Article archive

Investigation of padauk shipment from Congo to EU impacts prices

Posted on by GWMI Admin

In early July Belgian Customs blocked the release of a shipment of padouk sawnwood dispatched from Gabon. The Belgian authorities were warned that there was a risk that the importer of this shipment could not satisfy the EUTR and are currently assessing whether the Belgian importer satisfied the due diligence requirements of the EUTR.

This investigation and the fact that over the past months there have been large shipments of padauk to the EU, has had an impact on padauk sawnwood prices which fell to around euro 700-750 per cu.m from recent highs of over euro 1,100 per cu.m.
''Kevazingogate''
Back in February, the authorities seized 353 container-loads of kevazingo at two Chinese-owned depots at the Owendo port in the capital Libreville.
Some of the containers bore the stamp of the forestry ministry to give authenticity to their export.
The ensuing scandal, dubbed “kevazingogate”, has led to the government sacking the vice president, the forestry minister and several senior civil servants.
In a statement late Sunday, the environment ministry said that 125 of the 353 containers, amounting to 1,500 cubic metres (53,000 cubic feet) of kevazingo, had now been transferred out of the port.
The transfer to a designated timber store "aimed at converting this illegal timber into legal timber which is authorised for sale," it said.
This part of the haul will be "valuated and then sold (at auction) for state coffers," which could bring in 45 billion CFA francs ($76 million, 69 million euros), it said.
Logging is big money in the central African nation, which is almost 80 per cent covered by forests. The timber industry accounts for 17,000 jobs and 60 per cent of non-oil related GDP.
The new forestry minister appointed by President Ali Bongo is Lee White -- a British-born environmental campaigner who has lived for years in Gabon, battling to conserve its forests and wildlife.
Log Export Prices from Central/West Africa

West Africa logs, FOB € per m³
Asian market
LM
B
BC/C
Acajou/ Khaya/N’Gollon
265
265
 175
Ayous/Obéché/Wawa
250
250
225
Azobe & Ekki
275
275
175
Belli
280
280
–
Bibolo/Dibétou
215
215
Bilinga
275
275
 -
Iroko 350
350
250
Okoume (60% CI, 40% CE, 20% CS) (China only) 220 220 200
Moabi 365 365 -
Movingui 210
210
-
Niove
160
160
–
Okan
220
 200
–
Padouk
300
 280↓
230↓
Sapele 310 310 265
Sipo/Utile
325
 300
265
Tali 370 370
–

 
Sawnwood Export Prices

West Africa sawnwood, FOB
€ per m³
Ayous FAS GMS 440
Bilinga FAS GMS 540
Okoumé FAS GMS
460
Merchantable 310
Std/Btr GMS 340
Sipo FAS GMS
520
FAS fixed sizes 560
FAS scantlings 560
Padouk FAS GMS 720↓
FAS scantlings 850
Strips 650
Sapele FAS Spanish sizes 900
FAS scantlings 500
Iroko FAS GMS 520
Scantlings 640
Strips
720
Khaya FAS GMS
400
FAS fixed
480
Maobi FAS GMS
620
Scantlings
640
Movingui FAS GMS
420

Source: ITTO

Germany: June prices for wood products continued descending trend

Posted on by GWMI Admin

Producer prices for commercial wood products in Germany continued to decline in June. While there is a split picture compared to the previous year, in the short-term comparison only six figures are up on the previous month, four more unchanged, 16 in the minus.

In comparison to June 2018, 13 of the 26 values ​​show a positive development. Front runners are wooden window and door frames as well as beech and hardwood lumber with increases of between 3% and 4%. Continue reading "Germany: June prices for wood products continued descending trend"

Northern European wood pellet prices hit record high this summer

Posted on by GWMI Admin

Nordic wood pellet prices have risen to record highs amid stronger demand over the past month, but ample supply and signs of weakening buying interest will limit gains.

Continue reading "Northern European wood pellet prices hit record high this summer"

German exports of logs to China more than double this year

Posted on by GWMI Admin

In the January-May period, log imports to China from Russia declined 26.2 percent year-over-year to 3.6 million m3 with import value dropped by 27.2 percent to $439.8 million.

