with beautiful production but No English spoked, sometimes they take weeks to give you a reply by email with only FCA Prices at the Middle of Nowhere making logistics difficult, communication by phone is just impossible. Having EXIAR almost no mills want to work offering Credit by insurance to a foreign buyer. Credit by insurance is a tool heavily used in Export Oriented Countries like China. If Rusia is the New Superpower in Forest product, the proper use of EXIAR will explode exports.

How the global market faced the news that the Russian government introduced a ban on the export of coniferous and high-value roundwood from 2022, as well as a 10% duty on green lumber from July 2021? 

As a necessary movement, first to collect more duties and second to promote more Foreign Investments.  Investments will generate a better future for all the people living around (jobs and wealthiness). Russia controls more than a Quarter of the Total Forest Globally and as Mother Earth given advantage, the Forest must be protected, Is there to be used properly, sustainable harvested and oriented to generate benefits to all the People around as first and mandatory condition.