Article archive

Enviva buys 500,000 t/y wood pellets production facility from Portuguese company

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Navigator, the Portugese forest industrial company, will sell its pellets business, together with the 500,000 t/y pellets production facility Colombo Energy in Greenwood, South Carolina, to the joint venture between Enviva and the John Hancock Life Insurance Company, called Enviva JV Development Company, LLC.

In a statement, Navigator said that “faced with a financially attractive divestment opportunity”, it decided to “sell the pellet business and related assets, thereby freeing up capital.”. The sale is, however, subject to certain conditions and regulatory authorizations, and Navigator anticipates that “the process will be completed during the first half of 2018”.

At the end of 2014, Navigator decided to invest in a pellet plant in Greenwood, South Carolina, with a production capacity of 500,000 tonnes per year, which was completed in the second half of 2016. At the time, the still designated Portucel announced the investment of about 110 million dollars to build a pellet factory in the US state of South Carolina.

On the 2nd of January Enviva LC announced that its development subsidiary, Enviva Development Holdings, LLC, entered into a new joint venture, Enviva JV Development Company, LLC, with affiliates of The John Hancock Life Insurance Company to acquire, develop and construct wood pellet production plants and deep-water marine terminals in the Southeastern United States.

The new joint venture will be managed by Enviva and supported by the Hancock Renewable Energy Group, a unit of the Hancock Natural Resource Group (HREG). In addition, the new joint venture has agreed to acquire the above mentioned wood pellet production plant in Greenwood.

“We are very pleased to announce the extension of our development relationship with John Hancock and HREG. The new joint venture is expected to develop and construct new production plants and marine terminals required to serve the growing Asian and European markets,” said John Keppler, President and Chief Executive Officer of Enviva.

“As the plants and terminal assets contemplated in the joint venture become fully contracted and reach commercial operation, we expect to offer them to Enviva Partners, LP, providing additional visibility into the partnership’s potential drop-down inventory.”

Through their affiliates, Enviva and John Hancock will provide the capital to the new joint venture for  the acquisition of the Greenwood plant, as well as the planned development of a deep-water marine terminal at the Port of Pascagoula, Mississippi and at least two additional wood pellet production facilities, subject to certain terms and conditions.

The new joint venture expects to complete the production ramp and invest incremental capital in the Greenwood plant required to improve the operational efficiency and increase the production capacity of the facility.

The production of the Greenwood plant will be initially sold to Enviva Partners, LP  under a take-or-pay off-take contract and will continue to be exported from the Partnership’s deep-water marine terminal in Wilmington, North Carolina.

“The Greenwood plant is well-constructed, strategically located in a deep natural resource basin and has a strong manufacturing base to build on,” said Keppler. “Enviva is a proven acquirer and we are excited to bring this team into the Enviva family and to grow this plant into a world-class production facility. ”

The existing joint venture between affiliates of Enviva and John Hancock will retain ownership of Enviva Pellets Hamlet, LLC, the entity constructing a 600,000 metric tons per year production plant in Hamlet, North Carolina. Enviva expects the Hamlet plant to be operational in the first quarter of 2019. Production from the Hamlet plant is contracted to supply MGT Power’s Teesside Renewable Energy Plant, which currently is under construction in the United Kingdom.

Enviva Holdings, LP is the world’s largest producer of wood pellets, a renewable and sustainable energy source used to generate electricity and heat. Through its subsidiaries, Enviva Holdings, LP owns and operates plants in the Southeastern United States that produce nearly 3 million metric tons of wood pellets annually.

Lumber prices in the US keep up with growth trend

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The prices for framing lumber in the US continued to go up through the end of January. While long mill order files and transportation delays caused a greater focus on the secondary market, a slower pace was reported at Canadian S-P-F mills.
Prices posted uneven gains, while gains in the West were sharp and unrelenting, with some in the $40s and even $50s for the week. Warmer weather heated up Southern Pine sales, especially in Texas, and prices posted strong gains.

