Increased foreign interest in pulp mills and plantations in Australia while the timber ownership is in transitional mode, reports the Wood Resource Quarterly


The plantation ownership in Australia is in transition after the Management Investment Scheme (MIS) collapsed in 2009, reports the Wood Resource Quarterly. Foreign pension funds and pulp companies have shown increased interest in acquiring timber assets as forest plantations owners have gone into receivership.


Seattle, USA. In the aftermath of the collapsed Management Investment Schemes (MIS), plantation ownership and management of the Australian timber resources is in a transitional mode, reports the Wood Resource Quarterly. The MIS plantation scheme was launched in 1997 with the objective of pooling funds from small investors to make large investments in forest plantations. The MIS companies established, managed and marketed the timber investments on behalf of the individual investors. During the period 1997 until the partial collapse in 2009, the plantation area in Australia grew from 1.1
million hectares (ha) to about 1.9 million ha, with Eucalyptus being the preferred species planted. At that time, MIS companies managed about 75 percent of the hardwood plantations and six percent of the softwood plantations.


Since 2009, a number of MIS forest companies have gone into receivership, including the FEA Group, Great Southern Plantations, Environinvest, Willmott Forestry and Timber Corp. There are reportedly a number of timber companies and investors showing interest in taking over the management responsibility of the MIS schemes.


Unexpectedly, an investment company in the province of Alberta, Canada, recently announced it would acquire 240,000 ha of timber assets from the largest MIS company, Great Southern Plantations. The institutional investment company, AIMCo, which invests globally on behalf of pension and government funds, will partner with the Australia New Zealand Forest Fund. The new ownership may create a more stable long–term supply source for forest and energy companies located in Asia.


There is continued interest from foreign investors both to acquire pulp mills and forest plantations. The latest development is the Singapore-based pulp company APRIL, with pulp mills in Indonesia and China, which is considering the purchase of forest plantations and export chip loading facilities. The intention would be to export Eucalyptus wood chips to the company’s pulp plant in Rizhao, China.


Plantation Eucalyptus log production in the 1Q/11 was significantly higher than the same quarter last year. This development came at the same time as availability of roundwood and wood chips from natural forests declined substantially. Prices for pulplogs have not shifted much the past year in local currency, with plantation hardwood continuing to be about 24 percent higher for plantation wood compared to wood from natural forests.


Pine and Eucalyptus pulplog prices, in US dollar terms, have climbed steadily in Australia for almost two years, according to the Wood Resource Quarterly (WRQ). Prices are currently the highest ever recorded since WRQ started tracking Australian prices in 1990. During the past nine years, Eucalyptus log prices have more than tripled, with only Sweden, Spain and Germany currently having higher hardwood pulpwood prices.

Published in Oceania News

Pulpwood prices in Western US were up almost 50 percent in 2Q/11 compared to 2Q/10, while wood prices were unchanged in the US South, reports the North American Wood Fiber Review.


Wood costs for pulp mills in Western US have increased over the past 12 months, reaching their highest level since early 2008 in the 2Q/11, reports the American Wood Fiber Review. Pulp mills in the US South have slightly lower wood costs than they did in 2010, and continue to have the lowest fiber costs in North America.


Seattle, USA. Pulp mills in the Western US have seen their wood costs go up for four consecutive quarters, and this region, together with Quebec, had the highest 2Q/11 wood fiber costs in North America, according to the North American Wood Fiber Review (NAWFR).


Douglas-fir and hemlock residual chip prices in the US Northwest were up 42 percent between 2Q/10 and 2Q/11, reaching their highest levels since early 2008. Pulplog prices have increased more than for wood chips, reaching a 16-year high in the 2Q/11. Historically, the region’s pulp industry has relied on 70-80 percent sawmill residuals for its fiber furnish, but in 2011, softwood residuals accounted for approximately 55 percent of the softwood fiber receipts as reported by the Forest Products Association, with the remaining being chips manufactured from roundwood.


The current price surge in Western US has been the result of four primary factors: sawmill lumber production well below historical volumes, high pulpmill production due to strong product prices, a reopened pulpmill in the state of Washington, and strong Chinese demand for logs.


