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UK BID TO REVIVE HARDWOOD CONSUMPTION

It has long been the case in the UK that hardwood has been the poor relation of wood species. Consumption, which has never been high compared with other wood types, has over recent years seen a sharp fall.

To counter this a conference was set up to encourage suppliers, end users, specifiers and architects to realise the full potential of this product and to bring it to the fore when it comes to specing materials for new builds, including fixtures, fittings and furniture.

One way to achieve this higher profile is to focus on the environmental, sustainable and durable qualities of this underlooked product.

The aim of the conference is to implement a new drive in market awareness.

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JAPAN IMPORTS LESS

Wood is the traditional building material of Japan and yet imports from North America and Canada were down last year.
This in fact was the third consecutive year that this has happened.
All the major lumber species, beloved by Japanese construction showed a decline, namely Douglas Fir, Sitka Spruce, Yellow Cedar and Hemlock.
At one stage last year it seemed that SPF lumber, which has no direct equivalent, seemed to be the industry saviour, but in the second half of last year demand for new housing starts fell and as a consequence so did SPF demand.

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DECLINE OF FINAL FELLING NOTICES IN SWEDEN

Final felling notices for ‘Notified Areas’ fell slightly in 2016 compared with 2015. The big picture shows that 20 of the 21 countries listed showed a decline in their overall figures. Their decline may well have occurred in only one or two of that country’s regions whereas in Sweden all four of its regions were subject to decline.

It is interesting to note that applications for final felling in montane and broad leaf forest final felling actually increased.

Could this be a case of ‘Those who have it don’t use it whereas that who don’t have it want to use it!’

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RECORD IMPORTS FOR CHINA

After a poor 2015 for soft wood lumber imports into China, 2016 has shown an increased demand in this product. Imports were up by nearly a quarter on the previous year’s figures, which is a substantial figure.

So from an exporter’s point of view which countries have been the big winners?
By far and away it is Russia and Europe, each of whom have increases of over 40 percent on last year’s figures. In the case of Russia this is due to the weakness in the Ruble and tariffs on other lumber which has made their soft wood so financially appealing.

The looser in this is the USA who’s exports to China has fallen slightly.

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US HOUSING HAS A POOR START

From a good December US housing starts fell in January.
Looking closely at December’s figures we find that starts were unexpectedly high for both single and multifamily construction.
Even with the seasonally adjusted overall results starts were down.
In some regions of US production increased however the big picture still showed a fall.
The good news is that the industry expects 2017 to be a good year with both single and multifamily construction stabilizing and then show a gradual increase.

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AFRICAN TIMBER. A TALE OF TWO MARKETS

Sapele ,Padouk, Okoume and Okan are not perhaps the first woods you would think of using for a project but they are amongst the staple timbers of both Central and West African forest economies.
In Europe the demand for these woods has fallen. Much like last week’s report European buyers are reluctant to import more stock as they find that their current reserve is as they say static, even with the carrot of price incentives.
Meanwhile in Asia the market for these timbers remains lively with both China and India leading the way. As a result export prices for Sapele and Padouk in to Asia are firm.
The government of Gabon has tried to encourage more investment into downstream industries such as furniture production. Two major problems have been pointed out by the timber companies: Very small demand domestically and high export taxes. Taxes impeding business growth, who would have considered that!

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FRENCH PALLETS AND PACKAGING

Normally we talk about logs, floor boards, construction materials, wood pellets or forest management but today we are going to be looking at an equally important part of our industry, pallets and packaging and what is happening to this sector in France.

French producers of pallets and packaging have seen orders for their products decline. The trend seems to be that customers are placing orders on a day to day basis rather than building up their own stocks. At the beginning of 2016 considerable investment was put into the industry in the belief that demand would grow, in fact the opposite has happened.
The knock on effect has been that sawmills supplying packing boards and assortments have seen profits fall.

It would seem that this current situation will last a while longer. The demand for these products is still there it is the reluctance of consumers to keep stock which is causing the problem.

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Vietnam wood dilemma

As from the 1st January this year the government of Vietnam has closed what is referred to as the ‘natural’ forests as opposed to the ‘plantations.’

So what is the reason for this? Well it boils down to supply. The supply in question is for domestic use. The problem that Vietnam has is that domestic businesses, manufactures, are crying out for raw material in order to grow but growth is restricted because the majority of Vietnamese logs go for export.

There have been calls for a levy on exported logs but it would seem that the government want to restrict and control supply in favour of domestic manufacturers. Currently only ¾ of the amount of logs they use are home grown. The remaining quarter has to be imported which of course will increase the price of the end product.

The government’s solution does seem to be a genuine attempt to help business.

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US HOUSING ON THE RISE

It is expected that there will be a continuous rise in US house building in 2017. Industry experts expect that favourable conditions will be put in place to build on the platform of success enjoyed in 2016.

The mortgage rate is expected to remain stable while regulatory costs are expected to fall. All good. However the main area of concern is builder/labourer recruitment which needs to be stepped up.

The growth they are talking about is in the single family home sector, in other words not multiple occupancy developments. While projections as we have said on new builds is good it must be pointed out that construction growth would be even larger if more building plots and construction loans were available to the industry.

The need is obviously there, as is the steady growth but is the willingness to grow the sector much, much bigger?

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INDIA TO REFORM WOOD INDUSTRY

In an effort to create greater transparency and to eliminate fraudulent practice India’s state forest department is to launch on line licencing for wood based industries. Licences for working with wood is not a new concept to the country they already exist for tree felling and NOC’s.
The system will allow current licence holders to renew on line. This will not only be an easy and convenient way to update the legality of each business but it will also allow the government to achieve transparency in a sector notorious for the selling on of licences. With the new system the government will be able to track them.

From an environment point of view the on line licences will insure that wood industries are located at an appropriate distance from existing ‘units,’ and establish new ‘units’ where they are need.

It hoped these new licences will help wood prices and in turn create a healthy wood sector for India.

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