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German oak lumber exports target Asia

Posted on by GWMI Admin

In the first five months of 2014, Germany's oak lumber exports have increased in volume by 12% as compared to the same period of 2013. Year-to-date exports totaled through May 40,550 cubic meters, while in value the total reached EUR 25,1 million. Traditional European markets for the German oak such as the Netherlands, Poland or Switzerland were on a declining trend in January-May 2014, while shipments to Denmark and the Czech Republic were more consistent and surged by 12% and 60% respectively.
The overall decline in German oak lumber exports to Europe was backed by a sharp increase to Asia. Deliveries to Vietnam almost tripled in volume and even more in value. Vietnam was in the first five months of 2014, the number one destionation for the German oak. Also shipments to China doubled both in volume and value, while those to Indonesia increased by about 40%.
The average export price was EUR 620 per cubic meter (Jan.-May 2013: EUR 643/cbm). The most expensive oak lumber was delivered to European countries: Switzerland (EUR 1320/cbm); Denmark (EUR 924/cbm). At the same time shipments to Asia were even three times less expensive: Vietnam (EUR 409/cbm); China (EUR 427/cbm).

Germany's oak lumber exports (differently processed); Top 10 destinations

 In volume (m3)
May
2013		 May
2014		 Jan.-May
2013		 Jan.-May
2014		 Change in %; Jan.-May 2013 to 2014
Vietnam 615 2,079 2,982 8,904 198%
Netherlands 1,542 1,104 5,648 5,245 -7%
China 413 1,252 2,511 5,169 105%
Poland 1,136 718 6,527 4,341 -33%
Indonesia 679 547 2,352 3,269 38%
Denmark 469 356 2,409 2,706 12%
Switzerland 397 326 1,959 1,625 -17%
Czech Republic 210 290 817 1,325 62%
Italy 256 37 1,710 980 -42%
United Kingdom 414 60 1,325 913 -31%
Others 1,488 1,166 7,860 6,073 -22%
TOTAL 7,619 7,935 36,100 40,550 12%

 

Germany's oak lumber exports (differently processed); Top 10 destinations  In value (€)
 May
2013		  May
2014		  Jan.-May
2013		 Jan.-May
2014		 Change in %; Jan.-May 2013 to 2014
Vietnam 278,000 893,000 1,024,000 3,650,000 256%
Netherlands 852,000 675,000 3,531,000 3,628,000 3%
China 170,000 519,000 1,085,000 2,210,000 103%
Poland 607,000 382,000 3,547,000 2,546,000 -28%
Indonesia 282,000 228,000 998,000 1,490,000 49%
Denmark 479,000 347,000 2,446,000 2,501,000 2%
Switzerland 538,000 430,000 2,658,000 2,145,000 -19%
Czech Republic 167,000 269,000 656,000 1,054,000 60%
Italy 167,000 35,000 1,093,000 799,000 -35%
United Kingdom 378,000 86,000 1,218,000 907,000 -25%
Others 3,918,000 699,000 4,978,000 4,240,000 -15%
TOTAL 4,920,000 4,563,000 23,234,000 25,170,000 8,33%

Stable log prices in Finland

Posted on by GWMI Admin

In June 2014, roundwood prices in Finland are largely stable with few minor changes. Pine sawlogs are slightly cheaper as compared to May, while spruce is more expensive by EUR 0,30/ cbm. Pulpwood assortments have continued their declining trend and they are now priced less over May by between EUR 0,30- 0,58 per cubic meter.
On a yearly basis, in June almost all roundwood ranges prices have declined, except spruce and pine logs. Pine and birch pulpwood prices have decreased the most by -3.2% and -2.7% respectively

Roadside prices of roundwood in Finland EUR/m³ over bark

  June 2013 May 2014 June 2014 Change
June 2013
to June 2014
LOGS
Pine 55.85 56.67 56.57 1.28%
Spruce 56.42 56.39 56.68 0.47%
Birch 45.59 46.56 45.38 -0.46%
PULPWOOD
Pine    29.65 28.80 28.68 -3.27%
Spruce 29.69 29.79 29.50 -0.63%
Birch 30.35 30.11 29.53 -2.70%

The above prices are collected from metla.fi

EU softwood lumber exports to Japan fall 25%

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In the first four months of 2014, EU lumber exports to Japan have seriously fallen. As Japan is expanding its own lumber production, its need for imports is proportionally decreasing. Already at the beginning of this year the Japanese Forestry Agency drew up demand projection for the first quarter and second quarters of this year. According to this, the first quarter would stay without much change but the second quarter would drop related to the end of rush orders in late last year. Also, the Agency expected an increase of almost 5% in Japan's lumber production.

