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Swedish sawlog prices decreased in Q2

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The second quarter of 2015 shows decreasing sawlog prices in Sweden after a consistent surge in the first quarter. Pine and spruce sawlogs are both cheaper by more than half euro. Pine logs cost now an average of EUR 50.81/cbm, while spruce logs were traded in the second quarter at EUR 55.31/cbm.
Pulpwood prices are slightly higher as compared to the first quarter. Pine and spruce pulpwood have gained a few extra cents and are now priced at EUR 28.83/cbm and EUR 30.01/cbm respectively.
As compared to the same quarter last year, both pine and spruce sawlogs price is more than EUR 2/cbm higher. Pulpwood assortments as well have become more expensive, but no more than 1 euro per cubic meter.

Roadside prices of roundwood in Sweden EUR/m³ (Conversion rate EUR/SEK = 0.10719)

  Q2 2014 Q1 2015 Q2 2015 Change
Q2/2014
to Q2/2015
LOGS  
Pine 48.02 51.45 50.81 +5.81%
Spruce 53.06 56.06 55.31 +4,24%
Pine&Spruce 51.02 54.24 53.60 +5,05%
PULPWOOD  
Pine 27.98 28.51 28.83 +3.39%
Spruce 29.58 29.69 30.01 +1,45%
Pulpwood Total 29.26 29.48 29.80 +1,84%

The above price results are collected from metla.fi

Norvik cuts lumber production at Broakulla sawmill

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Due to the deteriorating market situation Jarl Timber (a part of Norvik Timber) will cut lumber production at its plant Broakulla, Sweden.

The sawmill will now switch from two to one shift. According to a press statement of Norvik Timber, the decline in production will be temporary, and when the market situation improves, Jarl Timber will return to the previous schedule.
Jarl Timber, founded in 1946, is located in the region of Småland, Sweden. The sawmill processes and distributes about 110 000 m3 of sawn and planed timber. Around 85% of the production is sold for exports to Europe, North Africa, Middle East and Far East.

 

China dominates the international hardwood timber trade

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The International Hardwood Conference (IHC) held in Copenhagen from 16-18 September identified access to raw materials, changes in global trade flow patterns and growing purchasing competition with buyers from other parts of the world as well as innovation in non-wood materials as key challenges currently facing the European hardwood industry.
Rupert Oliver, speaking on behalf of the EU-funded and ITTO-hosted FLEGT Independent Market Monitoring (IMM) project, opened the Conference with an overview of global hardwood markets. He showed that the global value of hardwood trade, adjusted for inflation, had rebounded close to pre-crisis levels in 2014.
The total value of global trade in hardwood products (including logs, sawn, mouldings/decking, veneer, and plywood) was around US$38.5 billion in 2014, an increase of 10% on the previous year.
Analysis of the various product groups reveals that the upward trend was heavily dependent on a sharp increase in the global hardwood log trade.
In fact, the total value of global trade in hardwood logs, at around US$11.1 billion in 2014, was significantly
higher than the previous peak in 2007 (when global hardwood log trade was US$9.2 billion.
The value of global trade in all other hardwood materials – sawn wood, mouldings, veneer and plywood - still falls short of the peak just prior to the financial crises that hit western industrialised nations in 2008.
These trends are largely explained by the regional shift in global hardwood trade since the financial crisis. The value of China‘s hardwood imports doubled between 2009 and 2014, to more than US$12bn.
Although China‘s imports of sawn hardwood have been rising, growth is still heavily concentrated in logs. The value of China‘s log imports increased from just over US$2 billion in 2009 to close to US$7 billion in 2014. Meanwhile the influence of Europe - traditionally a large buyer of further processed products like sawn wood, veneers or mouldings - has declined in global hardwood trade flows.
The total value of hardwood imports by European countries (including intra-EU trade), fell from more than US$18bn in 2007 to just over US$10bn in 2009. The total value of hardwood imports by European countries has remained broadly flat since then.
In terms of hardwood export value, the large volume of intra-regional trade means that, in total, European countries remain the largest source of internationally traded hardwoods. In 2014, European countries exported hardwoods with a total value of US$10.8 billion, 2% more than the previous year but well below the peak level of US$18.7 billion recorded in 2007.
The increase in European country exports last year was driven partly by improved consumption in the UK and Spain and partly by rising sales of hardwood logs and sawnwood to countries outside Europe, notably China and Egypt.
However, the value of hardwood exports by countries in other parts of the world has been rising more rapidly. There‘s been a particularly rapid rise in the value of exports by China (dominated by plywood) and by countries in the Mekong delta region (including both rubber wood and hongmu species, both destined primarily for China).
The value of exports by the USA has also been rising with a significantly higher proportion now destined for China and South East Asia and a lower proportion destined for Canada, Mexico and Europe.
Considering just sawn wood, Mr. Oliver showed that global trade in temperate hardwoods recovered much faster than tropical wood following the financial crisis.
In fact global trade in sawn temperate hardwood reached 10.77 million m3 in 2014, 13% higher than the previous year and just exceeding the previous peak in global trade of 10.75 million m3 in 2006.
Global trade in sawn tropical hardwood also increased sharply in 2014, rising 12% to reach 8.99 million m3. However, this level is still 12% down on peak levels in excess of 10 million m3 prior to the crises.
As major ―barriers to expansion of hardwood markets in Europe, Mr. Oliver identified the difficulties arising from the global financial crisis, product innovations in nonwood materials, the shift in global economic activity and hardwood supply to emerging markets, freight and transport issues, EU production of wood-based panels and surfacing technologies and exchange rate movements, among other things.
On the other hand, new opportunities for hardwood are being created in Europe from increased use of wood in green building, interest in hardwood in higher-value structural applications, innovations such as thermal modification which extend applications for less durable species, rising awareness of carbon credentials, certification and legality verification as well as architects‘ and structural engineers‘ increased knowledge of timber.