This Week
Jan 26		 Last Week
Jan 19		 Year Ago
2017
Random Lengths Framing Lumber Composite Price* $471 $458 $355
KD Western S-P-F #2&Btr 2x4 R/L Mill Price 510 502 311
KD Eastern S-P-F #1&2 2x4 R/L, delivered Great Lakes 589 582 400
Green Douglas Fir Std&Btr 2x4 R/L (Portland) 545 520 345
Southern Pine (Westside) #2 2x4 R/L 508 495 426
KD Coast Hem-Fir #2&Btr 2x4 R/L 525 515 355
Ponderosa Pine (Inland) #2&Btr 1x12 R/L 735 735 590
* Weighted average of 15 key items

Random Lengths Panel Market Report
Robust sales fueled sharp price hikes in structural panels. OSB buyers showed an increased sense of urgency as order files extended, and prices in all producing regions posted double-digit increases.
A scramble for coverage ensued in Southern Pine plywood amid depleted inventories and dwindling supplies of quicker shipments. Trading in western Fir plywood was steady from Tuesday on.
The ongoing strength surprised traders, who struggled to recall a January like this one.

(f.o.b. mill prices) This Week
Jan 26		 Last Week
Jan 19		 Year Ago
2017
Random Lengths Structural Panel Composite Price* $474 $454 $363
Southern (west-east) 15/32-inch 3-ply rated sheathing plywood 485-525 470-510 350-375
Southern (west-east) 15/32-inch 4-ply rated sheathing plywood 490-530 475-515 350-375
Western 1/2-inch 4-ply rated sheathing plywood 518 498 357
North Central 7/16-inch Oriented Strand Board 340 320 270
*Weighted average of 11 key items

Price of wood pellets in Austria increases by nearly 5% from 2017

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The average price of wood pellets in Austria has reached 241 € per tonne of wood pellets or 4.92 Cent per kWh in January 2018. 
The price increased by 4.8%, as compared to the same period last year and by 2.6% as compared to December 2017.
The cost advantage for wood pellets in Austria is currently 52.4% for extra light heating oil and 62.9% for natural gas.
At the moment, in Austria, wood pellets in bags cost an average of € 4.07  per 15 kg bag (when ordered by the pallet). This represents an increase of +4.2% as compared to the same month of 2017 and is +1.6% higher compared to the previous month.
Wood pellets usually have a seasonal price course in Austria. The cheapest prices are offered in the spring. On average, the cost of pellets during the storage campaign in April and May is between 5 and 10% below the autumn and winter costs.

Japanese government adapts the biomass subsidies as a response to demand growth

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Japanese regulators announced at the end of 2017 about plans to stop the issuance of set price Feed-in-Tariff (FiT) subsidies for most biomass power plants, while the Ministry of Economy Trade and Industry (METI) will offer a set amount (in MWs of capacity) of FiT contracts for suppliers as to bid on in a new tendering system.

The FiT subsidy was firstly introduced back in 2012 and the government has been receiving many responses to it. Starting September 2017, METI had already issued contracts for more than 16 GW of biomass capacity, far greater than the agency's target of 6-7 GW in 2030.

As reported by Canadian Biomass, METI has already taken the step of reducing the fixed FiT price for "general wood," which includes pellets, imported woodchips, and palm kernel shell (PKS), from 24 ¥/kWh to 21 ¥/kWh, starting in the fourth quarter of 2017.

Also, METI has estimated that the FiT contracts already issued would put a weight of 1.8 trillion yen ($16.2 billion) on electricity providers, and therefore ratepayers. Nevertheless, METI thinks that they have sufficient certified capacity under the FiT, and the new system will allow for more predictable budgets and the potential for cost reduction.

Still, the new system doesn't affect the capacity that has already been certified under the FiT at 24 or 21 ¥/kWh. The first round of bidding will take place in FY2018 (April 1, 2018 to March 31,2019), with a total pool of 200 MW of capacity available for tendering. The maximum bid price is set at the previous FiT level, 21 ¥/kWh.

Analysts project that the Japanese wood pellet demand will increase from 500,000 tonnes in 2017 to 9.5 million tonnes in 2025. Total biomass demand in Japan is expected to increase from 7.6 million tonnes in 2017 to 23 million tonnes in 2025.

Sawmills in Europe increase their market share in East Asia

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During the last few years softwood lumber import in Southeast Asia has increased dramatically with China as the top performer.

However, it is also many other countries in the region that have seen a rapid increase in imports, like South Korea, India and Pakistan. Softwood lumber imports from leading exporters in Europe (Russia included) and North America amounted to 3.5 million m³ during January-November 2017, which means an increase of 15% compared to previous year.