Consequently, according to the latest Eurostat statistics, in January-April the EU countries have exported in value -25% less softwood lumber to Japan as compared to the same period of 2013, down to EUR 228 million. Alone in April, shipments to Japan have dipped by -43% showing a bad signal for the upcoming period.

Nordic sawmills exports dropped in the range of -15% (Finland:-14%; Sweden: -16%), but a more important decline was registered in Romanian and Austrian deliveries. In the first four months of 2014, Romanian softwood lumber exports to Japan dipped by -39% (down to under EUR 40 million), while those from Austria by -40%, down to EUR 30 million. German shipments went just under EUR 10 million and a drop of -12%.

EU laminate flooring manufacturers report slow recovery

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Europe's laminate flooring sector, while still dominant in global terms, came under considerable pressure during the global financial crises. Declining consumption combined with overcapacity and overseas competition, particularly from China, led to a sharp fall in prices, ITTO reported.
This meant that retailers had to shift huge volumes of laminate flooring in order to profit from sales. As a result distributors have been turning to higher margin products such as Luxury Vinyl Tiles (LVT) which are seen to offer a better combination of quality, value and margin.
The European laminate flooring industry has responded partly through down-sizing and partly through development of new higher value product lines. It has also focused marketing efforts on the specific performance and environmental benefits of laminate flooring and on the quality credentials of European manufacturers.
Sales of laminate flooring in Germany, the largest single European market for laminate flooring, fell from 76 million sq.m in 2012 to 72 million sq.m in 2013. Sales in Turkey, the second largest market, declined from 66 million sq.m in 2012 to 65 million sq.m in 2013.
According to the latest EPLF annual report, the European market for laminate flooring has stabilised and is just beginning to show signs of recovery. Sales of laminate flooring by EPLF member companies increased 0.7% from 460m sq.m in 2012 to 46 3m sq.m in 2013.
Although sales declined in Western Europe and Turkey in 2013, there were gains in other regional markets (see table).
Partly as a result of these efforts, Europe's laminate flooring market has become increasingly diversified. Low end products are still available at retail prices of less than €10 per m2. These contrast with upscale products offering some combination of long-life guarantee, bevelled edges, handscraping, wire brushing and exotic designs which might be priced in excess of €25 per sq.m.
The industry's marketing effort has been co-ordinated by the Association of European Producers of Laminate Flooring (EPLF) which this year incorporated the slogan “Quality and Innovation made in Europe” into the association logo.
EPLF's members currently consist of 21 manufacturers from 11 European countries. The EPLF manufacturers supply approximately 55% of the global laminate flooring market and over 80% of the European market.
Germany is hugely dominant in the sector in Europe, accounting for around 50% of production by EPLF members in 2013. The second largest producer amongst EPLF members is Turkey accounting for 15% of production.
According to the latest EPLF annual report, the European market for laminate flooring has stabilised and is just beginning to show signs of recovery. Sales of laminate flooring by EPLF member companies increased 0.7% from 460m sq.m in 2012 to 463m sq.m in 2013.
Although sales declined in Western Europe and Turkey in 2013, there were gains in other regional markets (see table).

million sq.m Year Change in %
2010 2011 2012 2013  2012-13
W. Europe & Turkey* 302.0 299.4 297.7 290.0 -2.6%
E. Europe 109.0 103.5 98.9 103.0 4.1%
North America 41.0 26.8 23.4 28.0 19.7%
Latin America 16.0 15.7 16.8 17.0 1.2%
Asia 10.0 10.6 11.6 13.0 12.1%
Other 8.7 11.9 11.2 12.0 7.1%
Total 486.7 467.9 459.6 463.0 0.7%

* Turkey is classified as "Western Europe" in EPLF statistics

statistic

Sales of laminate flooring in Germany, the largest single European market for laminate flooring, fell from 76 million sq.m in 2012 to 72 million sq.m in 2013. Sales in Turkey, the second largest market, declined from 66 million sq.m in 2012 to 65 million sq.m in 2013.
France also saw a slight decline from 40 million sq.m in 2012 to 39m sq.m in 2013. Sales to the UK were stable at 29 million sq.m in 2012 and 2013.
EPLF member sales increased in Eastern Europe in 2013. Poland was the largest mar ket for laminate flooring in the region, with sales rising from 24 million sq.m in 2012 to 25 million sq.m in 2013. Sales also increased in Russia, Romania and Ukraine last year.
As recently as 2011, North America experienced a dramatic slump in sales of laminate flooring due to the challenging economic situation in the USA. Sales dropped from 41 million sq.m in 2010 to 27 million sq.m in 2011 and then to only 23 million sq.m in 2012.
In 2013, North American sales picked up once more, rising to 28 million sq.m. Sales in the USA increased from 12 million sq.m in 2012 to 16 million sq.m in 2013. Sales in Canada remained stable at 11 million sq.m in both 2012 and 2013.
Tough competition from Asia's domestic manufacturers has meant that sales of European laminate flooring to the region have been limited to date. European sales are focused on higher value premium products.
European sales throughout Asia increased from 11.6 million sq.m in 2012 to 13 million sq.m in 2013. European sales of laminate flooring in China, including Hong Kong, increased from 3 million sq.m in 2012 to 4 million sq.m in 2013.
The volume is very small compared with the overall size of the Chinese market which is believed to consume in excess of 250 million sq.m of laminate flooring each year.