Brazil: Current prices for logs, sawnwood and plywood

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Brazilian logs, mill yard, domestic US$ per m3
Ipê 149
Jatoba 84
Massaranduba 89
Muiracatiara 93
Angelim Vermelho 85
Mixed redwood and white wood 74

 
Export Sawnwood Prices

Sawnwood, Belem/Paranagua Ports, FOB US$ per m3
Ipe 1380
Jatoba 978
Massaranduba 762
Muiracatiara 736
Pine (KD) 219

 
Domestic Sawnwood Prices

Brazilian sawnwood, domestic (Green ex-mill) US$ per m3
Ipê 729
Jatoba 382
Massaranduba 340
Muiracatiara 355
Angelim Vermelho 317
Mixed red and white 201
Eucalyptus (AD) 189
Pine (AD) 139
Pine (KD) 153

 
Export Export Plywood Prices

Pine Plywood EU market, FOB US$ per m3
9mm C/CC (WBP) 346
12mm C/CC (WBP) 320
15mm C/CC (WBP) 318
18mm C/CC (WBP) 311

 
Domestic Plywood Prices (excl. taxes)

Parica US$ per m3
4mm WBP 529
10mm WBP 427
15mm WBP 375
4mm MR 484
10mm MR 359
15mm MR 340

Domestic taxes include taxes and may be subject to discounts
Prices For Other Panel Products