When we compare the figures during January-November with same period in 2016, we see that all countries increased the import. India (+38%) increased the most.

A higher lumber import from Europe is not only related to an increased domestic consumption in Asia, but also to a gain in market share. Europe (Russia included) has the largest market share in the Southeast Asian lumber market since 2013.

The trend line for the European share is increasing at a record high level for the region. While Europe has increased its share, Canada has lost market share. The market share for the U.S. is at a low level for the country.

 

Indian Rushil Decor commissions MDF production line from Siempelkamp

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The Indian wood-based materials manufacturer Rushil Decor buys the first Siempelkamp complete MDF plant in India.

With the new plant in Atchutapuram, the manufacturer will produce MDF from eucalyptus grown in plantations and from over mature mango trees. To meet local market needs Rushil Decor will significantly expand its pro-duction capacities above its current 3.5 million m².

The scope of work for Siempelkamp for this order includes the wood as well as fiber preparation system, the resin blending and application system, the fiber dryer and sifter, the forming line, an 8 ft. x 28.8 m ContiRoll press, the cooling and stacking line, the intermediate storage, the sanding line, and the cut-to-size line.

The press line will be equipped with the mat preheater ContiBooster. By preheating the mat before it enters the press it can be heated quicker inside the ContiRoll press resulting in produc-tion increases of up to 20%.With the new MDF plant Rushil Decor will increase its daily production capacities by 760 cubic meters.

The start of delivery is scheduled for the last quarter of 2018; the startup of the plant is scheduled for the 4Q 2019.Rushil Decor Limited is one of the largest Indian manufacturers for wood-based panels.

Chinese wood processing factories from Taicang forced to close

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Once that China has taken a zero tolerance policy on pollution, wood processing factories in Taicang City were forced to close.

An official notice dated Dec 20, 2017, stated that all factories must cease production immediately and must relocate by January 20 this year.

Log imports through Xiamen Port totalled 1.905 million cubic metres valued at US$46 million in 2017, up 10 per cent in volume and 11 per cent in value compared to 2016, according to the Xiamen Entry-Exit Inspection and Quarantine Bureau.

The imported logs were from 37 countries with New Zealand, Australia, USA and Estonia topping the list in volume terms. Imports from New Zealand totalled 962,000 cubic metres valued at US$130 million. It accounted for over 50 per cent of the total volume and total value of imports through Xiamen Port.

The volume and value of imported logs from Estonia rose 103 per cent and 138 per cent respectively in 2017. Estonian goods were valued at US$9.42 million of which 98 per cent were logs.

Log species include Radiata pine, spruce, Scots pine, Ponderosa pine and Loblolly pine, with Radiata pine accounting for over 70 per cent of all softwood logs.

India: Latest prices for imported wood products

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The price list for teak, sawnwood and plywood between 1-15 January, 2018.
Plantation teak prices

US$ per cu.m C&F
Angola logs 389-574
Belize logs 350-400
Benin logs 290-714
Benin sawn 530-872
Brazil logs 344-540
Brazil squares 333-556
Cameroon logs 405-616
Colombia logs 478-743
Congo D. R. logs 450-761
Costa Rica logs 357-780
Côte d'Ivoire logs 289-756
Ecuador squares 333-454
El-Salvador logs 320-732
Ghana logs 294-452
Guatemala logs 324-646
Guyana logs 300-450
Kenya logs 515-876
Laos logs 300-605
Liberia logs 265-460
Malaysian logs 225-516
Mexican logs 295-808
Nicaragua logs 402-505
Panama logs 335-475
PNG logs 443-575
Sudan logs 358-556
Tanzania, teak, sawn 307-613
Thailand logs 511-700
Togo logs 334-590
Trinidad and Tobago logs 603-753
Uganda logs 411-623
Uganda Teak sawn 680-900
Price range depends mainly on length and cross section

Prices for locally sawn imported hardwoods
Prices for imported hardwoods remain as reported at the end of 2017. Traders report that demand is strengthening as imported hardwoods are now competing effectively with imported teak where log sizes are becoming smaller and the overall quality is deteriorating.