Sojitz seeks sales expansion of Chinese poplar LVL

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Sojitz Building Materials Corporation (Tokyo) will expand sales of Chinese made poplar LVL. Poplar LVL is one of strategic items of Sojitz. Current monthly sales volume is 4,000 - 5,000 cbms then target in 2017 is 10,000 cbms. About 3,000 cbms are for fixture material and 1,000 cbms are for crating so far.
Sojitz started handling poplar LVL since 2004. Supply sources are two plan ts of Taian Huihao Timber and Huaian Hui Hao Timber of Hui Hao Timber group then another plant of Jiangsu Fuqing Wood. They are in Jiangsu and Shangdong province. All those plants have acquired JAS certification for fixture use and two plants have JAS cer tificate for structural use.
Products by Huaian Huihao plant are 100% for Japan market with about 10 years' dealings with Sojitz. Sojitz loaned about $750,000 for renewal of facility of Huaian Hui Hao Timber. Current market of poplar LVL is for stud for condominium, core for interior fittings and crating. Sojitz estimates it holds share of about 10% in Japan.
Sojitz plans to develop market for core of panel on top of current market of stud, brace and ceiling joist. Sojitz will aggressively propose use of LVL for builders and precutting plants. In case they use light weight steel, LVL can be replaced since LVL has cost competitiveness, price stability, dimensional stability and short delivery period.
Sojitz figures that the market of Chinese LVL will expand to 600,000 cbms in 2017 as compared to current 440,000 cbms. It also considers capital investment on Chinese plants if the market expands as much as it figures. Basic order unit of sales is one container but it will market small volume out of the inventory at major ports like Osaka, Nagoya and Hakata.

Switzerland: Wood pellets price rises in August

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In August, the price of wood pellets in Switzerland is unchanged. The average price for a tonne of ENplus pellets curently stands at CHF 397.90 (EUR 327). It is thus 0.4% higher than the price of July and just below the price of August 2013.

The price has increased the most for 5 tonnes deliveries, which is 0.8% higher than in July minimally above the level of August 2013 with 396.86 CHF (EUR 326.19). The price for 8t deliveries is now 385.48 CHF (EUR 316.84), higher by 0.5% than in July and similar to last year's price. Pellets in 3t deliveries format cost in August 411.45 CHF (EUR 338.18).

Higher European purchases of Chinese plywood

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The decline in EU plywood imports from China recorded last year has been reversed in the first four months of 2014. With an overall European positive trend in imports of plywood (+6% in January-April), backed by rising purchases from major suppliers such as Russia (+16%) and Brazil (+12%), China has exported plywood worth EUR 119 million to Europe, an increase of 4% against January-April 2014.
In the period mentioned, the UK imported Chinese plywood for a total of EUR 60 million, an increase of 12% compared to the first four months of 2013. Significantly decrease of imports from China were in Germany (-19%) and France (-13%), while Belgium, the second Europen importer, decreased its imports by -1%.
In terms of market shares, China continues to play an important role on the Europen plywood market. China currently is the third largest plywood exporter to EU, with a share of 13.8%, but very close to Brazil (14%) and Russia (15.8%).

Main wood pellet consumers in Europe

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While the EU produces about fifty percent of world wood pellets production, the EU market represents about seventy of the market. Of the consumption of 17.5 MMT in 2013, about an equal share is estimated to be used for industrial use and household use. The residential use for heating is relatively stable growth market compared to the use for power generation as the latter is highly dependent on government funding. The major users of wood pellets in the EU are the United Kingdom, Italy, Denmark, Germany, Sweden, France and Austria.

