international softwood markets 2005 – 2007
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International Softwood Markets 2005 – 2007. Overview of market trends through 2005 Forecasts for 2006 and 2007. Ed Pepke, Ph.D. Forest Products Marketing Specialist Food and Agricultural Organization & UN Economic Commission for Europe Geneva, Switzerland. Topics. - PowerPoint PPT PresentationTRANSCRIPT
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International Softwood Markets
2005 – 2007Overview of market trends through 2005
Forecasts for 2006 and 2007
Ed Pepke, Ph.D.Forest Products Marketing SpecialistFood and Agricultural Organization &UN Economic Commission for Europe
Geneva, Switzerland
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Topics
I. Softwood forest resourcesII. Framework for market developmentsIII. Sawn softwood market developmentsIV. Softwood sawlog marketsV. Recap of UNECE Timber Committee
findings and issues from 3-4 October 2006
VI. Recap of UNECE/FAO Forest Products Annual Market Review, 2005-2006 findings
VII. Conclusion
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Info sources
• EOS, UCBR and Timber Committee forecasts
• UNECE/FAO TIMBER Database• UNECE/FAO Forest Products Annual
Market Review, 2005-2006• UNECE Timber Committee Market
Discussions– Expert presentations– Official market statement
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UNECE vs. ISC “Europe”
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UNECE vs. ISC “Europe”
Additional “non-ISC” UNECE region productionin million m3:Turkey 4.0Poland 3.5Slovakia 1.5Estonia 2.2Lithuania 1.0Ireland 0.9Bulgaria 0.8Others 1.8Total: +15.7
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UNECE vs. ISC “Europe”
“Non-ISC” forecast additional million m3 in 2007:
Consumption 16.0
Imports 4.6
Exports 4.2
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I. Forest resources
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Softwood commercial forests
0
50
100
150
200
250
300
Europe N. America Russia
123152
268
Source: UNECE/FAO Forest Resources Assessment
Million
hecta
res
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Forest area, net change
Red>5% annual decreaseGreen>5% annual increase
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Forests’ growing stock
0
10
20
30
40
50
60
70
Europe (41) North America CIS
Growing stock Net annual increment Fellings
sBillion
m
3
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Net annual growth vs. fellings
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Europe (41) N. America CIS
Net annual increment Fellings
Billion
m
3
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Forests’ net annual increment vs. fellings
Fellings as% of NAI
North America 80%
Europe-42 60%
Western Europe
64%
Nordic countries
72%
Baltic countries
50%
Central & eastern Europe
56%
Russia 16%
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Resources summary
• Removals considerably below growth• Growing stock increasing in Europe• Shortages of sawlogs in some countries• Southern hemisphere plantations
expanding• Increasing alternative demands on
forests• Oversupply compared to demand
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II. Framework for market developments
• Global economic growth strong in 2006 and 2007, forecast at 5% each year
• Developing countries’ economies growing fastest – dynamic expansion in E. Europe
• Inflation low, despite rising energy prices• Housing prices rising for 5 years – bubble
to burst?