US log exports to China fell 39.5 percent to 1.6 million m3, export value decreased 44.6 percent to US$338.4 million. The share of Russia in Chinese log imports slid 4.97 percentage points to 14.3 percent and share of US dropped 4.16 percentage points to 6.5 percent, according to China Customs data.

From January through May, log imports to China from New Zealand expanded 15.4 percent to 7.4 million m3 with import value surged 13.2 percent to US$1.04 billion. Australian log exports to China jumped 29.9 percent to 2.5 million m3, while average price declined 18.5 percent to US$109 per m3.

Log exports from Germany to China soared 243.0 percent to 959.0 thousand m3, average price fell 39.8 percent to US$153 per m3.

Total Chinese log imports slid 0.59 percent to 24.9 million m3, while average price decreased 12.1 percent to US$169 per m3.

Vietnam replaces China as top supplier of hardwood plywood to the US

Posted on by GWMI Admin

US imports of hardwood plywood were down 5% in June, with decreases in volume from nearly all trading partners. Imports from China were down 21% in June and are behind last year’s volume by just under 90,000 cubic meters (51%) year to date.

Through the first half of the year, US imports are down 26% and, with the exception of Vietnam, imports from all major trading countries are down more than 10% year to date.

While down slightly in June, imports from Vietnam have increased more than 112,000 cubic meters year to date, up 109%, as the country has supplanted China to become the new top supplier of hardwood plywood to the U.S.

Imports of Chinese tropical veneers fall further

US imports of tropical hardwood veneer rose by 5% in June but remain at a level 30% below that of June 2018.

Year to date imports are down 21% as imports from China and Cameroon continue to plummet. Imports from China were down 32% in June and trail 2018 by 61% year to date. Imports from Cameroon were down 22% in June and are 65% behind 2019 year to date. Imports from India were up 31% in June and are ahead by 27% year to date.

US importers turn to Brazil for hardwood flooring

US imports of hardwood flooring fell by 18% in June, ending an extended stretch of growth. Despite the tumble, imports for June were nearly even with that of June 2018 and remain 15% ahead year to date. Imports from China continue to dwindle, down 47% in June and 48% year to date. Importers turned again to Brazil to make up the loss.

Imports from Brazil rose 33% in June and are up 123% year to date.

The story is much the same regarding Imports of assembled flooring panels. Imports were also down 18% in June but remain 11% ahead year to date. Imports from China were down 28% in June and are 23% behind year to date. But it is Vietnam that is gaining from China’s fall here. While down 30% in June, US imports from Vietnam are up by 179% year to date.

The 10 most important factors affecting the Chinese timber market today

Posted on by GWMI Admin

China’s economic downturn is impacting sales of wood products and under present market conditions there is growing over-capacity in the sector. Consumption of wood products has declined and supply exceeds demand.

Analysts suggest that mill capacity utilisation has fallen to only 50% in many plants. Much of the weakened demand is the result of lower housing starts brought on by tighter credit conditions. This is especially noticeable in the economically developed coastal areas such as Shandong, Jiangsu and Guangdong Povinces where house prices have fallen. Timber consumption has also been impacted by lower investment rural housing as many low cost housing projects have suffered budget cuts.

The most important factors currently affecting the Chinese timber market:

1. The economic downturn is obvious, overcapacity, and market demand is obviously insufficient; Continue reading "The 10 most important factors affecting the Chinese timber market today"

Sharp fall for Brazilian wood products exports in June 2019

Posted on by GWMI Admin

The value of Brazilian exports of wood-based products in June 2019 (excluding pulp and paper products) fell 12% year on year from US$263.4 million to US$230.6 million.

The value of June 2019 pine sawnwood exports dropped around 5% year on year (2018 June US$45.5 million and 2019 June US$43.4 million). In volume terms exports increased 11% from the same period in 2018 from 214,200 cu.m to 237,700 cu.m.

Tropical sawnwood exports also fell in June dropping 14% in volume, from 47,400 cu.m (June 2018) to 40,800 cu.m in June 2019. But in terms of value exports dropped almost 19% from US$19.1 million to US$ 15.5 million.

