After a healthy 2013 and early 2014, lumber markets in the US started weakening in the spring with lumber prices falling over ten percent so far this year. The reduced lumber prices together with lower demand for US logs in Asia in the second quarter have put downward pressure on US sawlog prices so far this year, according to the Wood Resource Quarterly.
The sawmilling sector in the US has been in a steady comeback mode ever since the global financial crisis struck in 2008. From 2009 to 2013, production has gone up every year, and the total production increased 28 % over this four-year period, at about the same pace in the South and the West. During the first quarter of 2014, production fell in the South by 1.1% as compared to the same period in 2013, while production was up 2.1% in the West (most in the Inland region), according to the latest data from WWPA.
Both lumber export from and imports to the US have gone up in the 1Q/14 year-over-year. Export volumes were up 18 % with the biggest increases in shipments to China (+73%) and Mexico (+6%). Importation of lumber increased five percent in the first quarter with Canada (+6%) and Germany (+104%) accounting for the biggest volume gains compared to the 1Q/13.
The recent price trend for lumber in North America has been downward after sharp increases last summer and fall. Prices in May this year were down between 8-17%, depending on species, from their recent peak in the beginning of the year.
Healthy log export markets to Asia during the first quarter this year and increased lumber production along the West coast resulted in continued upward price pressure on sawlogs in the US Northwest in early 2014. In the 1Q/14, Douglas-fir log prices reached their highest level since 2006 and prices for hemlock logs were at an 18-year high. The dramatic price swings in Western US the past five years stand in sharp contrast to the US South, where average prices have only moderately adjusted upward from 2009 to the 1Q/14.
With the demand for logs from both domestic sawmills and the export market in Asia weakening during in the second quarter, sawlog prices started to fall back in both the South and the West after having trended upward for over three years. In May, prices for sawlogs were down between 5-15%, depending on species and region, as compared to the beginning of the year.
Article archive
Latvijas Finieris buys Finnish birch plywood mill
The joint-stock plywood producer Latvijas Finieris subsidiary in Finland, Riga Wood Finland OY, has acquired a birch plywood mill in Sastamala, Finland.
This year's goal is to reorganize production processes in Sastamala according to the requirements of the Latvijas Finieris Group, launch birch plywood products under the trademark RIGA and stabilize work in three shifts, as the company said in a press release.
Janis Ciems, CEO of Latvijas Finieris: “After the reorganisation, the Latvijas Finieris Group will continue industrial specialisation and product development, achieving a 9% increase in the total capacity. This will make it possible to offer growth in cooperation and product development to clients in Northern and Central Europe already in the next year, together with improved solutions in logistics.”
Latvijas Finieris produces and sells birch plywood, it is also involved in forestry, production of synthetic resins, sale of wooden boards, and others. More than 90% of plywood by Latvijas Finieris is exported and marketed in over sixty countries, most of it in Germany, Great Britain, France, Finland, Turkey and Italy.
Vietnam aims to double forestry exports by 2020
Vietnam plans to earn some 10 billion U.S. dollars from exporting wood and its products by 2020, according to the Ministry of Agriculture and Rural Development.
Under an action plan on developing the wood market for 2014- 2020, Vietnam is set to increase production, trading value of forests and sustainable forestry development.
Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Product Association, said on Friday that Vietnam is likely to meet the set target of 10 billion U.S. dollars worth of wood export by 2020 thanks to bright prospects of Vietnam's major markets including the United States, China, the European Union and Japan.
Vietnam hopes to finish the negotiation to join the Trans-Pacific Partnership (TPP) in 2014. Once joining the TPP, the country will benefit greatly as taxes on Vietnam's wood and wood products will be reduced in many of its major markets such as the United States, Japan and Australia, Quyen said.
According to the latest official report, Vietnam pocketed 384 million U.S. dollars from wood exports in May, bringing the total amount for January-May to 2.34 billion U.S. dollars, up 14.2 percent year-on-year.
The United States, China and Japan maintained the three largest importers of Vietnamese wood in the first four months of 2014, accounting for 66.16 percent of the total wood export revenue.
In 2013, Vietnam's forestry export revenue hit 5.7 billion U.S. dollars, up 19.2 percent year-on-year, which accounted for 4.3 percent of the global market share, ranking the sixth worldwide.