Main Pellet Consumers (1,000 MT)
Calendar Year 2009* 2010 2011 2012* 2013*
UK 200 176 1,000 3,850 5,000
Italy 850 850 1,500 2,500 2,600
Denmark 1,400 1,600 1,600 2,300 2,400
Germany 1,100 1,200 1,400 2,000 2,200
Sweden 1,920 2,280 1,880 1,900 2,000
France 300 400 550 890 1,100
Austria 550 660 720 900 1,000
Belgium 920 920 1,200 800 500
Netherlands 900 913 1,000 500 500
Total 9,500 11,400 12,500 17,500 20,000

Source: AEBIOM and Member State sector organisations, * = estimate EU FAS Posts
Besides wood pellets, also large quantities of wood chips and briquettes are used. The EU sector estimates the current EU consumption of wood chips at 14.5 MMT and expects it to grow to 28 MMT in 2020. Growth in demand is supported by increased investments in medium seized combined heat and power (CHP) plants. Most chips are sourced locally, but Scandinavia is regarded as a potential growth market for imports from non-EU destinations. Wood pellets are traded more internationally. The EU pellets market can be divided in three regions.
In Italy, Germany, France and Austria pellets are mainly used in small-scale private residential and industrial boilers for heating. According the European Pellet Council (EPC), the pellet demand for the heat market grew on average fifteen percent during the past three years. Based on the sales of boilers and stoves, the consumption of residential pellets is expected to surge in mainly Germany, Italy and France. In some Member States, such as Austria, household heating with biomass as input receive subsidies by the federal and local governments. In most countries, however government funding is limited. The residential pellet market is mainly driven by prices of alternative fuels, while the demand for industrial pellets depends primarily on EU Member State mandates and incentives.
The wood pellet market in Sweden and Denmark is diverse. Wood pellets are being used in small boilers in private homes, medium sized district heating plants as well as in large CHP plants. Both countries have a high target for renewable energy use in 2020, respectively of 49 and 35 percent. The majority is planned to be obtained from biomass. Already in 2012, Sweden has reached its goal set for 2020.
In markets such as the United Kingdom, Belgium, and the Netherlands residential use is negligible and the demand is dominated by large scale power plants. During 2011 – 2012, consumption in the United Kingdom, Belgium and the Netherlands surged as a result of government funding. The large scale use of wood pellets by the power plants is driven by the EU mandates for renewable energy use in 2020. The governments of these countries opted to fulfill their obligations mainly by the use of biomass for the generation of electricity. As these countries lack a sufficient domestic production of pellets they largely dependent on imports.
The UK Government enforced the Industrial Emissions Directive, which boosted consumption further in 2013. In 2014 consumption is expected to reach 5 MMT. The UK government has mandated UK electricity suppliers to source an increasing proportion of their electricity from renewable production.
In Belgium and the Netherlands, the use of pellets for electricity generation has been put on hold. On September 6 2013, the Dutch Government, private sector and NGOs signed the Dutch Energy Accord (see GAIN Report NL3029). In the agreement co-firing of biomass is capped at annually about 3.5 million MT of wood pellets. Uncertainty, however, still exist on the sustainability requirements. A similar situation exists in Belgium. As from March 2014, the Flemish power sector has reportedly stopped co-firing of wood pellets. The reason for this decision is that the Belgian Government no longer grants funds for pellets which are produced from an industrial resource.
In Denmark, pellet use by power plants is continuing in 2014. Based on Danish Government policy and private sector investments, Danish consumption is expected to increase from 1.8 MMT in 2013 to over 3 MMT in 2020.

Parquet production in Europe down 1.8%

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Production of parquet in the 17 countries covered by FEP*, the European parquet association, declined by 1.8% to 67.03 million m2 in 2013 (Chart 2). FEP estimate that total production in Europe, including both FEP and non-FEP countries, was just over 77 million sq.m in 2013. These figures were released by FEP at their annual meeting in Malaga, Spain, in June.
Production in Poland, Europe's largest parquet manufacturing country, increased 2.5% to 13.28 million sq.m in 2013. Poland now accounts for nearly 20% of all production in FEP countries.
Production in Germany, the second largest European manufacturing country, remained stable at 10.4 million m2 between 2012 and 2013.
However production in Sweden, the third largest manufacturing country, declined 3.3% to 8.78 million sq.m in 2013. There was also a 5.8% fall in production in France to 6.9 million sq.m.
Parquet consumption in FEP countries declined 2.6% to 82.68 million sq.m in 2013. Consumption in all the leading European markets was falling last year.
There was no change in the proportion of parquet production by product type between 2012 and 2013. In both years, multilayer parquet accounted for 78% of production, solid wood for 20% of production and mosaic parquet for only 2% of production.
Consumption was down 6% to 19.8 million m2 in Germany, down 7% to 11.6 million m2 in France, and down 5% to 7.8 million m2 in Italy. However these losses were partially offset by rising consumption in Austria, Denmark, Finland, Norway, Switzerland, and Romania.
Consumption was down 6% to 19.8 million m2 in Germany, down 7% to 11.6 million m2 in France, and down 5% to 7.8 million m2 in Italy. However these losses were partially offset by rising consumption in Austria, Denmark, Finland, Norway, Switzerland, and Romania.
The share of tropical wood fell from 6.2% to 5.8% last year. The share of ash (5.1%), beech (4.6%) and maple (1.6%) were all slightly lower in 2013 than in the previous year. However, the share of pine increased from 4.1% in 2012 to 4.4% in 2013.
At their June meeting, members of FEP reported that the outlook for parquet in Europe has improved in 2014 after nearly seven years of lingering economic and financial crisis. The positive trends that have emerged in northern Europe at last seem to be filtering through into southern Europe which was traditionally a large market for parquet.
However, members of FEP expressed concern about continuing lack of access to credit following the financial crises, particularly amongst small and medium - sized companies that dominate parquet sector.
* FEP Member countries: Austria, Belgium, Czech Republic, Denmark, Finland , France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Romania, Slovakia, Spain, Sweden and Switzerland.