The downward trend in exports continued with pine plywood which recorded a 36% fall in the value of exports in June 2019 in comparison with June 2018, from US$60.8 million to US$38.7 million. Export volumes also fell but by a lesser amount dropping 10% from 173,700 cu.m in June 2018 to 155,700 cu.m this June.

The decline in exports was even more severe for tropical plywood as export volumes fell 39% and export values dropped a massive 46% from 11,600 cu.m (US$1.2 million) in June 2018 to 7,100 cu.m (US$ 2.8 million) in June 2019.

Adding to the bad news, wooden furniture export earnings fell from US$49.1 million in June 2018 to US$43.4 million in June 2019, an almost 12% decline.

New Zealand log exports to China up 27.2% in Q2/2019

Posted on by GWMI Admin

Log exports from New Zealand to China expanded 27.2% y-o-y in second quarter of 2019 to 4.7 million m3 with export value surged 20.3% to $524.6 million.

Share of China in New Zealand log exports gained 7.9 pp to 78.8%, according to Stats NZ.

Log exports from New Zealand to Korea rocketed 10.2% to 491.6 thousand m3, export value was up 11.8% to $54.2 million. Log exports to India soared 53.0% to 375.0 thousand m3 with export value jumped 53.4% to $42.5 million.

In second quarter of 2019, total log exports from New Zealand expanded 14.4% to 6.0 million m3, export value surged 8.9% to $666.1 million.

Timber exports to China: Russia and New Zealand at ”war”

Posted on by GWMI Admin

Russia is currently China's largest timber source. In 2018, Russian exports to China reached 15.65 million cubic meters, which is twice as much as in 2014! Despite the signs of weakness of China's timber market in 2018, the volume of Russian exports to China is still growing.

With the “Belt and Road” initiative, Russian wood has now easier access into major Chinese cities. With the continuous decline in the price of Russian timber and increase in Chinese demand, the import volume of Russian timber will continue to rise.

In the future, New Zealand's production will increase

In 2018, China imported 41.597 million cubic meters of coniferous logs, amounting to 5.786 billion US dollars, up 8.8% and 12.6% respectively. The main reason for the growth of coniferous logs was the significant increase in imports of New Zealand radiata pine logs. The quality is stable, and radiata pine is generally used in domestic construction and furniture applications. Continue reading "Timber exports to China: Russia and New Zealand at ”war”"

U.S. removes some Chinese furniture from planned 10% tariffs

Posted on by GWMI Admin

The Trump administration is sparing some Chinese-made household furniture  from its next rounds of 10% tariffs.

The U.S. Trade Representative's office released a complete list of the items that were removed from $300 billion in tariffs scheduled to go into effect on Sept. 1 and Dec. 15, some of which had already been hit with 25% tariffs.

Trump on Tuesday last week delayed more than half of the proposed tariffs until December, saying it would help shield businesses and consumers from the U.S.-China trade war fallout during the Christmas selling season.

The bulk of the items removed from the tariff list were furniture products, including wooden- and metal-framed chairs and those made of plastics. Some of these were previously hit with tariffs as part of broader furniture categories.

Baby-related furniture items also were spared, including toddler beds, bassinets, cradles, strollers and children's seats.

The $114 billion retail furniture industry has been among the sector's hardest hit with price increases due to Trump's tariffs, which rose to 25% in May.

Belarus to start producing wood pellets on a massive scale

Posted on by GWMI Admin

A program to build six pellet plants in Belarus is being implemented. All of them will be operational in H1 2020 and production is meant for export. The six pellet plants are only the first stage of the program, President Aleksandr Lukashenko stated.

Continue reading "Belarus to start producing wood pellets on a massive scale"

Value of British Columbia’s softwood lumber shipments to US in H1 plunges 25%

Posted on by GWMI Admin

The value of B.C. softwood shipments into the United States has plunged 25 per cent as American duties and lower-than-expected home construction south of the border reduce demand.

In the first half of this year, producers in British Columbia sent softwood worth $1.5-billion to the U.S., compared with $2billion in the same period last year, according to trade data compiled by the B.C. government.

The volume of lumber exports has also tumbled, with 6.9 million cubic metres of B.C. softwood sold into the U.S. in this year's first half, down 10 per cent from a year ago.