The global forest industry in the first quarter of 2014
With improved lumber markets in many regions around the world in early 2014, sawlog consumption was higher and sawlog prices were moving upward in a majority of the 20 regions covered by WRQ. The Global Sawlog Price Index (GSPI) rose by 0.8% from the 4Q/13 to US$89.45/m3 in the 1Q/14.
During the 1Q/14, trade of logs was up in all major markets of the world as compared to the 1Q/13. For the four largest exporting countries, the increase was 17%, with the biggest rise in shipments coming out of Russia.
Global Pulpwood Prices
Lower wood fiber prices in local currencies and a strengthening US dollar resulted in declines in both the Softwood and Hardwood Fiber Price Indices (SFPI and HFPI), which are the price indices that track wood costs for the global pulp industry.
The SFPI fell from $99.51/odmt in the 4Q/13 to $99.43/odmt in the 1Q/14, with the biggest price reductions occurring in Canada, Russia, Australia and Brazil.
The prices for hardwood pulplogs have trended downward in many markets for more than two years, which is reflected in an HFPI Index that has constantly fallen each quarter since its peak in the 3Q/11. In the 1Q/14, the HFPI was $97.01/odmt, down from $97.59/odmt in the previous quarter. Prices fell the most in Russia, Eastern Canada, Western US and Brazil.
Global Pulp Markets
Production of market pulp fell in two of the three major pulp-producing regions in the world in early 2014. Production was down 5.2% in N. America and 4.2% in Europe. In Latin America, production was up 2.6% mainly because of higher exports to China and Europe.
Prices for NBSK pulp have been holding up better than those for HBKP this year. With the recent opposing price trends for softwood and hardwood pulp, the price discrepancy between the two major pulp grades has widened to a two-year record.
Global Lumber Markets
Lumber imports to Japan slowed down in the 1Q/14, with volumes being four percent lower than the first quarter of 2013 and, in fact, representing the lowest 1Q import levels since 2010.
A slowdown in the Chinese economy has impacted the construction sector, resulting in a decline in lumber imports during the first four months of 2014. The biggest drop has been in lumber shipments from Canada, while Russian sawmills have kept up deliveries fairly well.
The sawmilling sector in the US has been in a steady comeback mode ever since the global financial crisis struck in 2008. From 2009 to 2013, production has gone up every year, and the total production increased 28% over this four-year period. In early 2014, production fell slightly.
Lumber exports from Canada in the 1Q/14 fell to all markets except the US. The biggest decline from the previous quarter was in lumber headed to China (-22%) and to Japan (-32%).
The Finnish sawmilling industry had a good year last year with total production reaching over ten million m3, the highest level in five years. This positive trend continued in 2014, with production in the 1Q being up 5% thanks to higher shipments to France, Germany and Algeria.
Global Biomass Markets
With no slowdown in sight, North American wood pellet exporting companies keep building new facilities to manufacture pellets for the European market. Export volumes hit a new record high in the 4Q/13 and the total shipments for 2013 were up almost 50% from the previous year.
South Korea has increased importation of pellets dramatically the past two years with Vietnam and Canada being the major suppliers
Supply of wood biomass for energy in Europe is overestimated
The European Commission expects the use of biomass for energy in the EU to increase significantly to meet a legally binding target of at least 20% of the EU’s total energy use from renewable sources in 2020, says a European Forest Institute (EFI) report. In response to the increased demand, the EU member states have estimated the direct supply of biomass from their forests to increase by 45% on a volume basis between 2006 and 2020. A new study, led by Kristina Blennow from the Swedish University of Agricultural Sciences (SLU), shows for the first time that European private forest owners are not as ready to increase the supply of woody biomass for energy as assumed.
Fifty percent of the forest area in Europe is privately owned. The private forest owners’ attitudes towards supplying biomass for energy so that the targets can be met and the related economic policy instruments are extremely important. Considering the beliefs and desires of the land owners in designing land-use policies is crucial for their effectiveness. This study shows that the future supply of woody biomass for energy from privately owned forests in Europe and the effectiveness of economic policy instruments to mobilise woody biomass from them have been overestimated.