Domestic ex-mill Prices US$ per m3
15mm MDParticleboard 233
15mm MDF 336

 
Export Prices For Added Value Products

FOB Belem/Paranagua Ports US$ per m3
Decking Boards
Ipê
 2,452
Jatoba
 1,594

China to increase wood construction

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China is committed to increasing the use of wood in future construction, as set out in a directive signed by China’s Minister of Housing and Urban-Rural Development, Chen Zhenggao.This is the first time that China has issued a directive to increase wood construction, and it represents a major breakthrough for the technique in the world’s largest construction market, says the Swedish Forest Industry Federation (Swedish Wood) in a press release. The directive states that the use of wood is to be increased in contexts such as rooftop extensions, curtain walls, tourist facilities, schools, hospitals and other official buildings.
China’s decision is welcomed by Jan Söderlind, International Director at Swedish Wood and Chairman of European Wood:
“This official support for growth in wood construction in China is great news. The decision will have a significant positive impact on the Chinese wood market, although the effects may not be immediately visible.”
“The decision is based on a growing environmental awareness in China. The country faces considerable challenges in the environmental field, something that China’s government is well aware of. Wood is a renewable construction material that can help to reduce their impact on the climate,” says Jan Söderlind.
European Wood, a European collaboration within the sawmilling industry, has worked closely with the Chinese planning authorities to pass on information about norms and standards for modern wood construction. This work has been running since 2005, and has involved study visits, committee work and demonstration projects.
These standards and regulations are now in place, putting China in a strong position to invest in wood construction. Jan Söderlind is confident that this decision will have a highly positive effect on the European sawmill industry and European wood exports over the longer term.
The Chinese authorities are now working on a detailed plan that will include tax incentives and financial instruments to promote a rise in wood construction. An expert committee will be appointed and tasked with assessing, monitoring and taking decisions on key projects within wood construction, including demonstration projects in various forms. New codes and standards will also be drawn up to facilitate the industrialisation of wood components in buildings.

Chinese company Fenglin to build massive wood-processing plant in New Zealand

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A Chinese company plans to invest US$250 million to build a massive wood-processing plant in New Zealand. Fenglin Wood Industry Group, based in Nanning, capital of south China's Guangxi Zhuang Autonomous Region, has already been carrying out a feasibility study on building and operating a highly advanced sawmill in the central North Island, Xinhua news agency reported. The plant will be built in New Zealand's Taupo region, considered the "wood basket" of New Zealand.
"The estimates are around 250 jobs and a 250-million-U.S.- dollar investment to build the plant using world class state of the art technology," said Fritz Frohlke, general manager of the Enterprise Great Lake Taupo development agency, as quoted by Xinhua.
Enterprise Great Lake Taupo had for two years been seeking a commercial stakeholder to undertake an in-depth feasibility study to construct and operate a world class sawmill, producing laminated veneer lumber and medium density fibreboard, in Taupo, Frohlke said in a statement.
The Chinese company's feasibility study was due to be completed by early 2016.
As Xinhua reports, Fenglin Group chairman Cui Jianguo said the project would be "a true win-win deal for both New Zealand and China"
"New Zealand wins as we would process these logs onshore here rather than in China. This would add more value to the product before it is shipped, generating more money into the local economy and creating jobs," Cui said in the statement.
"China wins as we will have a higher quality product as radiata pine is far superior to the eucalyptus that we currently process," he said.
New Zealand's unprocessed log exports have become a major issue in the country, as many domestic sawmills have closed. At the moment, the country unprocessed logs accounted for almost 46 percent of all New Zealand forestry exports, with China taking 70 percent of log exports.

Global prices for hardwood chips down 14%

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Prices for hardwood chips traded overseas have been in steady decline since November 2011. In less than four years, the FOEX hardwood chip price index (PIX-HCG) has fallen almost 14% to reach US$178.34 per oven-dry metric ton (odmt) in July 2015. The downward trend of the index has partly been the result of lower prices for hardwood chips, in US dollar terms, imported to Japan from Australia, Chile and South Africa.
Global overseas trade of hardwood chips has slowed down in 2015 with the total trade for the first six months of the year being almost 14% lower than the same period in 2014.
The FOEX softwood chip price index (PIX-SCG) has fluctuated more than the PIX-HCG the past two years and has been on an upswing for the past three months after having declined since last summer. In July, the Index was up almost four percent month-over-month to US$173.20/odmt, the highest level since December of 2014. The increase in the price index was due in part to higher import prices in Japan and Turkey.
FOEX and Wood Resources International (WRI) have cooperatively launched two wood chip price indices, the Softwood Chip Global (SCG) and Hardwood Chip Global (HCG), both part of the PIX index family of FOEX. The indices represent prices (CIF) for wood chips that are traded globally overseas for the manufacturing of wood pulp and wood-based panels.