Sawnwood, (Ex-mill) (AD) Rs. per ft3
Merbau
 3200-3500
Balau
 2000-2100
Resak
 1350-1550
Kapur
 1750-1850
Kempas
 1250-1400
Red Meranti
 1100-1200
Radiata pine AD
 600-700
Whitewood
 650-750
Price range depends mainly on length and cross section

Myanmar teak prices
Traders say the availability of sawn teak from Myanmar is satisfactory but that sales are limited to a special category of conservative buyers as more end-users are opting for other hardwoods which are available at much lower prices.

Sawnwood (Ex-mill) Rs. per ft3
Myanmar Teak (AD)
Export Grade F.E.Q.
 9000-16000
Plantation Teak A grade
 7000-8000
Plantation Teak B grade
 5000-6000
Plantation Teak FAS grade
 3500-4000
Price variations depend mainly on length and cross section.

Prices for imported sawnwood
Prices for imported sawnwood (KD 12%) remain unchanged.

Sawnwood, (Ex-warehouse) (KD) Rs per ft3
Beech 1350-1450
Sycamore 1500-1650
Red oak 1600-1750
White Oak 2200-2250
American Walnut 4250-4500
Hemlock clear grade 1200-1400
Hemlock AB grade 1200-1250
Western Red Cedar 1850-2000
Douglas Fir 1550-1750
Price variations depend mainly on length and cross section.

Prices for WBP marine grade manufactured by domestic mills
 

Plywood, Rs per sq.ft
Ex-warehouse. (MR Quality)
4 mm 50
6 mm 67
9 mm 85
12 mm 105
15 mm 140
18 mm 147

Domestic ex-warehouse prices for locally manufactured MR plywood

Locally Manufactured
Plywood “Commercial
Grade”		 Rs per sq.ft
Rubberwood Hardwood
4mm Rs.25.0 Rs.37
6mm Rs.37.75 Rs.48
8mm Rs.48 Rs.58
12mm Rs.58 Rs.69.5
15mm Rs.70.5 Rs.84.25
19mm RS.80.25 Rs.95
5mm Flexible ply Rs.50

Source: ITTO

European Parliament confirms and supports the stability for solid biomass use

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During the plenary from the 17th January 2018, the European Parliament confirmed the the strategy adopted by the ENVI committee (European Parliament's Committee on Environment, Public Health and Food Safety).

Also, the European Parliament further said that to ensure the stability of solid bioenergy in the next 10 years is a main concern and should be treated as such. Thus, the approach of the Commission wasn't only confirmed, but it was also improved as to guarantee full guarantee sustainability of bioenergy which will be consumed in the EU countries during 2021-2030.

As reported by the European Biomass Association (AEBIOM), this strategy is set to ensure that the wood biomass will contribute to CO2 emissions savings, in comparison to fossil fuels, and that it comes from sustainably managed forests, thanks to the risk assessment process.

“This approach will allow solid biomass to keep playing a key role in the European energy transition while providing coherent and realistic sustainability safeguards. Regardless, the bioenergy sector will have to remain cautious in trilogue on critical attempts such as cascading principle,” confirmed Jean-Marc Jossart, AEBIOM Secretary-General.

The next step will be for the Council of Europe to offer their vote. But the European Parliament's approach is generally in accordance with the position of the Council and the Commission. AEBIOM is now confident that a smooth and coherent trilogue process will take place on this specific bioenergy sustainability act.

In a open letter sent last week by 650 scientists, they warned against using round wood in the first instance for energy purposes, so this adds up to attacks on the energetic use of biomass. Also, before Christmas 2017, he non-governmental organization Birdlife had criticized the draft of the environmental committee, the negotiators had failed to ban the energetic use of stumps and trunks.