An international team of scientists from the Swedish University of Agricultural Sciences, the European Forest Institute, the Technical University of Lisbon (Portugal), and the Swiss Federal Research Institute WSL base their report on survey data from 800 private forest owners operating across Europe. The data shows that although the forest owners generally asserted strong belief in a persistent and strong demand for woody biomass for energy use, their readiness to change the management objective to woody biomass for energy in forest stands currently managed for stemwood is low, even if it would lead to higher financial return. This shows that the attitudes of those who make decisions at the local level strongly influence the supply of woody biomass for energy from the European forest sector.
Only one respondent in ten, representing 12% of the forest area, reported a weakly positive or strongly positive attitude to convert to producing woody biomass for energy at a profit in forest stands currently managed for stemwood. Almost two respondents out of three held a strongly negative attitude towards making the change. Assuming that respondents with a weakly positive and strongly positive attitude towards making the change from stemwood to biomass for energy will indeed make the change and that the respondents represent the European private forest owners in general, only 12% of the privately owned forest land will be available for providing stemwood for energy generation. Hence, a conservative estimate of the harvest level of stemwood for energy in privately owned forests in Europe is 12% of the maximum. This can be compared with the 94.6% assumed in influential simulation studies.
Price of German wood products in April
In April producer prices for wood products in Germany moved significantly above the level of the previous month. For building products of solid wood this trend is more pronounced than for hardwood products and timber materials.
For the solid wood building products, only narrow boards’ price is at a lower level than in the previous year. Otherwise, the prices are about 3-7% higher than in April 2013.
For hardwood and wood composites the average price level is at best, just over 1%, except raw boards which are almost 8% higher. After months of decline, particleboard has reversed in recent months and in April, the price has increased nearly by 8% year on year. And also compared to March the price is up by 3.4%.
Dr. Peter Sauerwein, from the Association of German engineered wood industry sees this development as a result of capacity reductions which were made in the industry. The capacities are now adapted to demand, which makes the market more competitive and allows price increases. The general economic situation of the industry supports the upward movement. Both from the construction sector but also from the furniture industry there are signs of recovery, Sauerwein said.
Moreover, on the raw materials side, things look favorable for the board manufacturers at the moment. Due to the limited capacity of the energy market, sawdust is more readily available, Sauerwein added.
| Germany's Producer Price Index Commercial Products (2000=100) |
Apr. 2013 |
Mar. 2014 |
Apr. 2014 |
Change Apr. '13 to '14 |
| Spruce and Fir lumber (Picea abies Karst.) | 110.3 | 114.9 | 115.0 | 4,26% |
| Lumber according to DIN 4074/S10 | 113.8 | 116.3 | 117.1 | 2,90% |
| Finger-jointed squares and beams (KVH) | 101.3 | 105.0 | 103.6 | 2,27% |
| Boards, width over 16 cm | 114.9 | 121.0 | 121.6 | 5,83% |
| Boards, width from 8 to 16 cm, size from 15 to 24 mm | 112.9 | 111.9 | 111.5 | -1,24% |
| Roof battens according to DIN 4074/S10 | 110.3 | 117.8 | 118.3 | 7,25% |
| Reserve squared timber, A/B, 10X10 - 12X12 | 109.4 | 113.7 | 114.1 | 4,30% |
| Softwood, size>6mm, planed, sanded, finger-jointed | 108.5 | 112.2 | 112.3 | 3,50% |
| Wood chips from softwood | 109.2 | 114.3 | 109.3 | 0,09% |
| Pellets and Briquets, compressed | 124.8 | 132.5 | 125.9 | 0,88% |
| Hardwood lumber | 106.4 | 107.0 | 107.3 | 0,85% |
| Beech blocks, A/B, size 50-60 mm, length 3m, damped | 104.8 | 102.3 | 102.3 | -2,39% |
| Beech frames, size 26-32 mm, length 3m, undamped | 106.6 | 107.5 | 107.8 | 1,13% |
| Particle boards, raw or sanded | 103.2 | 107.7 | 111.4 | 7,95% |
| Particle boards, laminated with decor | 114.4 | 114.8 | 114.8 | 0,35% |
| HDF panels, size > 800 kg/m³, raw/sanded | 112.1 | 111.6 | 111.6 | -0,45% |
| Laminate floorings, density > 800 kg/m³ | 109.1 | 110.0 | 109.8 | 0,64% |
Logs more expensive in Estonia
Almost all assortments of roundwood in Estonia have become significantly more expensive in April 2014 on a yearly basis. However, there are some exceptions: birch veneer is far cheaper than a year ago (almost by -16%), while birch pulpwood has registered a price decline of more than -10%. For the rest, prices have seriously increased: spruce sawlogs are more than 11% up, pine sawlogs prices surged by 5%, while aspen logs rose almost 7%. Pine and spruce pulpwood have reached a price increase close to 10%.