The German wood industry reports slowdown in growth

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The German wood industry recorded in the first half of the year a slight increase in sales of 1.2% as compared to the corresponding period of 2014. Overall sales reached EUR 16.6 billion (H1/2014: 16.4 billion). The Federation of the German timber industry (HDH) reports that the economic situation has slowed notably, taking into account that in the same period of 2014, the turnover of the sector registered an increase of 4.1%. For the second half of 2015, HDH anticipates a further slowdown in growth.
Weaker construction industry
A significant influence on the slowdown in growth was the current drop in the construction industry. Positive sales in the wood industry are currently influenced by the good half-year figures in the furniture industry. With a turnover of 8.5 billion euros, the German furniture industry has grown by +4.6%. Results lie well above the same period of last year, and above the projections made by the wood industry.
Sales in the woodworking industry with different development
Revenues in the third pillar of the wood industry, the woodworking industry, fell by -2.5% to EUR 7.6 billion. The individual segments of the woodworking industry developed as follows:
The largest segment- the wood based panel industry - recorded a significant increase in sales (+2.5%) to around 2.5 billion euros. Domestic sales remained almost unchanged (-0.1%), while foreign sales increased significantly by +7.8%.
The second largest segment of the woodworking industry, the so-called  "construction-related area", includes manufacturers of prefabricated houses, windows, doors, staircases and other building elements. This sector declined by -3.6% in the first half of 2015, compared to last year, when sales reached EUR 2.3 billion.
Aggressive international price pressures have largely contributed to the negative development of this segment. This has lead Germany for some time to increase imports of components (especially windows and doors) and has increased pressure on exports of German manufacturers.
The prefabricated sector significantly outperformed the overall construction market, with a building permit increase of +7%. Overall, 49,513 single-family homes were approved from January to June of the current year, of which 8,158 prefabricated. The nationwide proportion of prefabricated construction thus rose to a new half-year record high of +16.5%. In some German regions this figure is even higher. For example, Baden-Württemberg recorded a new half-year record of +28.6%.
German sawmills showed a significant decline in sales of -6.8% (down to 2.1 billion euros). However, HDH says that this result is influenced by a decline in the total number of reporting companies (-5%). Moreover, national and international price declines in sawmill products played an essential role to the overall result.
The German parquet industry developed significantly negative in the first half. The German Federal Statistical Office reports a sales decline of -11.7% down to approximately EUR 135 million. This is due to the negative production development and increasing pressure from imports. A survey conducted by the German Association of the Parquet Industry shows that German production of parquet dropped -8.2% in the first half of 2015 as compared to the same period of 2014. A major contribution to this negative development was that Bauwerk Boen -one of the most important German parquet producers- ceased production in Germany.
According to data of the German Federal Statistical Office, demand in the wooden packaging segment is currently negative. The official figures (companies with more than 50 employees) show that from January to June 2015, a decline in sales of -11.2% was recorded, down to EUR 320 million.
Export: Furniture in plus, wood and wood products in the red
The export business of the German wood industry shows a mixed picture, according to HDH. Overall, foreign sales in all segments rose by 4.0%. The industry export quota (part of the turnover, that companies that produce in Germany make with exports) went slightly up in the 1st half of 2015 and was 29,5% (1st half 2014: 28,7%)
The main driver of this positive overall result was the furniture segment with an increase of +9.8% and an export ratio of 31.8%. The woodworking industry -international in almost all individual segments- recorded a total decline in foreign sales of -3.2%. The industry export quota is held back by a persistent weakness in growth in major European markets and fell to 25.6% (previous year 25.8%).
Slowed development in the second half
The forecast for the second half of 2015 is with few positive marks. The German economy, in an international comparison, continues to be good; interest rates and unemployment are low, income expectations reached in July and August record highs, according to Gfk. However, worldwide economic troubles continue to spread uncertainty among consumers and entrepreneurs. In June, economic institutes have lowered the forecast for this year's German gross domestic product by up to 0.4 percentage points. The Ifo Institute appreciates the current German business situation as positive, but not expectations. New orders are already being seen in red.
HDH sees for the full year 2015 a sales growth for the entire German wood industry of less than 1%.