 

New Zealand log prices set new record on booming Chinese demand

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Export log prices in New Zealand reached new record in January 2018, boosted by continued strong demand from China, a weaker currency and historically low shipping rates.
As reported by WoodWeek, the price for A-Grade export logs reached $129 a tonne, up from $128 a tonne last month, and $127 a tonne the month earlier, marking the highest level since 2008.
AgriHQ began collecting the data in 2008, according to the agricultural market specialist's monthly survey of exporters, forest owners and saw millers.
All of the main log grades tracked by AgriHQ, he agricultural market specialist's monthly survey of exporters, forest owners and saw millers, either held steady or lifted as much as $2 a tonne on the previous month.
China is growing its demand for New Zealand logs, due to the fact that it clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market. Analysts say that the Chinese demand for New Zealand logs will keep steady until the Chinese New Year in February next year.
"Strong and constant demand out of China is the main factor which has pulled wharfgate log prices to record levels," said AgriHQ analyst Reece Brick. "A weaker local currency, which had been trading around seven-month lows against the US dollar for most of November and early December, as well as historically low shipping rates had also supported wharfgate log values," he said.
Brick noted that the main issue for the export market at the moment is shipping logistics, with massive volumes of logs heading to the export market creating congestion at ports. Beyond China, export markets have had mixed fortunes, he added.
In the New Zealand domestic market, trading continued at essentially the same level as a month ago, though some higher prices were reported, he said. This put the national average for structural logs at $129 a tonne, pruned logs at $182 a tonne and roundwood at $97 a tonne, according to WoodWeek.
"Strong housing construction rates continue to underpin wider demand for timber from mills - a situation which is set to remain the norm for at least the medium term," Brick said.
Mills have benefited from consistent wood flows in recent weeks, as dry weather conditions halted any previous disruptions to harvesting, he said.
"All signals point to stable-to-firming domestic log prices through Q1 next year," he said.
Brick added that rising wharfgate prices over the past 18 months have forced mills to be more price competitive and more mills are battling to make a profit margin, even with strong end-user demand for processed wood.
"Although short-term cash flow is an issue, part of the concern is the mills' inability to invest in new technology," Brick said. "Many are unable to front the cash to invest in more efficient machinery that would allow them to make larger margins on logs. This calls into question the longevity of these mills, especially if there’s no reprieve in competition from overseas traders."

Bergs Timber to acquire Norvik Timber Industries

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Bergs Timber AB has signed a letter of intent on the 22nd of January with Bergs Timber’s main owner, Icelandic Norvik, for the acquisition of a number of companies within Norvik Timber Industries with operations in Latvia, Estonia and the United Kingdom.

Thus, Bergs Timber intends to acquire Norvik Timber Industries’ operations in Latvia, Estonia and the UK. The respective companies have generated net sales of approximately SEK 1,613 million and a profit after tax amounting to SEK 78 million during financial year 2016/2017.

The payment will be made with 170 million newly issued shares in Bergs Timber, as well as a cash payment of SEK 270 million. Moreover, the company assesses that this acquisition will increase Bergs Timber’s earnings per share, along with opening new possibilities for synergies within areas such as raw material procurement, distribution and sales.

Norvik, Bergs Timber’s largest shareholder, owns the companies, along with 29.52% of the shares and votes in Bergs Timber. Once with this acquisition, Norvik is expected to reach a holding of 64.68% in Bergs Timber.

 “Since the sale of Broakulla to Bergs Timber we have been a large shareholder in the company. We are confident that this transaction is the right way to further develop our companies, not least due to our and Bergs Timber’s management’s shared view of the importance of decentralized responsibility and the use of current existing brands”, says Jon Helgi Gudmundsson, Chairman of the board of Norvik hf.

“We are pleased with the opportunity to acquire NTI which is a well-managed company with good profitability and great potential for development. A broadened and more large-scaled business enables economies of scale and synergies that lead to increased competitiveness and long-term profitability”, says Lars Gustafsson, Chairman of the board of Bergs Timber.

The companies to be bought operate within three areas: production of sawn timber products, wood processing as well as port- and distribution operations. The production of sawn timber products takes place at a modern, larger plant in Latvia (Vika Wood) with an annual output of 270,000 m3 and at two smaller plants in Estonia with a total output of 120,000 m3.

The wood processing business (Byko-Lat) is located in two regions in Latvia where production of planed products for construction purposes, windows and doors, modular houses as well as joinery products for gardening purposes takes place. Most of Byko-Lat’s raw material procurement is from the two Estonian sawmills as well as from two Russian sawmills operated within a part of Norvik Timber Industries which is not subject to the intended acquisition. Byko-Lat’s products are sold to a large extent to Western European markets, including the Baltics.

The port business (Norvik Shipping) is located east of London and includes handling of forest industry products, steel and other goods. The business also includes the operation of a ship. Within its own port area NTI also operates a distribution business (Continental Wood Product or CWP) for the import and sales of sawn timber products and processed products in the English market.