However, as compared to March 2014, Estonian roundwood prices recorded some discrepancies. Prices for sawlogs are stable (with minor increases or decreases), except birch veneer which has lost more than EUR 5 per cubic meter. Pulpwood prices surged by EUR 0,43/cbm for birch and EUR 1,51/cbm for aspen pulpwood.
Roadside prices of roundwood in state forests of Estonia (EUR/m³ u.b.) |
April 2013 | March 2013 | April 2014 | Change Apr.'12 to '13 |
| Logs | ||||
| Pine | 65.19 | 68.51 | 68.49 | 5.06% |
| Spruce | 60.34 | 67.42 | 67.39 | 11.68% |
| Birch | 57.51 | 57.91 | 58.04 | 0.92% |
| Birch veneer | 115.40 | 102.73 | 97.20 | -15.77% |
| Aspen | 32.22 | 33.36 | 33.23 | 3.13% |
| Small logs (d<18 cm) | ||||
| Pine | 51.74 | 55.85 | 56.73 | 9.64% |
| Spruce | 48.03 | 53.15 | 52.91 | 1.16% |
| Pulpwood | ||||
| Pine | 27.56 | 31.90 | 30.15 | 9.39% |
| Spruce | 27.41 | 30.30 | 29.76 | 8.57% |
| Birch | 30.12 | 26.62 | 27.05 | -10.19% |
| Aspen | 17.38 | 19.69 | 21.20 | 21,97% |
|
Fuelwood |
19.62 | 19.89 | 19.75 | 0,66% |
The above prices are collected from metla.fi
Schweighofer, Egger and Kronospan reign over the Romanian timber market
Schweighofer, Kronospan and Egger are three Austrian companies with wood processing operations in Romania. Their cumulated business exceeded EUR 1 billion in 2013, a double amount as compared to 2009, according to the Romanian financial daily Ziarul Financiarul.
The overall timber production in Romania was 5 million cubic meters in 2013, an impressive increase over the 2000 output (1.4 million cbm). Of the total production, the three Austrian companies purchase by far the largest amount of wood, mainly through their provider Romsilva, the Romanian state company managing local forest areas.
Some companies from the Romanian timber market complain over the Austrian companies activities, which cause a lack of raw materials for the small entrepreneurs. "People are unhappy because big firms in the industry buy large quantities of wood from Romsilva, so for the others who can not afford these amounts there isn't sufficient raw material," said Marin Vîrciu, mayor of Gîrda de Sus, a local town from eastern Romania.
Others complain over price pressure issues. For example, Aurica Sereny, the president of Furniture Producers Association in Romania (APMR), says that the price of wood increased tremendously due to the large companies running strong productivity and exports and that this impacts the competitiveness of furniture producers in Romania. Ms. Sereny added that the price of wood increased by 30 to 40 per cent since the beginning of the current year, while the price for furniture products increased with a maximum 2 per cent.
Financial data show that Schweighofer reached a turnover of EUR 470 million and a profit of EUR 100 million in 2013, while Kronospan Sebes achieved a turnover of EUR 250 million and EUR 0.3 million loses in 2012. In the fiscal year of 2013, Egger attained a turnover of EUR 209 million and a profit of 14 million.
Doubling in US wood pellet exports due to high European demand
Wood pellet exports from the United States nearly doubled last year, from 1.6 million short tons (approximately 22 trillion Btu) in 2012 to 3.2 million short tons in 2013, says a new report of the U.S. Energy Information Administration (EIA). More than 98% of these exports were delivered to Europe, and 99% originated from ports in the southeastern and lower Mid-Atlantic regions of the country.
As recently as 2008, the U.S. Forest Service estimated that approximately 80% of U.S. wood pellet production was consumed domestically. However, because of strong demand growth in Europe, wood pellet exports have been the driving factor in the growth of domestic wood pellet production in recent years.
