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Above left: Delegates attended from across Europe and worldwide Above right: Demand for softwood has been unprecedented PHOTO:ILIM TIMBER
Addressing EU softwood consumption, ETTF softwood chair Morten Bergsten said the market had exceeded expectations, with predictions of a 4 million m3
rise this year
and a further 1.5% growth next. Across Europe, a common theme was strong demand from a construction sector underpinned by government fiscal support and putting increased emphasis on building in wood. In Italy tax incentives are expected to drive residential construction, while Denmark, the Netherlands and France were highlighted as being particularly focused on wood-based building. In the latter, a new regulation for 2022 will require 50% of public construction project materials to be bio-based.
Mr Bergsten concluded that the European softwood sector would enter 2022 in “good shape”. “Although we see some continued market imbalances; the increase in consumption exceeding output growth and greater awareness of the importance of using more wood accompanied by increasing emphasis on protecting more forest,” he said. Don Kayne, CEO of forest product giant
Canfor, said the North American softwood industry had experienced “big shocks” through the pandemic, but was now seeing “lumber mania” in the US. The result was extreme price volatility, with 1,000 bd ft of SPF lumber peaking at US$1,630 in May before dropping back to US$575 this autumn. “Covid resulted in mill curtailments and reduced softwood supply couldn’t meet the boom in DIY and suburban house construction demand,” said Mr Kayne, adding that, while below the heights of 2021, prices are expected to remain above historical levels. On the demand side, US housing market fundamentals remain strong.
“Home ownership is predicted to grow at 1.5% annually as millennials and generation Z enter their prime house buying years,” said
Mr Kayne. “It’s clear the current 1.6 million annual housing start rate must increase.” Another plus for North American softwood was increased construction of engineered wood-based tall timber towers, with 1,060 now completed or planned in the US. Vladimir Eresko, woodworking division sales director of Seghezha Group, said Russian sawn softwood production is forecast at 39.9 million m3 m3
in 2021 and exports 29 million
, with 56% going to China, 17% to former Soviet republics, 12% to Europe and 5% to MENA markets.
Exports to China declined this year, partly due to north-west mills experiencing shipping shortages and diverting sales to Europe. Next year, however, this is expected to reverse.
RUSSIA’S LOG EXPORT BAN Mr Eresko said expectations were that Russia’s log export ban, aimed at boosting value-added timber production and set for introduction in January, would be total. According to Anna Ni of Business Finland’s China office, a key trend in the Chinese softwood sector was the ongoing shift to importing softwood log from sawn timber due to the price differential. In 2020 the country’s log imports hit 47 million m3
, while sawn
softwood imports contracted 12.6% to 25 million m3
.
“This year we expect this trend to be more pronounced, with sawn imports from January to July 27% lower at 11.18 million m3 log imports rose 31% to 29.1 million m3 said Ms Ni.
, while ,”
John Herbert of the EDRA and GHIN said his organisations’ members – a total of 216 companies worldwide, comprising 32,000 DIY and home improvement stores – were confident their surge in business in 2020/21 would not be a temporary phenomenon. They see it as the start of a permanent shift to greater home expenditure, with many
consumers reluctant to return to working in offices full-time and also “millennials discovering home improvement”. To cater to this evolving market, said Mr Herbert, the home improvement retail sector would increasingly transition to click-and- collect and online trading, with the internet expected to account for 30-40% of sales in a decade. The focus would also be on product sustainability and “one planet living”, opening the way to greater wood use. “Timber is already a very important product for us, with sales in German home improvement stores for instance, worth €1.5bn in 2020, or 5.7% of their total, an increase of 16.5% on 2019,” said Mr Herbert, adding that his organisations would be keen to work with the timber industry to increase the DIY trade’s expertise in and sales of wood. Giving the perspective of the European timber pallet and packaging sector, which consumes 19 million m3
of sawn softwood
a year, or 20% of European production, Rob van Hoesel, president of industry association FEFPEB, said producers are increasingly opting for kiln-dried timber. This is to combat mould and stain, but also to reduce the carbon footprint of transporting raw material. To help meet demand, he urged sawmills to also kiln falling boards.
On rising softwood prices he asked suppliers and buyers alike to take into account that 70-75% of a pallet maker’s turnover goes on timber.
“So a few euros per cubic metre increase can make the difference between profit and loss,” said Mr van Hoesel. ■
FURTHER INFORMATION Report courtesy of the
European Timber Trade Federation (
www.ettf.info)
www.ttjonline.com | November/December 2021 | TTJ
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