Synergies also exist within the distribution area. The sawmill Vika is well established on the large Japanese market, which also may give rise to further sales opportunities for Bergs Timber’s Swedish products. Similarly, conditions exist for Bergs Timber to more clearly introduce Byko-Lat’s products on the Swedish construction retail market. Not only within sales, but also logistics synergies and opportunities exist within the European supply chains of the group.

Egger to expand production capacities at St. Johann mill

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Egger invests in a new short-cycle press at its St. Johann mill in Austria. With the new equipment, the company plans to expand its production capacities to meet the constantly growing demand of its benchmark products with synchronized pore structures. 

The commissioned press is scheduled to be installed at the Egger headquarters in St. Johann starting in August of 2018; the startup is expected for December 2018.

According to the announcement, the company placed an order for KT700 machine with Siempelkamp. With a specific pressure of up to 700 N/cm², the KT700 can economically manufacture such innovative products as synchronized pore panels with decors that have a natural-looking embossed wood grain structure.

Due to its multi-piston design the KT700 reduces the pressure-less exposure time to only 0.8 seconds, an absolute peak figure for laminating press technology customary in the market. The press closes with a maximum speed of 760 mm/s; a total of 180 press cycles per hour are possible. Thanks to 40 press cylinders, the pressing force of 700 N is applied homogenously over the entire press area.

In 1H of FY2017/2018 Egger increased EBITDA margin to 16.8%.

Earlier, Egger took over the retail network Masisa Placacentro in Argentina, Uruguay and Paraguay.

The company is one of the leading European groups in the wood-based material industry. Started its story in 1961 with commissioning of the  chipboard plant in St. Johann (Austria), now production plants are located all across the Europe including CIS states. The EGGER Group has 9,000 employees, sales in 2016/17 financial year accounted EUR 2.38 Bn.

Segezha Group to start construction of two plywood plants in Russia this year

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Segezha Group will start construction of two plywood plants in 2018. According to the announcement, the projects will be executed in the Vologda and Kostroma regions of Russia.

Sokol plywood plant in the Vologda region will have designed production capacity of 78 thousand m3 of longitudinal and 52 thousand m3 of transverse birch plywood

The plywood plant in the Kostroma region will produce 130,000 m3 of high-quality plywood per year Earlier Segezha’s Vyatsky Plywood Mill expansion was included to the priority list of the Ministry of Industry and Trade in Russia

About Segezha Group:

The company is one of the largest Russian forest industry holdings with the vertically integrated structure and a full cycle of logging and added-value wood processing. The holding comprises Russian and European enterprises in the forest, wood processing and pulp and paper industries, as well as paper packaging. Segezha is ranked: No. 1 in Russia (52%) and No, 2 in Europe (16,5%) for paper sack production, No. 1 in Russia (71%) and No. 4 in Europe in terms of high-quality unbleached sack paper production , No. 5 in Russia and the world’s No. 7 for large-sized birch plywood production, No. 1 in Russia for sawn timber production – 904 thousand cubic meters per year, and No. 1 in Russia for glulam house sets – the volume stands at 25,5 thousand cubic meters per year.

Titan Group grew its timber harvesting in Russia to 2.2 million m3 in 2017

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Titan group of companies informed that in January-December 2017, the timber enterprises of the holding harvested 2.2 million m3 of timber (by 69.3 thousand m3 more than in 2016).

Shipping of timber in the mentioned period totaled 2.03 million m3. The indications are respectively by 12.2% higher and equal to the same period of 2016.

In December, the company harvested 215.6 thousand m3 of timber and shipped 274.1 thousand m3 . Earlier, Titan Group’s Lesozavod 25 completed 1st investment project phase in Russia.

The company is a diversified holding, which unites around 20 companies, located in Arkhangelsk and other regions of Russia. It is mostly focused on wood production and processing. Titan is a general contractor for timber supplies to Arkhangelsk Pulp and Paper Mill.

Parquet market in Europe keeps progress at moderate pace

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Consumption figures for parquet in Europe keeps increasing for the third year in a row. During 2016, the consumption progressed by 1.7%, while a modest grow of close to 1% is forecast for 2017.