Growth of U.S. wood pellet exports has been concentrated in southeastern states, which have advantages in terms of abundant material supply and relatively low shipping costs to Europe. Transportation cost is a large part of the total cost of wood pellets; for example, according to Bloomberg New Energy Finance, transportation accounted for a quarter of the delivered price of wood pellets from the Southeast to the Netherlands in mid-2013. Shipping costs generally increase with distance, so the proximity of the United States to Europe compared to wood pellet manufacturers in Brazil and western Canada provides a pricing advantage for U.S. wood pellet exporters.
European countries, particularly the United Kingdom, are using wood pellets to replace coal for electricity generation and space heating. A principal driver in market activity is the European Commission's 2020 climate and energy package, binding legislation enacted in 2009 that implements the European Union's 20-20-20 targets. The 20-20-20 targets have three individual goals for 2020: to reduce EU greenhouse gas emissions by 20% from 1990 levels, to increase the renewable portion of EU energy consumption by 20%, and to improve EU energy efficiency by 20%.
In 2013, the top five importing countries of U.S. wood pellets exports were all European: the United Kingdom, Belgium, Denmark, the Netherlands, and Italy. The United Kingdom accounted for the majority (59%) of U.S. wood pellet exports, and more than tripled its imports from the United States between 2012 and 2013.
The United Kingdom's wood pellet imports from all sources have grown from near zero in 2009 to more than 3.5 million short tons in 2013. Because of the United Kingdom's Renewables Obligation program,
the operators of several large coal-fired power plants have either retrofitted existing units to cofire biomass wood pellets with coal or have converted to 100% biomass. The Drax power plant—rated at nearly 4,000 megawatts and the largest coal-fired power plant in the United Kingdom—is in the process of implementing plans to convert half of its six generating units to run solely on wood pellets. The first of these three units entered service in 2013, while the remaining two conversions are planned for completion in 2015. According to Eurostat, the United Kingdom is also a major importer of wood pellets from Canada and, to a lesser extent, from other European sources. Until 2013, Canada was the primary source of the United Kingdom's import supply.
Sonae closes laminate flooring plant in Spain
Sonae Industria, SGPS, SA announces that its subsidiary company, Tafisa - Tableros de Fibras SA, has announced its intention to enter into negotiations with employees and Trade Unions regarding the planned closure of its plant located in Pontecaldelas (Spain).
Pontecaldelas currently employs 60 people and has an annual production capacity of 4,000,000 m2 of laminate flooring. It is Sonae Industria's intention to continue to supply laminate flooring products to its existing customer base.
The decision to enter into these negotiations is due to the continuous losses that are being incurred by this operation, mostly driven by the low level of market demand for flooring. This is consistent with Sonae Indústria's stated strategy of reducing its industrial footprint and concentrating production in its more efficient and profitable plants.
German softwood lumber exports up 21%
In the first months of 2014, Germany's softwood lumber exports rose in volume by 21% against the same period of 2013, according to the latest figures issued by Eurostat. The total export volume reached 1,01 million cubic metres in January-February, indicating a good 2014 start for the German sawmills after a sluggish 2013. In terms of value the increase is even higher (25%) and a total export amount sligthly over EUR 200 million.
German softwood lumber shipments to the EU countries rose by 19%, with significant gains in France (+19%), Netherlands (+23%) and the UK (+49%). Deliveries to main export destination, Austria, were stable at 2%.
Following the recent European sawmills trend, Germany's softwood lumber exports to China continued to expand sharply and more than doubled in volume in January-February.
|
Germany- Softwood lumber exports in cbm (Top 10 Destinations) |
January-February 2013 | January-February 2014 | Change in % |
| Austria | 121,277 | 123,772 | 2% |
| France | 115,616 | 137,431 | 19% |
| Netherlands | 84,809 | 104,132 | 23% |
| Belgium | 72,337 | 77,751 | 7% |
| Italy | 65,815 | 74,037 | 12% |
| China | 24,153 | 54,605 | 126% |
| United Kingdom | 29,739 | 44,455 | 49% |
| Egypt | 3,502 | 36,403 | % |
| USA | 18,864 | 36,402 | 93% |
| Czech Republic | 18,500 | 35,279 | 91% |
| Others | 287,665 | 292,839 | 2% |
| Total | 842,259 | 1,017,056 | 21% |
The statistics are based on the numbers published by Eurostat. The product Softwood lumber consists of following HS Codes: 440710.