US softwood lumber shipments to China down 50%

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In the first half of 2015, US softwood lumber exports to China dropped nearly 50% to 247,290 cubic metres, valued at US$64 million, as compared to the corresponding period of 2014.
According to the US Softwood Export Council (SEC), YoY American softwood lumber shipments to India increased 52% in volume (to 28,696 cubic metres) and 57% in value (to US$6.5 million).
Despite China's economic slowdown, the country remains the world's top importer of softwood logs, importing a total value of US$5.4 billion in 2014, says SEC. Imports of softwood lumber were valued at US$3.8 billion, just behind the US, the world number one importer, at US$5.2 billion.
Overall, the US softwood industry exports saw a YoY decrease of 18% in value to US$454 million while lumber volume declined 15% YoY to 1.66 million cubic metres. Southern Yellow Pine surpassed Douglas Fir in exports as the leading softwood lumber species at $130 million while Douglas Fir dropped nearly 32% from $150 to $100 million in value.

Italian woodworking sector sees 15.9% international demand growth

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In the second quarter 2015, Italian woodworking technology orders have increased, as further evidence of the positive trend that characterized last year. So, a new wind of optimism can be noticed, although there are still many critical issues that might cause the trend to reverse. The first factor is the enduring stagnation of demand in the domestic market: Italian economy, according to a widespread vision, seems to be heading for a new, more satisfactory season, although technology investments are lagging behind this trend.
Furthermore, some foreign markets are not so interested in Italian machinery: Russia is still a closed market, as a matter of fact, while worries are spreading – partially influenced by official statements by Chinese authorities in recent weeks – for the impact that the yuan devaluation policy might have on global markets.
This is the scenario for the results of the periodical survey by the Studies Office of Acimall, the Confindustria-member association that represents the manufacturers of woodworking technology, tools and accessories, an excellence of “made in Italy”.
The survey – involving a significant statistic sample in terms of company size and product categories – indicates that orders increased by 5.3 percent compared to the April-June period in 2014. Orders from the domestic market in the second quarter 2015 decreased by 11.9 percent from the same period of last year.
Strong 15.9 percent growth for foreign orders, despite the problems mentioned in two major destination markets for this industry.
According to Acimall estimates, the book of orders spans 2.8 months (versus 3 in the previous quarter); since the beginning of the year, prices have increased by 0.8 percent, as against 0.9 percent in the first quarter.
Quality survey
According to 57 percent of the sample, the production trend is positive, while it is stable for 38 percent and decreasing for 5 percent. So, there is more satisfaction compared to the January-March 2015 period, when “positive thinking” was shared by 27 percent only, while 55 percent expected substantial stability and 18 percent feared further reduction.
Stable outlook for employment, with 62 percent expecting no variation, 14 percent increase and 24 percent reduction). Available stocks are increasing according to 33 percent of interviewees, stationary for 62, decreasing for 5 percent.
Forecast survey
In its survey, Acimall Studies Office gives useful hints about the predominant “feelings” of Italian companies.
Once again there is substantial confidence in the results that can be achieved abroad, while worries are increasing for the domestic market, as witnessed by the negative balance of the opinion poll after two months of moderate optimism also on the home front.
According to 38 percent of the sample, foreign orders will increase again in the next quarter. Substantial stability is the expectation of 52 percent, while 10 percent see further reduction (positive balance 28).
As mentioned, the balance on the Italian market is negative by 4 points, resulting from 14 percent expecting a further shrinkage of domestic orders, 76 percent expecting a stable trend and only 10 percent with an optimistic outlook.