The slump in exports to Canada's largest trading partner underscores the tough times faced by B.C. lumber producers, including Canfor Corp. The company is the target of an unsolicited $981.7-million bid by Vancouver billionaire Jim Pattison to take it private.

The 90-year-old Mr. Pattison has a long history of investing for the long term and riding out the industry's downturns. Continue reading "Value of British Columbia’s softwood lumber shipments to US in H1 plunges 25%"

Sweden: Derome to acquire construction trade Woody Anderstorp

Posted on by GWMI Admin

Derome, Sweden’s largest family owned wood industry focused company, acquires Woody Anderstorp and joins the construction trade on January 1, 2020. The purchase price was not disclosed. 

Upon Derome’s entry, the construction trade will change its name to Derome and the range will be expanded with hardware. The plant will also turn to professional customers in the future. All employees are offered the opportunity to work and the customers automatically get an agreement with Derome.

According to the announcement, it is the starting point for Derome’s investment in Småland and follows a rapid geographical expansion along the entire coast from Bohuslän to Blekinge.

Woody Anderstorp was founded in 2012 by Per Enocson, Victor Svensson and Junic AB. With a focus on customer service and quality products, the development has been very fast. In 2019, sales are expected to amount to just over 50 million with 7 employees.

Woody Anderstorp is interesting for Derome, because of both the geographical location and the competence, focus and culture that exist at the company.

“This is the starting shot for Derome’s investment in Småland. Our goal is for the construction trade in Anderstorp to grow and we will also evaluate the opportunity to establish ourselves in more locations.

Smaland with its strong market is interesting for Derome. We are already a major supplier of roof trusses in the region and buy forest raw material from here to our sawmill in Kinnared. Therefore, it is natural for us to also establish construction and hardware trade in the region, says .

The construction trade in Anderstorp is a fine company. The owners run it with the same values ​​as Derome. They are down-to-earth and of high quality, they focus on professional customers and see as their main task to simplify customers’ everyday lives.”Johan Winroth, CEO of Derome Byggvaror & Träteknik

About Derome Group:

The company consists of two groups: the Industrial and Trading Group, Derome AB and the Property Group, Derome Förvaltning AB. The company has 4 sawmills with planing mill, finger joint and the manufacture of tongue and groove roofing boards; 2 impregnating plants; 5 roof truss factories (of which one is in Germany); 2 facilities for prefab production of house elements; 1 pellets factory; 1 briquette plant. The Derome Group has 1,400 employees and will have an estimated turnover of SEK 5.1 billion in 2016.

Conifex expects further reduction in lumber shipments

Posted on by GWMI Admin

Conifex Timber Inc. reported results for the second quarter ended June 30, 2019.

The company incurred net loss of $9.1 million or $0.19 per share in Q2, 2019. This compares with net income of $9.2 million or $0.35 per share in the second quarter of 2018. The revenues totaled $95.7 million, significantly lower by 31%, in comparison with the corresponding quarter last year. Conifex recorded operating loss of $19.1 million in the lumber segment. The segment operating results are inclusive of CV and AD duties expense of $2.5 million in Q2 this year. It must be noted that the company had expensed out $3.8 million in Q1 ’19 and $8.2 million in Q2 ’18 towards duties.

The lumber segment operating results were impacted by lower operating rates at its Fort St. James sawmill, El Dorado and Glenwood, Arkansas mills in the first half of 2019 and Mackenzie, BC mill in Q2 this year. The annualized run rate of Southern Yellow Pine (SYP) lumber by the U.S. mills recorded sharp decline from 418 million board feet in Q1 to 348 million board feet in Q2.

The shipments of Conifex produced lumber totaled approximately 149 million board feet, down by 5% from Q2 2018. Revenues from Conifex produced lumber represented a decline of 31% from second quarter 2018 to total $73.6 million. The unit log costs at its B.C. mills increased by over 19% from the corresponding quarter last year.

The company expects further reduction in lumber shipments. Also, lumber prices are expected to increase gradually through the remainder of 2019 and 2020.

Finnish sawmilling group Polkky to build 100,000 m3/year planing mill

Posted on by GWMI Admin

Pölkky Oy has announced the construction of a new planing mill in Taivalkoski, Finland. The new facility will have an annual capacity of over 100 000 m3.