Booming Chinese particleboard market
Currently, production of particleboard in China is mainly concentrated in Shandong, Hebei, Jilin, Jiangsu, Fujian, Guangdong and Guangxi provinces. There more than 700 enterprises producing particleboard with an output capacity of around 25 million cubic metres. Most of particleboard production lines are Chinese made. Plants utilizing imported production lines mainly found in Guangdong, Guangxi, Fujian, Jiangsu and Hebei provinces.
China's particleboard industry has been developing rapidly in recent years and output increased to 25.6 million cubic metres in 2011 from 6.4 million cubic metres in 2003. In the domestic market particleboard is used mainly for kitchen, office and bedroom furniture, truck decks, packaging and, when surfaced, interior decoration industry. Consumption of particleboard is highest in Guangdong where 2013 consumption was over 8 million cubic metres or around a third of the national total.
International trade in particleboard
China's particleboard imports totalled 381,400 tonnes valued at US$128 million in 2013, up 8 percent in volume and 9 percent in value from 2012. The main suppliers were Germany, New Zealand, Switzerland, Belgium and Australia.
Particleboard exports totalled 169,800 tonnes, valued at US$88.36 million in 2013, up 26 percent in volume and 40 percent in value respectively from 2012. The average unit price for exported particleboard was US$520 per cubic metre, a year on year increase of 11 percent.
The main markets for China's particleboard were Russia (43 000 tonnes), Mongolia (25 800 tonnes) and Tadzhikistan (19 200 tonnes). The main provinces o f exporting particle board in 2013 were Shandong (65 200 tonnes), Heilongjiang (25 600 tonnes), Inner Mongolia (25 400 tonnes), Xinjiang (20 900 tonnes), Jiangsu (15 400 tonnes), Guangzhou (6 400 tonnes), Zhejiang (2 600 tonnes), Shanghai (2000 tonnes), Fujian (1 600 tonnes) and Hubei (1 500 tonnes).
German wood pellets cheaper due to the mild winter
In May, the price of wood pellets in Germany has decreased on average by EUR 7/tonne, as the German Energy Wood and Pellet Association (DEPV) reports. The price for a tonne of pellets is currently EUR 250.48; per kilogram -EUR 25.05 cents; or 5.01 cents per kilowatt hour (kWh). Thus, wood pellets are cheaper by 2.6% over April and 5.1% over May 2013. Compared to fuel oil, pellets have a price advantage of around 38%.
In addition to the decline in prices, also the production of pellets in Germany has decreased significantly in the first quarter. Production totaled 447,000 t, which is 17% or 92,000 t less than the same period of 2013. This negative development is not surprising in view of the recent mild winter, notes DEPV CEO Martin Bentele. "Since pellets are used in Germany exclusively for heating, a decrease in production is the natural consequence of a milder winter," says Bentele. The production volume is now just above the amount of the first quarter of 2011.
In the first quarter, sawmill residues accounted for 82.8% in the production of pellets in Germany. The use of industrial wood was 17.2 %. About 99% of the pellets are used for the provision of heat produced in small and medium-sized systems (grades A1 and A2). 85% of domestic production in the first quarter was consumed within the country, and almost 15% exported.
Metsä plans an EUR 1,1 billion bioproduct mill
Metsä Fibre, part of Metsä Group, has launched an Environmental Impact Assessment (EIA) procedure related to a bioproduct mill planned in Äänekoski, Finland. The EIA procedure will address the environmental impact of the bioproduct mill planned for the existing mill area of Metsä Group in Äänekoski, and consistently taking the impact into account in planning and decision-making.
The bioproduct mill planned by Metsä Fibre will, if implemented, cost about Euro 1.1 billion, and it would be the forest industry's largest investment ever in Finland. The mill's pulp production capacity is 1.3 million tonnes per year. The goal is to build the mill in the existing pulp mill area and it would replace the mill currently operating in the area. The final investment decision on the mill construction will be made in early 2015, which means that the bioproduct mill could be operational in 2017.
Canadian company reaches 1,5 mil. tons wood pellet capacity
The Canadian company Pinnacle Renewable Energy has begun construction of its seventh pellet plant in British Columbia, as the Biomass Magazine reports. With the new plant, Pinnacle will reach a total wood pellets output of 1,5 million metric tons.