Yildiz Entegre buys two Siempelkamp MDF/HDF plants

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Turkish Yildiz Entegre, a long customer of Siempelkamp, ordered two new MDF/HDF production lines in September. This is the first time that Yildiz Entegre, the largest manufacturer of wood based materials in Turkey, invested in wood-based material production plants outside its country. Siempelkamp will supply one MDF/HDF plant including a 9' x 55.3m ContiRoll® press to Vladimir in Russia situated 190 km east of Moscow. The second plant, also for the production of MDF and HDF, will be built in Pitesti, Romania. Here, Yildiz Entegre will operate an 8' x 55.3m ContiRoll® press.
The scope of supply for both projects includes the production areas for drying and separating, the forming and press line, the cooling and stacking line, the fully automatic high stack storage system as well as high performance sanding lines with integrated cut-to-size system. Siempelkamp will also provide the corresponding automation for all supplied plant areas as well as the process data handling and evaluation via "Prod-IQ" for the entire production plant.
Sicoplan, a Belgium subsidiary of Siempelkamp will provide support with approval procedures and carry out the implementation engineering. Both projects are supported by Göttinger GIM Export Group, which is responsible for the financing of the main plant and for the downstream board finishing equipment.
With the ContiRoll® Generation 8, Yildiz Entegre has decided to order, for the seventh and eighth time, press technology made by Siempelkamp. With its pressure distribution plates this Siempelkamp press operates virtually isobaric. Equipped with an additional row of cylinders and a light-board package the press allows, next to the production of standard MDF/HDF, the production of light MDF (L-MDF) with low densities and consistently the best board properties.
Yildiz Entegre currently operates four locations for the production of wood-based materials in Turkey which were all established with Siempelkamp's support. At the headquarters in Kocaeli, the world's largest production location for MDF/HDF, the company operates three ContiRoll® press lines with a yearly capacity of approx. 1.5 million m³. This location is also home to a high-speed 12-daylight door skin line made by Siempelkamp with a yearly capacity of up to 12 million door skins.
In 2012 Yildiz Entegre started up three more production locations in Turkey including Siempelkamp's ContiRoll® technology. One of those is the greenfield plant for MDF/HDF in Mersin, in eastern Turkey, with an annual capacity of approx. 460,000 m³. Another greenfield plant in Akhisar/Manisar as well as the company's Mudurnu plant manufacture particleboard.
The annual production volume of Yildiz Entegre currently amounts to approx. 2 million m³ of MDF/HDF and 900,000 m³ of particleboard. The new investment will increase MDF/HDF production by approx. 1 million m³ to 3 million m³ annually.

Slight increase for wood pellets prices in Switzerland

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In September, the retail price for ENplus A1 wood pellets in Switzerland is slightly higher than the previous month. The current average price is 375.10 CHF (342.60 EUR) per tonne, which is 0.4% more than in August. As compared to September 2014, the price is lower by 7%. Since May, the average price rose by less than 3 CHF/t.
In euro terms, the price was 333.79 euros a year ago, and is therefore currently 2.6% higher than in September 2014.
Depending on the delivery quantity the September 2015 price varies between 364.14 CHF (332.58 EUR) and 387.29 CHF (353.73 EUR) per tonne.

Tolko cuts sawmill production due to low Chinese demand

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Tolko Industries Ltd. decided to reduce the operating footprint of their Quest Wood lumber mill, due to continued market challenges in China,. The mill, located in Quesnel B.C., employs 224 people and currently produces 200 million board feet of product annually.
Larry Broadfoot, General Manager, Lumber, Plywood Sales & Marketing said the reduction is necessary in current market conditions: “Lumber market prices and volume demand for our products, particularly in China, have declined to a point where it is now necessary to reduce the operating footprint of the mill in order to remain competitive and produce a more appropriate volume and quality for the market.”
Broadfoot noted that while the reduction will have implications for customers, customer service will remain a priority. “At Quest Wood, we will run at current capacity until mid-October when the existing fibre inventory will be consumed,” he said. “At that point, we will be delivering a higher quality log which will reduce the volume of lumber available from Quest Wood to the market by 100 million board feet. Despite this reduction, all product commitments to our customers will be met.”
Troy Connolly, General Manager BC Lumber, noted that employees have been informed of the decision and have been advised of next steps as the process moves ahead.

Schelling acquires German IMA

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The Austrian technology leader of cut to size solutions Schelling has acquired the German IMA from Munich, a specialist for automated edge processing technology.
With this deal, both companies aim to lead in automation technology for the panel processing and furniture industries. The two companies already cooperate for 25 years in the form of joint trade worldwide fairs, and executing many large scale installations and projects.
While Schelling is recognised as the worldwide leader in cut to size machines and plants for wood panels and other materials, IMA is a highly regarded specialist for edge processing technology and systems for the furniture and component manufacturing industries.
Both companies currently have a combined total of over 1,400 employees and over €250m in revenue.

