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EUROPE. THE WORLD’S MOST EXPENSIVE FIBER.

Recent figures have revealed that Europe’s plup manufactures have the most expensive hardwood fiber production costs in the world. So what is the cause? Well, a number of factors are at work: firstly the wet and mild winter of 2017. Secondly, as a result, the cost of importing chips.

While there will always be winners and losers in production costs, for example Spain at the top end and Sweden at the lower end, the overall picture is one of spiralling costs.

The same is true of softwood chips and pulpwood, Finland the most expensive while Norway’s prices are lower.

From a downward price trend over the past five years, the end of 2017 saw prices rise.

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CHINA. FURNITURE IMPORTS RISE

The amount of furniture that China imported in 2017 rose, with the demand highest in the cities of Shanghai, Guangdong, Beijing, Jiangsu and Tianjin. An astonishing fact is that Shanghai and Guangdong account for half of all China’s imported furniture. It is expected that this trend for imported furniture, due to high domestic production costs, will continue to grow.

While China’s production of furniture is on the rise it tends to be the low to middle end of the market. The government is trying to stimulate growth not only for domestic consumers but also I would assume for a long term vision of exports. Unlike Europe and the US china does not have a world recognised brand.

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US BUILDS MORE IN MARCH

After a fall in housing starts in February the US sector bounced back in March. The breakdown of permits shows that the revival was caused by multifamily starts whereas single family starts fell.

While not as great a revival as economists had predicted the figures are a welcome sign, a good indicator, of future demand and perhaps an insight into the changing requirements of the consumer.

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BELARUS. LICENCE TO LOG

Foreign traders currently have to apply for a license to export logs and peeled masts from Belarus to countries outside of the Eurasian Economic Union. The E.E.U is essentially post-soviet Asian republics along with the Russian federation. So at present if you are a French company based in Belarus who export to the European Union you will need a license.

However the key points in the clause which triggered this policy only applies from the 1st February 2018 until 1st July.

It is unclear if the licenses will continue after this period.

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2017 US housing starts highest since 2007

Housing starts were up 2.4% in 2017 compared to 2016 according to newly released data from the US Department of Housing and Urban Development and the Commerce Department. Total housing starts were 1.2 million in 2017. Residential construction was strongest in the West in 2017.

Over 70% of total starts were single-family homes, which is a positive signal for the economy and for wood product demand. Single-family starts grew by 8.5% from 2016, while multi-family construction fell by over 10%.

The National Association of Home Builders predicts continued growth in housing production in 2018. The association forecasts a 2.7% growth in starts to 1.25 million units in 2018.

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BRAZIL: TIMBER SLUMP

A report from Brazil shows that the production of native timber has slowed, with two northern states showing considerable declines. These figures are based on production from 2015 compared with 2016.

The production in question is for charcoal, fuel and industrial logs.
The generally held view is that this slump is due to environmental legislation being implemented and adheared to, with at caveat of shortage of labour.

It is encouraging that environmental laws are working.

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NZ AND CHINA AGREEMENT

During the first 6 months of 2017 New Zealand became the major supplier of logs and sawnwood into China. This is not just based on a half year figure but relates to year on year increases. The two countries have come up with an ‘understanding’ that has been agreed between their respective wood associations. The ‘Understanding’ aims to promote not only increased trade between them but also a sharing and cooperation of timber based technology.
This has got to be good news for both countries.

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UK. BIOMASS SUBSIDIES UNDER THREAT

The uk is looking to cut the amount it pays in subsidies to some of its energy plants that burn biomass which come under its renewable energy scheme. It must be pointed out that this will not apply to existing plants but to energy plants that are considering changing from coal. Again this is a little misleading because although the government is committed to phase out coal by 2025 it does not want ‘unforcast’ plants changing and putting additional costs on the treasury. In other words the government wants to regulate this change.

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LITHUAINA WELCOMES IKEA

By the summer of 2019 IKEA industry will open its new furniture manufacturing plant in Kazlų Rūda. The facility will produce furniture and particleboard. The factory will employ 700 workers.
Lithuania was chosen because of the availability and competitiveness of its raw materials. The new plant will not only cut waste generation but will also cut overheads.

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EU YOU FURTHER PROMOTES DOMESTIC FORESTS

In a move to encourage member states to use their domestic forests while complying with sustainability and emissions the EU has voted in favour of a series of regulations. While it may seem that another layer of interference has been put in place quite the opposite is true. The regulations will insure that best practice is continued and carried out to grantee the future of rural communities and also insures that within the EU sustainable forests are maintained for future generations.

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