Pinnacle’s pellet plant will be built adjacent tot the Lavington sawmill owned by Tolko Industries Ltd. The investment will reach approximately $39 million and will have an annual capacity of 250,000 metric tons. Most of the production will go to the industrial pellet export market.
Pinnacle Renewable Energy Group produces and supplies wood pellets in Canada and the United States. The company serves customers in Europe, North America, and Asia. The six operational mills that the company already owns in British Columbia have an annual capacity of around 1,1 million metric tons, which according to the company, comprise 56% of Canada's total wood pellets production.
Investments in the Finnish forest industry on the rise
In the first quarter of the year, the Finnish forest industry exports and production showed signs of recovery, according to the Finnish Forest Industries Federation (FFIF). Also, new investments were announced.
“UPM’s announcement regarding an investment at its Kymi pulp mill started off a series of investment news. Metsä Group’s Äänekoski investment and Stora Enso’s Varkaus investment, both announced in April, confirm that the sector has a strong desire to revitalise itself and to grow as well as strengthen its position in the bio-economy market,” says Director General of the Finnish Forest Industries Federation, Timo Jaatinen.
The Finnish Forest Industries Federation’s member companies bought 8.5 million cubic metres of timber from private forests in January-March. This is 25% more than in the corresponding period in 2013. Log and pulpwood procurement volumes increased to 3.9 million and 4.3 million cubic metres respectively. In stumpage prices there were no major changes.
Finland's forest industry’s development and the realisation of its investments require sufficient, steady and cost competitive timber availability in the long-term, says FFIF.
Demand for Finnish wood products showed signs of recovery in some European countries while the strong demand seen in Asia last year tailed off. Domestic demand was very low due to the low level of residential construction.
Finland's wood products production in the first quarter of 2014 totalled about 2.7 million cubic metres, which is five per cent higher than last year. Plywood production amounted to approximately 310,000 cubic metres, which is 15 per cent more than in January-March 2013. Export deliveries in January-February in both product segments were higher than in the previous year.
Boost in British softwood lumber imports
British imports of sawn and planed lumber have increased in value by 33% or almost EUR 50 million in the first two months of 2014, according to the latest figures provided by Eurostat. Imports from the European Union countries, which represent more than 90% of all UK softwood lumber purchases, grew by 32% as compared to January-February 2013. Notably those from Sweden (+42%), Finland (+18%) and Latvia (+51), the first three main UK suppliers.
Though with lower values, imports from Russia almost doubled in the period mentioned, while those from Canada rose by 43%.
In terms of market shares, Sweden remains by far the largest softwood lumber supplier for the UK. In January-February 2014, Sweden delivered more than 50% of all British imports, followed by Finland (14%), Latvia (12%) and Ireland (5%).
| UK imports of softwood lumber (in EUR); Top 10 Origins | January-February 2013 | January-February 2014 | Change in % |
| Sweden | 69,718,480 | 98,780,680 | 42% |
| Finland | 23,491,880 | 27,646,290 | 18% |
| Latvia | 16,429,661 | 24,835,630 | 51% |
| Ireland | 11,117,720 | 10,545,490 | -5% |
| Russia | 5,058,890 | 9,000,590 | 78% |
| Germany | 7,801,980 | 8,024,220 | 3% |
| Canada | 3,449,360 | 4,939,500 | 43% |
| Czech Republic | 1,949,480 | 2,559,250 | 31% |
| Estonia | 2,252,780 | 2,449,240 | 9% |
| Norway | 1,784,790 | 1,752,830 | -2% |
| Total imports from EU countries | 136,373,920 | 179,645,390 | 32% |
| Total imports Worldwide | 147,808,520 | 196,460,540 | 33 % |
The statistics are based on the numbers published by Eurostat. The product Softwood lumber consists of following HS Codes: 440710.
Sweden: Lumber exports increase in February
In February, Swedish lumber exports have increased significantly both over January as well as compared to the same month last year. In February alone, 1.02 million cubic meters of softwood sawn and planed timber were exported. In January , there were just under 953,000 cbm, while in February 2013 just above 889,000 cbm. By the end of February, 1.98 million cubic meters were exported, 12.4% more than in the same period last year.
Particularly, exports to Egypt have increased. Also exports to the UK, the major destination for Sweden's timber, rose sharply. Shipments to China and Belgium recorded significant gains, though at lower levels. To Germany were supplied about 157,700 cbm, 5 % more than in the same period last year.