Canfor purchases 4 sawmills in US

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Canfor Corporation has announced the purchase of the operating assets of Balfour Lumber Company and Beadles Lumber Company. The transaction includes two sawmills located in Thomasville and Moultrie, Georgia(US) in an area with a sustainable fibre supply. The Balfour and Beadles mills produce southern yellow pine lumber and the operations have a combined capacity of 210 million board feet (≈500,000 cubic meters). The purchase is structured with 55% being acquired in January 2015 and the balance after a two year period.

"The Balfour and Beadles sawmills are strong high performing assets in a supply area of sustainable and quality fibre." said Canfor Corporation President and CEO Don Kayne.

No financial details on the transaction were disclosed.

Stable wood pellet production in Germany

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Nearly 1 million tons of wood pellets were produced in Germany in the first half of the year. As the German Energy Wood and Pellet Association (DEPV) reports, production of wood pellets in Germany thus remains stable at a high level, though a 7 percent decline can be noticed as compared to the first half of 2013. Looking at the upcoming winter heating season, warehouses and silos in Germany are well filled and production since July 2014 is on an upward trend. "The pellet industry is prepared for the coming winter and production is still higher than consumption in Germany," says Martin Bentele, managing director of DEPV.
"After the mild winter, a clear decrease of pellet production in Germany could not have surprised anybody," said DEPV CEO Martin Bentele commenting the new figures. However, the declining trend in the first quarter was offset by a significantly increased production in the second quarter.
In Germany, for the production of wood pellets, in the second quarter, sawmill residues were still the number one raw material (92.5%). This means that sawmill residues were used in a higher degree than in the past winter when they had a share of 83%. The use of non-sawable roundwood stands at 7.5 percent. 99 percent of the pellets are used for residential heating for the provision of heat (ENplus grade A1 and A2), while production of pellets for industrial large power plants still continues to play no role in Germany.

Countries that haven't fulfilled EUTR obligations exposed

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The European Commission has published a table with information on the state of implementation of the European Union Timber Regulation (EUTR) by the EU Member States as regards whether they have complied with their obligations provided for by the EUTR.
The scoreboard identifies a number of countries that weren't able to fulfill their obligations, which creates numerous doubts whether illegal timber trade will be eradicated from the EU market. The Commission said the results showed “a mixed picture with regard to the implementation of the regulation across the EU. To be effective, the legislation needs to be applied in full in an efficient and effective way, but there is still room for improvement in a number of member states”.
Spain, Poland, Hungary and Malta are identified as the worst offenders, having fullfilled none of their obligations. While Italy, France, Romania, Greece, Latvia, Slovenia, Croatia and Luxembourg were also identified as problems.
 

European laminate flooring in jeopardy in Russia and Turkey

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Members of EPLF (the Association of European Producers of Laminate Flooring) report a slight upward trend in total European sales of laminate flooring in the first half of 2014. However political issues are now creating concerns about future prospects in Turkey and Russia which have been key growth markets for laminate flooring in recent years.

Sales of European laminate flooring in Turkey weakened in the first half of this year. This was partly driven by a big fall in the value of the lira-euro exchange rate. However it may also be a consequence of Turkey's decision in December 2013 to start anti-dumping procedures against German laminate flooring producers.

The decision follows complaints by Turkish flooring producers that German manufacturers have been selling at below production cost in Turkey. German manufacturers have responded that their costs are lower than Turkish competitors because they have more efficient raw material supply chains. The Turkish government is still investigating and has yet to publish a final decision.

EPLF members also report challenges in the Russian market this year. Apart from the potential political fall-out from recent events in Ukraine, European laminate flooring manufacturers allege widespread counterfeiting of their products in the Russian market.