Koskisen to expand sawn timber production

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Koskisen Oy, one of Finland's largest private wood processing companies, plans to increase sawn timber production in the coming years. One part of the plan is an investment in a new Valutec wood channel dryer. 
''Raw wood supply appears to be growing in the upcoming years in Finland. This is an opportunity to increase production of sawn timber, and we want to seize this opportunity by increasing capacity,'' says Koskinen sawmilling director Tommi Sneck.
Investing in a new channel drying kiln is one part of Koskisen plan to increase capacity from 300,000 to 350,000 m3 per year. The kiln is OTC-type, which means that the air is blown in the opposite direction than in conventional kilns. The dryer includes heat recovery, pressure frames and a roller line. The channel dryer has a capacity of 51,000 cubic metres. In addition, Valutec will install Valmatics control system for the existing 30 channel dryers and chamber kilns.
Valutec plans to start installation work in October, and the new kiln is expected to be ready for use in early 2016.
Koskisen produces Finnish sawn timber, processed timber, planed goods and painted external cladding panels processed from spruce and pine for use in the construction and joinery industries.

Sawlog prices falling worldwide

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Sawlog prices fell again in the 2Q/15 in most of the 19 regions worldwide that are part of the Global Sawlog Price Index (GSPI). The Index is at its lowest level since 2009, and is down 20% from its all-time high four years go.
The only regions where prices increased in the 2Q were in Northwest Russia and the Interior of British Columbia.
Global trade of softwood roundwood slowed down towards the end of 2014 and log shipments have continued to be slow during the first half of 2015, with the biggest reduction in imports being in Japan, South Korea and Sweden
Global Pulpwood Prices
Wood fiber costs for the global pulp industry continued their downward trend in the 2Q/15. The Softwood Fiber Price Index (SFPI) was $91.98/odmt, which was slightly lower than in the previous quarter.
The SFPI index has fallen for four consecutive quarters and was in the 2Q/15, 8.4% lower than 2Q/14. The biggest price declines from the 1Q/15 occurred in Brazil, Central Europe and New Zealand.
The Hardwood Fiber Price Index (HFPI) fell one percent from the 1Q/15 to $88.95/odmt in the 2Q/15. The HFPI has declined for four years and is currently 25% below its all-time high in 2011. Fiber prices fell the most in France, Brazil, Indonesia and Australia.
Global Pulp Markets
Despite the recent slowdown, global market pulp production during the first five months of the years was up 3.7% as compared to the same period last year.
Prices for NBSK have fallen much of the first eight months of 2015, while BHKP prices have gone up. The price premium for NBSK in Europe has shrunk from over $200/ton last fall to only about $35/ton this summer.
Global Lumber Markets
There have been mixed signals in the global lumber market during the 1H/15.
Of the major lumber-importing countries in the world, China, the US and the United Kingdom have increased importation the most during the first half of 2015.
Japan and most countries in Europe have imported less lumber this year as compared to 2014.
Exporting countries that have taken advantage of the scattered bright lights in the international lumber market have included Canada, Finland, Russia and Sweden.
Although the good news for lumber producers in the Nordic countries has been higher export volumes in 2015, the bad news has been that the average export price has declined by over 20% this year.
Import volumes to China were 2.4% higher during the first seven months of 2015, with Russian shipments to China having increased 18% and supply from North America and Chile having declined over 10%.
Both domestic and import prices for softwood lumber in Japan moved slightly lower during the summer months, and were close to their lowest levels in over seven years.
Despite substantially lower export prices in Russia, total export volumes have not seen a dramatic increase. Shipments in April and May were practically the same in 2014 and 2015.
Global Biomass Markets
British Columbia’s overseas pellet exports in the 1Q/15 fell by over 6% q-o-q.
Pellet exports from the US South also fell back, breaking a four-year continuous increase in overseas shipments.
Unusually warm weather, low costs for fossil fuels, and plenty of pellet supply drove the pellet prices in Europe downward during the spring and summer to their lowest levels in over three years.

