27 October 2010

5th International Softwood Conference: Slightly positive development on the softwood sawn timber markets

Results from the market discussions at the 5th International Softwood Conference.

Softwood sawn timber markets are again going into the right direction, as delegates at the 5th International Softwood Conference held in Zürich on 21 and 22 October found when discussing the latest market developments and forecasts. Recovery from the strong drops in 2008 and 2009 is going slowly, however, and the balance between offer and demand remains fragile still.
130 delegates from 21 countries, all with a profound interest in softwood sawn timber, either as producer or user, gathered on 21 and 22 October in Zürich for the 5th International Softwood Conference. An organisation of the European Organisation of the Sawmilling Industry, EOS, and the European Timber Trade Federation, ETTF, this year’s event was hosted by Holzindustrie Schweiz.
The Chairman of Holzindustrie Schweiz, Member of the Federal Parliament, Mr Jean‐François Rime, was pleased to welcome his colleagues to Switzerland, a small, but not less important part of the international wood community.
Experts from Europe, Russia, North America and Australia highlighted developments in the main producer and consumer markets. A statistical report was presented by Mr Ed Pepke, the FAO/UNECE timber committee marketing specialist.
A central theme in the reports by Messrs Von Moeller (ETTF chairman), Olle Berg (Stora‐Enso), Marc Brinkmeyer (Idahoforestgroup) and Russell Taylor (Wood Markets inc.) was the strong drop in demand, and lower production volumes, for sawn timber products in the years 2008 and 2009 in particular.
Within the ISC community, production dropped by 12.1% from 2007 to 2008 and by 14.5% from 2008 to 2009. Consumption fell respectively by 13.7 and 16.8%. In absolute terms, this meant a production volume of 168 mio m³ and a consumption of 138 mio m³ in 2009. Recovery from these low levels has started in 2010, but at a very moderate pace. The main reason for these slow improvements is the low degree of activity within the construction sector, the performance of which is still far beyond what it used to be in the past years.
On the other hand, renovation of existing buildings is continuing as before and likely to increase due to the growing age of current buildings.
For 2010 the following volumes are forecast: production 177.7 mio m³ (+5.8%) and consumption 145.8 mio m³ (+5.5%).
Delegates warned against too much optimism as regards 2011, though they expressed confidence in a further recovery of the sawmilling markets as the future outlook for wood remains good.
The Green building trend is likely to provide for further opportunities for the softwood sector, provided one can come to objective and unbiased rating schemes.
Concern was expressed over the continuous price rises of the wood raw material. Several countries reported record prices for sawlogs, impacting strongly on the profitability and competitiveness of the sawmills, due to the low offer of wood on the market at present. Under the current market situation, these high costs could only be recuperated partly through the sales prices.
Next to specific market issues, the delegates also discussed other issues impacting the softwood sawn timber business, such as the financial crisis, the development of new types of engineered wood opening up new markets, transportation logistics, the ecological and environmental benefits from using wood, the need for legal and sustainably produced wood and promotion activities.
The participants are convinced about the advantages and opportunities offered by wood and wood products, also in the light of the current climate change debate. Calls were made, therefore, to step up co‐ordinated wood promotion and education activities supported by producers and consumers alike at a European and international level. Discussions on how this could be achieved should soon start between representatives of the respective organisations.
Presentations on these and related subjects were given by Mr Hans Kaufmann, Member of the Swiss National Council, Mr André de Boer, Secretary General of the ETTF, Mr Markus Tilling from Mayr‐ Melnhof Kaufmann, Mr Rankl from DB Schenker, Lignum Director Christoph Starck and Hary Gras, MD of Houthandel Gras.
With this 5th edition, the International Softwood Conference has clearly established itself as the annual discussion and meeting platform for those interested and involved in sawn softwood across the globe.
The next edition will be held in Copenhagen on 20 and 21 October 2011.