EPLF claim that in Russia “the high proportion of inferior-quality and incorrectly-declared goods imported from Asia makes things difficult for EPLF manufacturers as it tends to cause lasting damage to the image of laminate flooring”.

To counter this threat, EPLF has established a "Russia task force" to work directly with Russian trade associations and retailers to raise awareness of quality standards and put in place procedures for brand protection.

China steps up logs&lumber imports

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Wood buyers in China were more active in the late spring after a slowdown during the winter months. This resulted in increased importation of logs and lumber during the 2Q, reports the Wood Resource Quarterly. The biggest gains were in lumber from Russia and softwood logs from New Zealand.
A slowdown in the Chinese economy impacted the construction sector in early 2014 resulting in a decline in lumber import volumes by 16% in the 1Q/14 as compared to the previous quarter. The biggest drop was in Canadian lumber shipments, which fell to their lowest levels in two years. The reduced activities in the building sector during the winter months also impacted log import volumes to China, but it was more of a break in the upward trend rather than a decline, with the 1Q/14 imports being about the same as in the 4Q/13.
Later in the spring the economy picked up steam and the GDP rose by 2.0% in the 2Q, up from 1.4% in the 1Q/14. The annual growth rate is now on target to reach close to 7.5%, which would be slightly lower than in 2013 but still considerable growth compared to most other major economies around the world. Most of the positive news in the 2Q came from the industry and retail sectors, while the real-estate market continued to be weak with housing sales being more than nine percent lower the first half of this year compared to the same period in 2013.
Despite the reduction in house sales, China increased the importation of both lumber and logs in the 2Q with lumber volumes climbing 19% from the 1Q/14. Russia, which currently supplies about 40% of softwood lumber to the Chinese market, increased shipments by as much as 32% from the first to second quarter this year. The second largest lumber supplier Canada, only shipped two percent more volume quarter-over-quarter.
Although Canada and Russia are by far the largest suppliers of lumber to China, other countries are expanding their sales to this growing market. The biggest gains have been in shipments from Chile and Europe.
Log importation reached an all-time high in the 2Q/14 with New Zealand, the number one supplier, increasing volumes by 15% from the previous quarter. Shipment from the US and Canada were also higher, while log supply from Australia and Russia fell about five percent in the 2Q.
Much uncertainty hovers over how the Chinese economy will do for the rest of the year but it is not likely that we will see the same bump in wood imports in the third quarter as was the seen in the second quarter. Rather, the short-term forecast is for a flat line, or even decline in log and lumber.

China steps up logs&lumber imports

Posted on by GWMI Admin

Wood buyers in China were more active in the late spring after a slowdown during the winter months. This resulted in increased importation of logs and lumber during the 2Q, reports the Wood Resource Quarterly. The biggest gains were in lumber from Russia and softwood logs from New Zealand.

A slowdown in the Chinese economy impacted the construction sector in early 2014 resulting in a decline in lumber import volumes by 16% in the 1Q/14 as compared to the previous quarter. The biggest drop was in Canadian lumber shipments, which fell to their lowest levels in two years. The reduced activities in the building sector during the winter months also impacted log import volumes to China, but it was more of a break in the upward trend rather than a decline, with the 1Q/14 imports being about the same as in the 4Q/13.

Later in the spring the economy picked up steam and the GDP rose by 2.0% in the 2Q, up from 1.4% in the 1Q/14. The annual growth rate is now on target to reach close to 7.5%, which would be slightly lower than in 2013 but still considerable growth compared to most other major economies around the world. Most of the positive news in the 2Q came from the industry and retail sectors, while the real-estate market continued to be weak with housing sales being more than nine percent lower the first half of this year compared to the same period in 2013.

Despite the reduction in house sales, China increased the importation of both lumber and logs in the 2Q with lumber volumes climbing 19% from the 1Q/14. Russia, which currently supplies about 40% of softwood lumber to the Chinese market, increased shipments by as much as 32% from the first to second quarter this year. The second largest lumber supplier Canada, only shipped two percent more volume quarter-over-quarter.

Although Canada and Russia are by far the largest suppliers of lumber to China, other countries are expanding their sales to this growing market. The biggest gains have been in shipments from Chile and Europe.

Log importation reached an all-time high in the 2Q/14 with New Zealand, the number one supplier, increasing volumes by 15% from the previous quarter. Shipment from the US and Canada were also higher, while log supply from Australia and Russia fell about five percent in the 2Q.

Much uncertainty hovers over how the Chinese economy will do for the rest of the year but it is not likely that we will see the same bump in wood imports in the third quarter as was the seen in the second quarter. Rather, the short-term forecast is for a flat line, or even decline in log and lumber.