Violent storms in Mississippi and Alabama, flooding along the Mississippi River and wildfires primarily in Georgia and Texas interrupted the regular flow of wood fiber in the US South during the 2Q. The extreme conditions resulted in curtailments of a few pulpmills and chipping facilities and temporary reductions in fiber demand. To some extent, this balanced out the reduction in pulpwood production. While salvaging is difficult and more costly than ordinary timber harvesting, the sheer volume of wood that is under pressure to be brought in before it deteriorates will bring a surge of supply to the market.


Softwood and hardwood pulpwood prices in the 2Q were unchanged from the previous quarter, according to NAWFR, but can be expected to decline in the 3Q as a result of the large volume of damaged wood in the region. With other North American regions experiencing significant increases in wood costs in the 2Q, the South’s low, stable wood prices continue to make the region’s pulp industry very competitive.

Published in financial News

Wood costs for the global pulp industry have increased 17 percent the past two years; only the US South has bucked the trend, reports the Wood Resource Quarterly


Global market pulp production increased by seven percent in 2010, which increased demand for wood raw-material. As a result, prices for wood chips and pulplogs were up in most regions of the world, according to the Wood Resource Quarterly. The Softwood Wood Fiber Price Index (SFPI) has increased 16.5 percent the past two years, while the Hardwood Wood Fiber Price Index (HFPI) went up 17.7 percent.


Seattle, USA. Global pulp production in the second half of 2010 was higher than many had anticipated, and pulp markets were better than they had been the first six months of the year. The total production of chemical market pulp last year reached an estimated 45 million tons, which was about seven percent more than was produced in 2009. North America and Western Europe increased production by 10 percent and 12 percent, respectively, while Latin America/NZ reduced production slightly. Other regions including Asia, Africa and Russia also raised production in 2010.

 

High demand for wood raw-material by the pulp industry pushed the costs for wood fiber upward in the second half 2010, as reported in the Wood Resource Quarterly. Softwood chips and softwood pulplog prices were higher in most key markets around the world in the 4Q/10. As a consequence, the Softwood Wood Fiber Price Index (SFPI) increased for the third consecutive quarter. The Index reached US$103.60/odmt, which was the highest level since the beginning of the financial crisis, and the SFPI is now 16 percent above the 1Q/09 price. The biggest price increases in the 4Q/10 occurred in the US Northwest, Sweden, Spain and Brazil.

 

The Hardwood Wood Fiber Price Index (HFPI) has gone up faster than the SFPI since early 2009. The 4Q/10 Index was US$108.28, which was up 3.4 percent from the previous quarter and almost 18 percent higher than 1Q/09. The HFPI has only been higher twice since its inception over 20 years ago. Pulp mills in Germany, Spain, France and Brazil all had to pay more for hardwood logs in their local currencies. In addition, the US dollar weakened against most currencies and therefore contributed to a higher Price Index.

 

One of the few regions that experienced reductions in wood fiber costs in 2010 was the US South, with 4Q prices being about 10 percent lower than in the 1Q. Wood prices in the South were the lowest in all of North America in the 4Q/10, and pulp mills in this region have benefited from some of the lowest wood fiber costs in the world.

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    Global timber market reporting is included in the 52-­page quarterly publication Wood Resource Quarterly. The report, established in 1988 and with subscribers in over 25 countries, tracks sawlog, pulpwood, lumber and pellet prices and market developments in most key regions around the world.

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    Contact Information
    Wood Resources International LLC
    Hakan Ekstrom

    info@wri-ltd.com

    www.woodprices.com

Published in financial News

Russian log and lumber exports increased substantially in 1Q/11 thanks to higher wood demand in China, Finland and Japan, reports the Wood Resource Quarterly


The world’s largest log exporter, Russia, increased the shipments of logs in the 1Q/11 after having declined for four years, reports the Wood Resource Quarterly. Russian exports of softwood lumber have also gone up substantially, especially to China, Uzbekistan, Japan and Egypt.