According to the first estimates of the European Federation of the Parquet Industry (FEP) for the
year 2017, his rather moderate progression is mainly a result of a slight decline of parquet consumption, observed in Germany, the biggest European market for parquet, and Switzerland.

This prognosis is based on information received from member country and company
representatives present at the recent Board meeting held at the DOMOTEX fair in Hannover. It
should be seen as a first estimate subject to variations, in anticipation of the consolidated results to
be presented at FEP’s annual General Assembly next June in Sorrento, Italy.

On the contrary, all other countries are benefiting from the improvement of the general economic context, especially from the growth of the European consumption, and of the positive trends reported by the construction sector.

At country level, Poland, The Netherlands, Belgium and Sweden are experiencing the highest growths
of parquet consumption, followed by the Czech Republic, Austria and France. Parquet consumption in
the Southern European markets such as Italy and Spain is also progressing though to a lesser extent.

The political situation in Spain and the coming elections in Italy are somewhat limiting the positive
developments already observed last year. Finally, the Nordic market (Denmark, Finland and Norway)
remains stable after years of turbulences.

Although the issue seems less acute than in the previous years, the captains of the parquet industry
report difficulties in wood procurement, particularly for oak. FEP regrets to notice limitations to wood
market access in Russia, Belarus and, especially Ukraine, which has a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, and Croatia, which is part of the EU28 and its Internal Market.

The FEP Board of Directors also underlines the tough competition from “wood look flooring
substitutes” and the widespread misuse of the PARQUET denomination which is causing a growing and unjust confusion at consumer level.

Timber export prices in Japan likely to hit 40-year high on Chinese demand

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The export value for timber products in Japan will, most likely, reach the highest peaks in the last 4 decades. The industrial demand has provided an outlet for producers hit by a shrinking domestic housing market.

Full-year figures will likely reach nearly 32 billion yen ($288 million), up more than 30% from 2016, even if the December count stays flat year-on-year at 2.4 billion yen. Exports for January-November jumped 37% from the previous year to 29.2 billion yen, according to the Japan Wood-Products Export Association. The total 2016 tally of 23.8 billion yen was already beaten by the end of September, Nikkei Asian Review reported.

The export total for 2017 is likely to reach one-tenth of Japan's wood production by value last year. While logs comprised the greatest proportion at 42% of exported products, sawn timber made up 17%. Also, the export prices have risen. Including freight fees, sugi cedar bound for China fetches about $130 to $135 per cubic meter, up about $10 from the summer.

China was the biggest recipient by value, taking in about 40%. Demand thrived for logs, especially sugi. The wood apparently went into products like planks and pallets for transporting industrial goods, as well as packing crates for items including electrical appliances, according to Nikkei Asian Review.

This growth comes as "Japanese timber is relatively inexpensive at a time when prices worldwide are spiking," says a source at a sawmill operator in northeastern Japan. Products from the country are cheaper by several percent than those from New Zealand, a fierce competitor in areas such as crating materials.

The timber prices in Japan have kept a steady level, with a stable balance of supply and demand. Yet, the prices for wood from North America or the southern Pacific, for example, have been on the rise, due in part to expanding demand in the US and strengthening environmental regulations.

Fragrant hinoki cypress has grown popular among health-minded South Koreans. Shipments of sugi products to the U.S. for use in home fencing appear to be growing as well.

As Nikkei Asian Review reported, more and more Japanese companies are looking to snare overseas demand. In November, homebuilder Sumitomo Forestry notched its first exports to China of sugi logs produced in Nara Prefecture, adding to shipments of mainstay products from the southern island of Kyushu.

Chugoku Mokuzai, Hiroshima Prefecture-based timber producer, also says exports of sugi and hinoki timber are growing for markets like China, Taiwan and South Korea. For Japanese producing areas -- grappling with the aging of loggers and the decline of domestic demand -- growing exports may hold the key to revitalization.

Malaysia is forecast to surpass RM 23 billion in timber exports for 2017

Posted on by GWMI Admin

Timber exports from Malaysia are forecast to surpass RM 23 billion for 2017, as the global demand remained stable. 

"In the 11 months of 2017, we posted RM21.40 billion in timber exports, the bulk of it contributed by sales of wooden furniture. Timber exports for 2017 should surpass RM23 billion," said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

India is the major country for Malaysian timber exports, while other 162 countries get their timber supplies from there.