Schweighofer new sawmill in Romania under construction

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Schweighofer construction works for the new sawmill in Reci (Romania, county Covasna) are proceeding very well, the company announced in a press release. At the moment the planing hall, the cutting hall and the kiln drying chambers are being built. Four of the total 9 pellets silos are also already under construction. The log place will follow in August. Start of operation will be in 1st quarter of 2015.

The company says that 150 Mio Euro will be invested and approximately 650 people from the region will find a place to work. The sawmill will have an annual cutting capacity of 800,000 m³ and 80% of the produced lumber will be exported to markets in Asia (mostly Japan). Gluelam production (Post) will be 100.000 m³, while pellets production will reach 130.000 tons per year.

EGGER expands capacity in Germany

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This month the EGGER Group has inaugurated a new lamination line at its German plant in Gifhorn, Lower Saxony. EGGER has invested approximately 15 million Euro in the expansion and has thus increased production capacity by 6 million m2. With the start-up of the new press, the total capacity of the plant has now reached 33 million m2.
The new investment is a continuous laminate press (CPL = Continuous Pressed Laminates). It was built by Hymmen and is the seventh lamination line for the Lower Saxony plant. The integrated cooling section allows for the production of high-gloss laminates. At 1,310 mm, it has the same working width as the previously installed line (start-up end of 2011), but a pressing zone that is almost twice as long. Another advantage of the continuous production of laminates with the CPL procedure is independence from length wastage. Thus, ordered lengths are flexible. It is also possible to produce laminates that are less than 0.5 mm thick and to supply a specific range of thicknesses in rolled form.
The new laminate press continues the 39-year story of the Gifhorn plant. In 1975, Dekoflex started producing the world's first melamine laminate endless edging strips. EGGER acquired a share in the plant in 1988 and launched its first foray into laminate production. Since 1995, the plant belongs to the EGGER Group which has expanded capacity several times.
Laminates have been part of EGGER's product range for more than 20 years. EGGER laminates are used in classical furniture and interior design, such as countertops, but also in the door industry, retail, ship and car manufacturing. EGGER offers laminate quality for multiple fields of application in a thickness range from 0.15 to 1.20 mm, as well as individual laminate lengths.

Steico starts construction of LVL plant in Poland

Posted on by GWMI Admin

On July 16, 2014, the component manufacturer Steico has laid the foundation stone for the new Czarna Woda LVL plant near Danzig, Poland. The new production line will be built in a new 20,000 square meter hall and it is designed in the first stage to produce about 80,000 cubic meters per year. In the first stage, approximately 100 new jobs will be created.
The Czarna Woda site has many advantages such as its proximity to the Danzig port and wooden areas or a sufficient area for future expansion. A large part of the laminated veneer lumber production produced by Steico in Czarna Woda will be used as components for Steico-joists. Therefore, it is possible to easily adapt existing organizational and logistics processes.
Based on the current state of the plant is in the first stage, the annual production capacity will be of approximately 80,000 cubic meters. Production includes parallel and crosswise glued laminated veneer lumber to 2.5 x 18.0 m in thicknesses and 20 to 90 mm in formats. The system is modularly designed so that the capacity can be increased at a later date.

Raw material for Steico's LVL will be mostly Polish pine, which has proven to provide good technical characteristics for structural LVL. Among other product supply advantages, the new LVL mill will allow for a quicker and more flexible delivery to UK, Western and Central Europe's growing LVL market. The full scale production of the future LVL mill is planned to be reached by end of 2015.
Steico is one of the leading wooden construction material producers in Europe. The company's current product offering comprises wood fiber insulation materials, sarking and sheathing boards, ETICS (external thermal insulation compound systems), I-joists and hardboards.

Biomass plants expected to increase rapidly in Japan

Posted on by GWMI Admin

It has been about two years after FIT (fixed price power purchase system of renewable energy) was enacted in Japan. Number of plans of power generation facility by biomass use has been increasing rapidly and there are about 80 to 90 plans so far. About 30 will start running in next two years.
Since many plans are still on the table, wood chip prices have been stable yet but soaring demand for biomass will certainly impact many sectors of forest and wood processing industry in coming years.
According to the Agency for Natural Resources and Energy, 31 biomass generation facilities have been approved with total generation capacity of 620,000 kw but total power generated by actually operating facilities is only 42,985 kw, 7% of approved total capacity.
There are three operating facilities, which use biomass for fuel as of February this year then Woody Kawai has started in April and Tohsen group will start up in July, Miye Enewood will start in September and Gifu Biomass Power will start in October.
By next spring, Nihon Kaisui, Maniwa Biomass Power, Chugoku Lumber's Hyuga plant and Oji Green Resources will start up. Thus, by this time next year, there will be eight more facilities running.
This creates large demand of low grade wood so there are moves to utilize fiber resources left in the woods such as thinning and unused short chunks, tree tops and branches. They become valuable resources if they are hauled out economically and stably to the users.