Seattle, USA. Russia has for many years been, by far, the largest exporter of logs in the world. When the country announced a log export tax of 25 percent in 2007 and the intention to increase this tax to 80 percent in 2009, many forest companies in Asia and Europe decided to reduce their reliance on Russian logs. As a result, total log exports from Russia fell from 51 million m3 in 2006 to about 22 million m3 in 2009 and 2010. This downward trend, however, appears to have been broken in 2011. During the first few months, total softwood and hardwood log exports have been up by almost 40 percent compared to the same period last year, as reported in the Wood Resource Quarterly. Much of this increase in shipments has been to China, Finland and Japan. This recent upward trend can be expected to continue during 2011 and 2012, albeit less dramatically, as Russian log export taxes are reduced. During discussions between Russian and EU representatives in December last year, it became clear that Russia has been pressured to reduced log export taxes if the country wants to join the World Trade Organisation (WTO).


It is still not clear exactly what the new log export taxes may be and when they will be implemented. Softwood log taxes may fall to somewhere between 5-10 percent, and hardwood log taxes will probably be lower than those for softwood. The lower tax rates are not likely to be instigated until Russia has been recognized as a full member in the World Trade Organization (WTO), which may not be until early 2012.


Russia has not only increased its exports of logs but also of softwood lumber. From 2008 to 2010, exports were up 18 percent, reaching an all-time high of 17.5 million m3 last year, according to the Wood Resource Quarterly. So far this year, exports have been over 50 percent higher than the same period last year; 2011 may very well be a record-year. China is the largest market for Russian logs, followed by Uzbekistan, Japan and Egypt. Shipments to China tripled between 2007 and 2010; during the first quarter this year, exports were 150 percent higher than the same quarter in 2010.


The trade of logs and lumber between Russian and China can be expected to expand in the coming years because of the continued increase in demand for wood products in China and the country’s relative close proximity to Russian forests and sawmills.

Published in financial News

Lumber demand is increasing worldwide and has resulted in higher lumber prices in the 1Q/11 in the US, Japan, China and Europe, reports the Wood Resource Quarterly


Last year global demand for softwood lumber increased 18 percent after having hit a 50-year low in 2009. The rise in demand has pushed lumber prices in North America, Asia and Europe to their highest levels in ten months, reports the Wood Resource Quarterly.


Global demand for softwood lumber increased by about 18 percent in 2010. This came after a year when wood consumption worldwide was the lowest it had been in almost 50 years. This upward trend in consumption has continued thus far in 2011, with total volume consumed being more than 20 percent higher than the same period in early 2010, according to the market publication Wood Resource Quarterly.


Not surprisingly, it is China that has been the major driver in the higher demand for lumber. The country’s sawmills are far from being able to meet the increased demand, and as a result there has been a substantial increase in import volumes the past five year, from just over two million cubic meters (m3) in 2006 to 9.4 million m3 in 2010. This unprecedented rise in shipments continued the first two months of 2011 when imports were as much as 32 percent higher than in 2010.


Practically all major lumber markets in Asia, Europe and North America experienced stronger demand last year. This resulted in higher production worldwide and also increased global trade. The world’s largest importer, the US, imported seven percent more lumber in 2010 than the previous year, while imports to the third largest market, Japan, were up almost 15 percent. In Europe, shipments were up between 10 and 35 percent to the largest lumber-consuming countries on the continent.


The improved market conditions have resulted in higher lumber prices worldwide. Although the price movements have been rocky, fluctuating substantially in some markets the past 12 months, trends have been up. In the US, southern yellow pine prices were 24 percent higher in March this year as compared to last summer. Similar upward trends have been seen with Douglas-fir lumber in Western US and for spruce-pine-fir lumber in Western Canada.


In both Japan and China, import prices for most species of lumber have trended upward since early 2009, particularly for higher-grade Russian pine to Japan and lower-grade Canadian hemlock to China, as reported in the Wood Resource Quarterly


Lumber prices can be anticipated to go up in many markets during 2011 for a number of reasons, including expected increased demand in China, somewhat higher lumber imports to Japan for the rebuilding after the earthquake, and continued measured improvements in the US housing market (mainly repair & remodeling and multi-family residential housing).