Not only the volume but also the value of deliveries has increased compared to the same period last year. In the first two months, the average value of exports amounted to 1817.30 SEK / cbm.
| Country | II 2013 (1.000 cbm) |
II 2014 (1.000 cbm) |
Change |
| UK | 357.0 | 438.8 | 22,91% |
| Egypt | 94.7 | 268.9 | 183,95% |
| Germany | 150.2 | 157.7 | 4,99% |
| Netherlands | 126.1 | 136.9 | 8,56% |
| Norway | 140.1 | 129.1 | -7,85% |
| Denmark | 117.9 | 128.8 | 9,25% |
| Japan | 153.0 | 128.4 | -16,08% |
| Algeria | 91.9 | 84.9 | -7,62% |
| China | 55.0 | 80.6 | 46,55% |
| Belgium | 47.0 | 60.5 | 28,72% |
| France | 66.2 | 59.7 | -9,82% |
| Morocco | 71.8 | 48.7 | -32,17% |
| Saudi Arabia | 56.5 | 44.0 | -22,12% |
| Poland | 23.2 | 24.2 | 4,31% |
Recovery in Austrian lumber prices
In April, softwood lumber prices in Austria rose again after a slight decrease in March. The 1-2 EUR/cbm declines in March were recouped substantially. Except edged and rough boards, all assortments have become more expensive by about 1 EUR/cbm. Rough boards' price has stagnated over the previous month, while edged boards are cheaper by 1-2 EUR/cbm.
As compared with April 2013, all softwood assortments are more expensive. Particularly, prices for edged boards and large-sized boards have increased the most. Both registered a price surge of around 5 EUR / cbm.
| Softwood Lumber Spruce/Fir | Apr. '13 | Mar. '14 | Apr. '14 | Change Apr. '13 to '14 € / cbm EXW |
| Edged Boards, 0-IIIa, 23 mm + | 229-243 | 235-248 | 234-246 | +5 / +3 |
| Rough boards in fixed dimensions, 18-22 mm | 227-239 | 230-240 | 230-240 | +3 / +1 |
| Squared timber, standard dimensions, I/II, 4-6 m | 208-218 | 209-218 | 211-219 | +3 / +1 |
| Reserve squared timber, II/III | 151-160 | 154-160 | 155-161 | +4 / +1 |
| Boards, III-IV, 8-16 cm, 4-6 m | 144-150 | 147-154 | 146-153 | +2 / +3 |
| Boards, III-IV, 8-16 cm, just 4 m | 146-152 | 149-155 | 150-156 | +4 / +4 |
| Boards, III/IV, 23 mm, 4-6 m | 147-153 | 149-155 | 150-156 | +3 / +3 |
| Boards, III/IV, 28 mm +, 3-6 m | 152-159 | 156-164 | 157-165 | +5 / +6 |
Mixed price movements for Swedish logs
In the first quarter of 2014, roundwood prices in Sweden show some mixed results: pine sawlogs are cheaper by EUR 0,95 per cubic meter over the previous quarter, while spruce sawlogs are EUR 1,75/cbm more expensive than Q3/2013. Pulpwood prices declined within the range of EUR -0,53/cbm, down to EUR -1,45/cbm for birch.
On a yearly basis, in the first quarter of 2014, there are some discordant results: sawlogs price grew by 1,33%, up to 3,44%, while pulpwood assortments are now cheaper by -5,07%, down to -8,38%.
Roadside prices of roundwood in Sweden EUR/m³ u.b. |
Q1 2013 | Q4 2013 | Q1 2014 | Change Q1/2013 to Q1/2014 |
| LOGS | ||||
| Pine | 49,54 | 51,15 | 50,20 | 1,33% |
| Spruce | 52,64 | 53,54 | 55,29 | 5,03% |
| Pine&Spruce | 51,42 | 52,51 | 53,19 | 3,44% |
| PULPWOOD | ||||
| Pine | 30,52 | 29,50 | 28,97 | -5,07% |
| Spruce | 32,84 | 31,44 | 30,52 | -7,06% |
| Birch | 30,30 | 34,29 | 32,84 | -8,38% |
| Pulpwood Total | 32,35 | 31,21 | 30,30 | -6,33% |
The above results are collected from metla.fi