Wood pellet demand in Europe expected to triple by 2020

Posted on by GWMI Admin

The European Union recently published its annual biofuels report for 2014 with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. The report says that the EU is the world’s largest wood pellets market, with a consumption of about 17.5 MMT of pellets in 2013.
Based on the EC mandates and Member State incentives, the demand is expected to expand further to nearly 21.0 MMT in 2015. Consumption forecasts for 2020 range from 50 – 80 MMT (AEBIOM). Future consumption will however, depend on a range of market factors and in particular Member State incentives.

Wood Pellets (1,000 MT)
Calendar Year 2007 2008 2009 2010 2011 2012 2013 2014c 2015c
Beginning Stocks 167 771 1244 620 999 777 877 555 405
Production 5,782 6,294 6,669 9,241 9,620 10,000 10,150 13,000 13,000
Imports 900 1,250 1,771 2,610 3,226 4,490 6000 7,500 8,500
Exports 50 50 64 72 68 90 120 150 150
Consumption 6,028 7,021 9,000 11,400 13,000 14,300 16,000 20,000 21,000
Ending Stocks 771 1,244 620 999 777 877 907 405 755
Production Capacity
Number of Plants 499 670
Capacity 8,583 11,283 13,694 14,845 15,500 16,000 16,200 16,400 16,600
Capacity Use (%) 67.4% 55.8% 48.7% 62.2% 62.1% 62.5% 62.7% 76% 78%

Source: (a) The European Biomass Association (AEBIOM), (b) GTIS, (c) FAS Post Estimates
With a production of about 11.5 million MT in 2013, and about fifty percent of global production, the EU is the world’s biggest producer of wood pellets. Compared to production plants in North America, plants in the EU are mainly small or medium sized. Most of the main pellet producing countries have a sizeable domestic market for residential heating pellets. Recent growing demand for these pellets has supported a further increase in the domestic production. Exceptions in the table above are Latvia and Portugal, which sectors are producing mainly for export and use in large scale power plants abroad.
Germany is the third largest wood pellet producer in the world after the United States and Canada. It has currently about seventy production facilities for wood pellets with a total annual production capacity of 3.5 million MT. In 2013, production amounted to 2.25 million MT, 90 percent of which were produced from residues of the timber industry.

Main Pellet Producers (1,000 MT)
Calendar Year 2009 2010 2011 2012 2013e 2014e
Germany 1,600 1,750 1,880 2,000 2,250 2,350
Sweden 1,580 1,650 1,340 1,340 1,350 1,350
France 345 465 530 680 890 1,200
Latvia 525 615 713 979 980 980
Austria 695 850 940 893 900 900
Portugal 287 627 675 700 700 700
Poland 410 510 600 600 600 600
Total 7,940 9,186 9,470 10,652 11,500 12,500

Source: AEBIOM and Member State sector organisations, e = estimate EU FAS Posts.
The second largest producer in the EU is Sweden. During the past three years, Swedish production has stagnated and has partly been replaced by competitive imports from the Baltic Region and Russia. French wood pellets production amounted to 890,000 MT in 2013, a thirty percent increase over 2012. The growth in pellet production is driven by a strong increase in the demand of residential heating.
Also in Austria pellet production is on a steadily rising trend. Like Germany and France, Austria is a net exporter of wood pellets but demand for residential use is increasing progressively. There is an excess of capacity present in most Member States, but particularly in Spain. Of the 900,000 MT of annual production capacity only about a third was being used in 2013. Use of this capacity has, however, shown steady growth during the past four years supported by an increased domestic demand. Spanish consumption of pellets increased from 100,000 MT in 2010 to 380,000 MT in 2013.
The Baltic Region and Portugal are almost exclusively producing for the export market. Wood pellet production has expanded rapidly in Latvia, Lithuania and Estonia, and totaled nearly 2.0 MMT in 2013. With about 1 MMT, Latvia is the main producer in this region. Portugal has increased its production since 2008, and exported nearly its entire production to the United Kingdom and Denmark.
The major raw material for pellets has traditionally been sawdust and byproducts from sawmills. With the increasing competition for the sawdust resources, a broader sustainable raw material basis is becoming necessary. There is an increased interest in forest residues, wood waste and agricultural residues. In Central Europe, such as Poland and Hungary, some expansion is anticipated for on-site energy generation or supplying the residential heating market.
Capacity growth will however not be sufficient for supplying the full demand in Western Europe. Overall, EU wood pellet production is not expected to be able to keep up with the demand from both the residential heating market and for power generation.

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