Global timber market reporting is included in the 52-page quarterly publication Wood Resource Quarterly. The report, established in 1988 and with subscribers in over 25 countries, tracks sawlog, pulpwood, lumber and pellet prices and market developments in most key regions around the world.

Published in financial News

Asia’s increasing demand for wood drives sawlog prices up in the US and Canada, reports the North American Wood Fiber Review


Sawlog prices in Western US were up about 20 percent in 2010 as an result of increased competition for logs from log buyers in China, South Korea and Japan, according to the North American Wood Fiber Review. Prices for logs in the US South and Canada also moved up last year, but at a slower rate. Sawmills in Western Canada currently have some of the lowest wood costs in the world.

 


Seattle, USA. Softwood sawlog prices have trended upwards in all major regions of North America over the past two years. The biggest increases have occurred in the US Northwest, where the log export market has had a major impact on the supply-demand balance. Total log shipments to Asia from the US west coast last year were the highest they have been in 14 years, and much of this increase was the result of China’s seemingly never-ending need for wood raw-material. The US Southeast and US South Central are the sub-regions where log prices have increased the least since 2009; in fact, prices in these regions even fell slightly late last year, according to the North American Wood Fiber Review.

 


In the 4Q/10, Douglas-fir log prices in the Northwest were up 19 percent from the same quarter in 2009. Hemlock sawlog prices, which increasingly have been influenced by log exports to China and South Korea, have gone up over 25 percent the past 12 months. With the recent price increases, sawmills in the West now have higher wood rawmaterial costs than sawmills in the South, which is opposite to the situation in 2009. Price levels in the Southern states are currently close to their nadir of 15 years.

 


Sawlog prices in Canada have followed the same pattern as in the US, with prices in the Western provinces increasing more than in the Eastern provinces. In the 4Q/10, log prices in British Columbia had moved up to their highest levels in over two years in US dollar terms. Despite the increase, softwood lumber producers in the Interior of the province still have some of the lowest wood raw-material costs on the continent.

 


According to the Wood Resource Quarterly, Western Canada currently has the lowest sawlog prices in the world. In Canadian dollar terms, prices have fluctuated less in 2010 than they have over the past few years, and Western and Eastern Canada were actually two of the few regions in the world that had lower log costs in the 4Q/10 in the local currency than they did in the 4Q/08.

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    Hakan Ekstrom

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Published in financial News

Japan is in urgent need of pre-fabricated houses and manufactured wood products in the aftermath of the earthquake and tsunami that hit the country in early March. Longer term, it can be expected that imports of commodity products such as plywood, lumber and logs will increase to this country, which is already one of the largest importers of wood products in the world, according to the Wood Resource Quarterly


The earthquake and tsunami that hit Japan on March 11 is first and foremost a humanitarian tragedy that is difficult to comprehend. Over 10,000 people died during and in the immediate aftermath; more than 400,000 people lost their homes and 100-150,000 buildings were destroyed. The re-building of towns, roads, railways and the power grid in the impacted region northeast of Tokyo will be a lengthy and difficult undertaking.


Much is still uncertain regarding short-term and long-term changes in the importation of forest products as a result of the catastrophe, but the need for construction material is going to be considerable in the coming years. Initially, there have been requests from Japanese authorities and trading houses for pre-fabricated houses. There have also been inquiries for glue-laminated products and other pre-cut wood products that more quickly can be used for re-building efforts, as opposed to need for basic commodities such as lumber and plywood. To start with, the government has asked for 30,000 temporary houses within two months.


Japan is one of the largest importers of wood products in the world. In 2010, the country imported wood raw-material (logs and chips) and processed wood products valued at more than ten billion dollars, which was 20 percent more than in 2009, as reported in the Wood Resource Quarterly. Japan was the biggest importer of wood chips and plywood, the second largest importer of logs, and was ranked the third biggest importer of lumber in the world last year.


