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expected to peak until 2022, after which time harvesting, and the proportion of damaged logs, is set to decline. “Until 2022-2023 almost 100% of logs will be damaged and harvesting will be at the 100 million m3
level,” said Mr Berg.
Europe’s harvest of logs would be “more or less flat” until 2025, he said, with not much room for growth in Sweden, Finland and central Europe.
Mr Berg’s overall conclusion was that production increases would not exceed consumption increases and that “a larger global under supply of wood” was inevitable. Nick Moore, managing director of Timber Trends presented his findings on timber trade flows to the UK.
A normal trading pattern in an average year would show an increase in Q2 and then a gradual tailing off later in the year. This all changed in 2018 when the spectre of Brexit caused a demand spike in Q4 and in Q1 2019. “The Brexit effect disrupted the normal course of softwood imports but that was small beer compared to the distortion [caused by the pandemic] in 2020,” said Mr Moore. Softwood imports were down 24% in Q2 2020, compared to 2019 but from May imports grew on the back of demand from those building sites that had re-opened and the burgeoning repair, maintenance and improvement (RMI) sector. As a result, the second half of 2020 saw an increase of more than 1 million m3
of softwood imports
compared to H2 2019 and the turnaround in Q4 – up 47% – was “truly remarkable”. Import volume increases came from “virtually everywhere”. Planed goods imports were 305,000m3
more in H2 2020 than in
H2 2019; sawn goods were up by 715,000m3 in the same comparison periods; planed pine was up 80,000m3 301,000m3
; sawn pine was up
and sawn spruce was up 314,000m3 Other sawn imports were 100,000m3
; planed spruce was up 320,000m3 .
more
in H2 2020 than in H2 2019 and combined 2020 softwood imports were up 3% on the year before (2020: 6.58 million m3 6.394 million m3
; 2019: ).
Also estimated to be up by 3% in 2020 is UK softwood production (2020: 3.4 million m3
; 2019: 3.41 million m3 ).
consumption (2020: 9.873 million m3 9.611 million m3
) – as is UK ; 2019:
Forecasting in the current climate is nigh on impossible, but Mr Moore forecast a 4% growth in softwood imports. “This is subject to debate and may be considerably higher,” he said. “The UK might breach 7 million m3
.”
The main driver of this growth is housing starts, estimated to be 159,000 in 2020 and expected to return to pre-Covid levels this year, with 202,000 starts.
The prospects of a return to normal trading patterns in 2021 were non-existent, said Mr Moore. “But hopefully the uncertainties of
Above: Housing demand is boosting the softwood market PHOTO: STEWART MILNE TIMBER SYSTEMS
www.ttjonline.com | May/June 2021 | TTJ ;
Brexit and Covid are behind us and there is a high level of optimism that we’ve turned a corner. Trading patterns will certainly be higher than in the past.”
The following four presentations focused on supply into the UK market – from Latvia, Finland, Ireland and from the UK itself. Kevin Hayes, UK managing director at AKZ Latvia, said that volumes from the country’s state-owned forests were down by 15-20% and that private growers were “reluctant fellers”, although demand for logs is incessant and the private sector is looking at “very serious price increases”. Log imports into Latvia “rocketed” by 244% in 2020. This rise has led to growth in Latvia’s remanufacturing sector.
Sawmilling capacity in Latvia is static, with no major outages caused by Covid. The industry is facing higher production costs, however, not just for logs but for energy, labour and for compliance with FSC/PEFC. Another hiccup has been a shortage of ships and containers.
“There was serious ice in January and February and a lot of the small tonnage non-ice class vessels went to the Med for richer pickings and they haven’t come back,” said Mr Hayes. “A higher level of containers has gone to the US from the Baltics and the cost has gone up enormously. Huge volumes of pulp logs are piling up at the ports and causing congestion.”
Latvia’s softwood exports to the UK at the end of 2020 were 14% up on 2019 (to 1.289 million m3
) and the country remains
committed to the UK market, but limited supply, increased domestic demand and rapid price inflation means that buyers must be prepared to pay the price.
“Structural timber prices in the UK doubled in 18 months but it’s still half of what they can get from the US market,” said Mr Hayes.
Finland’s timber production wasn’t dented by Covid and the biggest impact on output was the strike action in early 2020, said Matti Mikola, managing director of the Federation of the Finnish Woodworking Industries. Finnish sawn wood inventory was around
10% down at the end of 2020 (output 10.8 million m3
in 2020 versus 11.3 million m3 in 2020 versus 29.8 million in 2019). in
2019). And the Swedish/Finnish combined inventory was down 23% (output 29.2 million m3
Total Finnish softwood exports were down 8% in 2020 and those to the UK, which accounts for 9% of exports, were down 6%. Exports to the US increased by 135% but this was still below 100,000m3
and only
represented 1% of total exports. Finland’s domestic market saw an 8% year-on-year increase in consumption as the DIY and summer house markets boomed. The Finnish government’s target of wood construction having a 45% share of public buildings by 2025 has also boosted demand. Turning to the UK-grown sector, Keith Ainslie, sales director at James Jones & Sons outlined the production trend from the first lockdown, which had seen mills concentrating on pallet wood production, then fencing and, by the middle of the year, carcassing. “H2 pretty much made up for all of the H1 deficit,” said Mr Ainslie. “Mills would normally throttle back in the winter but that didn’t happen, so there was no stock building and by Q4 most mills had implemented allocation systems.
“Most mills also reduced their ranges and focused on volume output,” he said. There were also challenges in selling co- products as panel mills had cut production. Mr Ainslie’s estimate for UK sawmills output in 2020 is a more optimistic prediction than Nick Moore’s, at 3.6 million m3 is slated to rise to 3.8 million m3
and this in 2021. ►
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