“In a move to tap more trade opportunities in India, MTC has recently opened its regional office in Bangalore,” Mah said.

Malaysia is one of the world's top tropical timber producers, of which the furniture sector is the star performer being among the world's Top 10 producers, as reported by New Straits Times. The country targets to establish 375,000 ha of forest plantations by 2020. This is achieved by planting 25,000 ha of good timber species per year for 15 years, starting from 2005.

“The timber industry is still vibrant and sustainable,” he said, adding 80 per cent of exported furniture are made from rubberwood.

Malaysia’s timber sector is the biggest investors in tree planting. Since 2005, the government has initiated the Forest Plantation Development Programme to ensure sustained timber supply for downstream business such as furniture making.

Mah added that his ministry is also formulating the National Oil Palm Trunk Development Plan to encourage furniture makers consider this as another option of raw material. At the moment, MTC has set aside RM3 million as incentive for small medium enterprises (SMEs) to purchase woodworking machinery.

“I encourage SMEs to take advantage of this incentive to adopt the latest technology in automation and mechanisation,” he added.

Lumber prices in the US pushed to all-time highs

Posted on by GWMI Admin

Trading in framing lumber in the US remained active during last week, while sales pushed some prices to all-time highs. This has affected many traders, given the time of the year and the low temperatures across the continent.
Cold, icy weather stifled job sites from the Midwest to the Northeast and into the Deep South. However, it had little impact on mill sales. Sharp price gains pushed the Random Lengths Framing Lumber Composite Price up $13 for the week.

Week
Jan 19		 Week
Jan 12		 Year Ago
2017
Random Lengths Framing Lumber Composite Price* $458 $445 $354
KD Western S-P-F #2&Btr 2x4 R/L Mill Price 502 486 306
KD Eastern S-P-F #1&2 2x4 R/L, delivered Great Lakes 582 557 401
Green Douglas Fir Std&Btr 2x4 R/L (Portland) 520 495 345
Southern Pine (Westside) #2 2x4 R/L 495 482 426
KD Coast Hem-Fir #2&Btr 2x4 R/L 515 495 350
Ponderosa Pine (Inland) #2&Btr 1x12 R/L 735 735 590
* Weighted average of 15 key items

Random Lengths Panel Market Report
Structural panel markets were active despite distractions from severe winter weather. Sales of OSB gained momentum, especially in the second half of the week. In the South, buyers addressed immediate needs with increasing urgency.
Bitter cold and snow disrupted Southern Pine plywood production in some regions. Demand persisted amid lean inventories and a dearth of imported panels. Western Fir plywood trading was active, if a touch slower than the previous week.

(f.o.b. mill prices) Week
Jan 19		 Week
Jan 12		 Year Ago
2017
Random Lengths Structural Panel Composite Price* $454 $444 $366
Southern (west-east) 15/32-inch 3-ply rated sheathing plywood 470-510 460-500 345-370
Southern (west-east) 15/32-inch 4-ply rated sheathing plywood 475-515 465-505 345-370
Western 1/2-inch 4-ply rated sheathing plywood 498 481 357
North Central 7/16-inch Oriented Strand Board 320 310 280
*Weighted average of 11 key items

China: New national standard to allow more wood to be used in the construction industry

Posted on by GWMI Admin

China has released a new design code for timber structure, which encourages industry to expand the use of wood and improve the grading system of wood strength.

The new standard, coded GB50005-2017, will come into effect on August 1 this year, according to the Ministry of Housing and Urban and Rural construction.

The new version highlights some compulsory new standards as well as mentions the grading system of wood strength and its design specifications. It also aims to improve the design criteria for glue-laminated timber and light wooden structures.

Moreover, the new design code is meant to increase the use of wood and to conduct research and confirm the design value of imported wood products, along with making additional design requirements on structure composite materials and engineered wood products.

Among other key points, it will also carry out comprehensive research and will unify the calculation requirements of wood structure components and connectors, while it will also improve the design criteria for glue-laminated and light wooden structure, along with the regulation on seismic design and structure requirement.

The new design code will coordinate and improve requirements on fire protection design and structure requirements, along with other requirements, on durability design and structure requirements.

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