It is not likely that imports of lumber, plywood and sawlogs will increase much in the next few months before ports and access roads have been cleared and the power has been restored for at least the most basic needs. Over the next 6-12 month, it can be expected that there will be a rise in demand for both lumber and plywood. This will result in increased importation of processed products and of logs to supply domestic Japanese mills. Based on contacts already established between importers in Japan and manufacturers around the world, it is probable that there will higher shipments of softwood lumber from Canada, the US, Russia, Sweden and Finland later this year. The major suppliers of plywood will most likely continue to be Malaysia, Indonesia and China.


Japan imported 3.6 and 4.1 million m3 of softwood logs in 2009 and 2010, respectively. As the domestic forest industry increases production later in 2011, imports of logs predominantly from the US, Canada, New Zealand and Russia can be expected to increase to their highest levels in at least three years.

Published in Asian News

Wood pellet exports from the US and Canada to Europe reached 1.6 million tons in 2010, a doubling of shipments in just two years, reports the North American Wood Fiber Review


Over the past two years, North America has become a major supplier of wood pellets to Europe. In 2010, an estimated 1.6 million tons of pellets were shipped from the US and Canada to the Netherlands, the UK and Belgium, according to the North American Wood Fiber Review. This is a doubling of volume compared to 2008.


The full article can be found in the attached PDF file.....

Published in financial News

Wood costs for the global pulp industry have increased 17 percent the past two years; only the US South has bucked the trend, reports the Wood Resource Quarterly 

 

Global market pulp production increased by seven percent in 2010, which increased demand for wood raw-material. As a result, prices for wood chips and pulplogs were up in most regions of the world, according to the Wood Resource Quarterly. The Softwood Wood Fiber Price Index (SFPI) has increased 16.5 percent the past two years, while the Hardwood Wood Fiber Price Index (HFPI) went up 17.7 percent.

 

Global pulp production in the second half of 2010 was higher than many had anticipated, and pulp markets were better than they had been the first six months of the year. The total production of chemical market pulp last year reached an estimated 45 million tons, which was about seven percent more than was produced in 2009. North America and Western Europe increased production by 10 percent and 12 percent, respectively, while Latin America/NZ reduced production slightly. Other regions including Asia, Africa and Russia also raised production in 2010.


High demand for wood raw-material by the pulp industry pushed the costs for wood fiber upward in the second half 2010, as reported in the Wood Resource Quarterly. Softwood chips and softwood pulplog prices were higher in most key markets around the world in the 4Q/10. As a consequence, the Softwood Wood Fiber Price Index (SFPI) increased for the third consecutive quarter. The Index reached US$103.60/odmt, which was the highest level since the beginning of the financial crisis, and the SFPI is now 16 percent above the 1Q/09 price. The biggest price increases in the 4Q/10 occurred in the US Northwest, Sweden, Spain and Brazil.


The Hardwood Wood Fiber Price Index (HFPI) has gone up faster than the SFPI since early 2009. The 4Q/10 Index was US$108.28, which was up 3.4 percent from the previous quarter and almost 18 percent higher than 1Q/09. The HFPI has only been higher twice since its inception over 20 years ago. Pulp mills in Germany, Spain, France and Brazil all had to pay more for hardwood logs in their local currencies. In addition, the US dollar weakened against most currencies and therefore contributed to a higher Price Index


One of the few regions that experienced reductions in wood fiber costs in 2010 was the US South, with 4Q prices being about 10 percent lower than in the 1Q. Wood prices in the South were the lowest in all of North America in the 4Q/10, and pulp mills in this region have benefited from some of the lowest wood fiber costs in the world



Published in North American News

Global trade of wood chips was up in 2010 after a sharp decline in 2009 with China becoming a major importer, reports the Wood Resource Quarterly


Global trade of wood chips was up 25 percent in 2010 because of increased production of pulp and paper products worldwide. China showed the greatest growth in chip imports with an increase over 400 percent in the past two years, as reported in the Wood Resource Quarterly. Australia continues to be the major exporter and shipped 11 percent more in 2010 than in the previous year.


The full article can be found in the attached PDF file.....

Published in Press Releases
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