Global production of sawn softwood inches up

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In 2014, sawn softwood consumption increased in North America by 4.6%, to 85.6 million m3 , and in Europe by 2.5%, to 86.4 million m3 , but it declined in the CIS by 3.7%, to 17.63 million m3, according to UNECE/FAO's ''Forest Products Annual Market Review 2012-2013''.
Volatile currency exchange rates affected countries differently, but all subregions posted gains in production: North America, 3.5%; Europe, 3.0%; and the CIS, 0.9%.
The Nordic countries, and particularly Sweden, contributed more than half (1.2 million m3) of the net increase in European apparent consumption. Strong domestic and export markets enabled European production to grow by 3% in 2014, to 100.9 million m3 , the highest level since 2011. Prices (in euros) for European sawn softwood increased in some overseas markets but dropped in Japan and were stable in Europe. Prices increased somewhat in Middle Eastern and North African markets.
In 2014, sawn softwood production increased in the CIS by 0.9% over 2013, to 36.1 million m3 .
The dramatic devaluation of the rouble in early 2015 made Russian exports of sawn softwood extremely attractive. China is still the Russian Federation’s largest export market for sawn softwood: Russian sawn softwood shipments to China totalled 8.4 million m3 in 2014, up by 11% compared with 2013. Aided by a weakening rouble, Russian producers enjoyed a weighted average price increase of 24% (in roubles per m3) in 2014 softwood production grew by 5.4% in 2014, to 53.8 million m3 , while Canadian production gained 1.1%, to 41.9 million m3.
Production gains outpaced growth in demand in domestic and export markets, and prices declined for most products. Currency swings favoured Canadian producers.
Despite a difficult first quarter in 2015, there is optimism in most UNECE countries that market conditions will improve in the second half of the year

Metsä to adjust production at its pine sawmills in Finland

Posted on by GWMI Admin

After adjusting production at its spruce sawmills in Finland, Metsä Wood will start statutory employee negotiations to adjust its production also at its pine sawmills in Finland.
Oversupply and price competition that have prevailed in the sawn timber market have resulted in poor price development of Finnish sawn timber.
Metsä Wood is planning to lay off all of its employees at the Merikarvia, Kyrö and Lappeenranta sawmills for a maximum period of three weeks.
The statutory employee negotiations are expected to be completed during September, and any restrictions will primarily be implemented by the end of November 2015.

Interfor cuts lumber production by 20% in US South

Posted on by GWMI Admin

Interfor today announced plans to reduce production across its operating platform in the US South by 20 percent on a temporary basis in response to weak market demand.
The curtailments will be taken by way of reduced hours at five of the company’s mills in the region and will remain in place until market conditions dictate otherwise.
“Prices for Southern Yellow Pine lumber have fallen by 27 percent since the beginning of the year as available supply has outstripped product demand in the region,” said Duncan Davies, Interfor’s President & CEO.
“This action will help bring Interfor’s production and the needs of our customers back into balance. It will also help to keep inventory levels in check as we move into the fall.”
The curtailments are at Interfor’s sawmills in Baxley, Thomaston and Meldrim, Georgia; Georgetown, South Carolina; and Monticello, Arkansas. During this time, Interfor will implement a series of planned maintenance and reliability improvements at the affected sawmills which will offset the financial impact of the curtailments on a go-forward basis.
Interfor has nine sawmills across the US South, with total annual capacity of approximately 1.3 billion board feet.

Canada should target other markets after the SLA expiration

Posted on by GWMI Admin

Canada needs to step up efforts to build new markets for softwood lumber as the country's biggest customer, the U.S., shows little interest in renewing a trade agreement that expires on Oct. 12, a report from the Canada West Foundation (CFW) says.
Without a Softwood Lumber Agreement (SLA) in place, western Canada’s lumber industry is vulnerable to punishing tariffs from the U.S., a country which buys two-thirds of Canada's softwood exports.
According to CFW, Canada can ease the impact of any such action by redoubling its efforts to build markets in Asia. It broke into China, for example, and while that market is cooling, opportunities are arising in Korea, Vietnam, Thailand, Indonesia and the Philippines. The report suggests Canada might even be able to take a bite out of the market in Mexico, which imports much of its lumber from the U.S.
It is of particular concern to the West because fully three-quarters of its lumber exports come from western Canada, primarily British Columbia. The report notes that B.C. lost so many trees to the mountain pine beetle infestation, it cannot supply wood in the volume it once could. Canadian companies have adjusted by investing in U.S. sawmills.
In addition to building new markets, the report recommends building value in its trade with U.S. to help mitigate future disputes. Canada can do this by seeking new value-added product markets and promoting the Canadian brand. It also recommends continuing to work with the U.S. to grow the global softwood lumber market.

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