Continue reading "Finnish sawmilling group Polkky to build 100,000 m3/year planing mill"

China: Reduced panel production causes prices to rise

Posted on by GWMI Admin

In order to improve air quality and the environment producers of woodbased panels in many cities in Shandong province will be closed or required to undertake refurbished to new environmental standards.

The number of enterprises stopping production is rising mainly because production costs have risen because the government has strengthened environmental standards and is applying these vigorously.

The impact on production costs of rising raw material costs is also a factor.

As mills close analysts write that it is expected that prices for panels will rise and some shortages are likely in the short-term.

US hardwood industry sees opportunities in the Indian market

Posted on by GWMI Admin

The market for American hardwoods in India is on its way to fulfil its true potential over the course of the next few years. For some time, anecdotal evidence has pointed to a genuine increase in interest from both Indian importers and manufacturers in bringing kiln-dried hardwood lumber from the United States to the market. However, there is now hard evidence in the export statistics to support this.

U.S. hardwood lumber shipments to India jump by 190%

According to the latest reports, the volume of U.S. hardwood lumber shipped to India during the first half of this year increased by over 190 per cent in volume to 1,661 cubic meters and by 102 per cent in value to USD 1.06 million. Over a third of the volume shipped during the period was accounted for by red oak, which was not shipped to India at all in 2018. The remainder was accounted for by a range of species, including hickory, walnut, white oak, ash, maple and cherry.

Aiming to leverage the growing demand in India and the need for alternative hardwood species, AHEC (The American Hardwood Export Council) has announced its participation at the upcoming MumbaiWood show, which will be held at the Bombay Exhibition Centre from October 17 - 19, 2019. AHEC has also announced plans to host a mini-convention in Jaipur in partnership with the Federation of Rajasthan Handicraft Exporters (FORHEX). This mini-convention follows a similar initiative undertaken earlier this year in Jodhpur and will include factory tours, a networking event and mini-convention from October 21 - 22, 2019. Testament to the interest in the Indian market, AHEC has already received confirmations from over 25 U.S.-based hardwood and veneer exporters, who are all keen to do business in the country.

“While exports of U.S. hardwood lumber to India remain relatively small in relation to the potential size of the market, there has been an undeniable leap in the volume of shipments so far this year. Looking ahead, it would seem that almost any American hardwood species may find a place in the Indian market, provided that it is both competitive in price and readily available in significant and consistent volumes. This is relevant, particularly for the oaks, which comprise close to half of the American hardwood forest resource,” said Roderick Wiles, AHEC Regional Director.

A genuine change in the Indian market

These numbers do not yet place India anywhere near the realms of major export markets for U.S. hardwoods, but they are a very obvious indication of a genuine change in the market structure. AHEC has been monitoring the development of modern and mechanised furniture manufacturing in India over the past few years and the indications are that more and more factories are investing in space, machinery and manpower, as the conditions for running a business become less bureaucratic and the market opportunity becomes more evident. Whether it is for export or for domestic consumption, there is no doubt that demand for furniture manufacturing in India is growing, which once again bodes well for American hardwoods.

“Given the developing opportunities in mind, AHEC has redoubled its efforts in India over the past two years or so, stepping up activities and focusing heavily on the wooden furniture and handicrafts sector in Rajasthan. Following a successful event in Jodhpur in March earlier this year, we are now looking forward to working with FORHEX for a similar event in October later this year. Our return to MumbaiWood also offers us a strategic platform from which we can interact with our intended target audience of timber importers, traders, furniture manufacturers, wood processing companies, as well as architects and interior designers. Our participation will allow us to share more knowledge on the wide array of American hardwood species and their significant potential for a range of applications,” concluded Wiles.

Conifex to indefinitely curtail its El Dorado sawmill; citing low lumber prices

Posted on by GWMI Admin

Conifex Timber Inc. announced that it is indefinitely curtailing operations at its El Dorado sawmill.   The curtailment is planned to be phased-in over the next 60 days.

Continue reading "Conifex to indefinitely curtail its El Dorado sawmill; citing low lumber prices"

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