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Economic framework – US
• US housing peaked in 2005– 2.2 million housing starts– “Only” 1.8 million starts in 2006
• Huge volume of unsold houses in US• Record high trade deficit• High national deficit• US economy decelerating – risk of
recession
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China’s economic boom
0
20
40
60
80
100
120
140
2000 2001 2002 2003 2004 2005 2006
$ B
illio
n• +60% trade surplus 2005/2004
• +25% trade surplus 2006/2005
• Rapid economic expansion, 10% in
2006
• Major engine for global growth
• Strong import demand for oil and raw
materials, including wood
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China’s wood market influence
0
50
100
150
200
250
300
350
400
450
500
1997 1998 1999 2000 2001 2002 2003 2004 2005
Inde
x 19
97=1
00
Exports Imports
• Largest wood products exporter
• 2nd largest importer• Greatest softwood log
importer• Concern for legality• Some certified products• Huge capacity
expansion• Furniture exports up
33% annually• Reshaping marketplace
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Economic framework – European housing
• Residential construction rising since 2004
• Rising interest rates • Strongest construction developments in
central and eastern Europe– Residential +4% 2006, +7% 2007– Source: Euroconstruct, 2005
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Market drivers
• Public procurement policies• Expanding wood energy• Certified forest products• Corporate social responsibility• China’s surging trade• Rebound of eastern Europe & Russia• Illegal logging & trade• Storms in 2005: Sweden and US
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III. Sawn softwood – UNECE’s Europe
0
20
40
60
80
100
120
Mill
ion
m3
Consumption Production Exports Imports
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Sawn softwood – UNECE’s Europe, 1998-
2007
0
20
40
60
80
100
120
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports Imports
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Sawn softwood – ISC’s Europe
0
10
20
30
40
50
60
70
80
90
100
1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Mill
ion
m3
Consumption Production Exports Imports
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Sawn softwood – ISC’s Europe, 1998-2007
0
10
20
30
40
50
60
70
80
90
100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports Imports
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Selected importers’ forecasts
0100020003000400050006000700080009000
2003 2004 2005 2006 2007
1000
m3
UK Germany France Netherlands Spain Belgium
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Photo: Stora Enso 0
2000
4000
6000
8000
10000
12000
14000
2003 2004 2005 2006 2007
1000
m3
Sweden Finland Germany Austria Latvia Czech
Selected exporters
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0
5000
10000
15000
20000
25000
1000
m3
2003 2004 2005 2006* 2007*
Germany Sweden Finland Austria France
Selected producers
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0
500
1000
1500
2000
2500
3000
3500
4000
1000
m3
2003 2004 2005 2006* 2007*
Czech Latvia Romania Norway Switzerland
Selected producers
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Sawn softwood – Russia
0
5
10
15
20
25
30
35
40
45
50
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports Imports
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Sawn softwood – Russia, 1998-2007
0
5
10
15
20
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports
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Sawn softwood – N. America
0
20
40
60
80
100
120
140
1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Mill
ion
m3
Consumption Production Exports Imports
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Sawn softwood – North America, 1998-2007
0
20
40
60
80
100
120
140
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports Imports
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Effects of US downturn
Europe to USA
NA to Europe
Source: WOOD Markets Monthly, 2006
• Quebec exports, production• Europe’s exports to US• Search for alternative
markets
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III. Softwood sawlogs – Europe
0
50
100
150
200
250
300
1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Mill
ion
m3
Consumption Production Exports Imports
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Softwood sawlogs – Russia
0
20
40
60
80
100
120
140
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports
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Sawlogs – N. America
0
100
200
300
400
500
600
1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Mill
ion
m3
Consumption Production Exports Imports
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Sawlogs – N. America
0
100
200
300
400
500
600
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mill
ion
m3
Consumption Production Exports Imports
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IV. E.O.S. questionnaire results on prices, costs and sawlog availability
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Sawnwood prices
End 2005 Mid-2006 End 2006
100%
Russia
USA
Europe
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Log, energy, transport costs – Europe
End 2005 Mid-2006 End 2006 Mid-2007
Energy
Transport
Softwood logs
100%
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Log, energy, transport costs – USA
End 2005 Mid-2006 End 2006 Mid-2007
100%
Softwood logs
Transport
Energy
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Log, energy, transport costs – Russia
End 2005 Mid-2006 End 2006 Mid-2007
100%
Softwood logs
Transport
Energy
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Sawlog availability
0
1
2
3
4
5
Russia USA Europe
high
low
normal
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V. Timber Committee Market Discussions –
main findings• European markets forecast at record levels
in 2006 and 2007• Chinese forest industry rapidly reshaping
marketplace• Continuing concern about illegal logging,
climate change• Record high energy prices and energy
policies driving wood energy markets• Despite forest growth outstripping removals,
increased competition for timber
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Timber Committee sawn softwood
findings• Volatile sawnwood prices in North
America falling, but rising in Europe• Beetles ravaging forest in BC, Canada
– up to 1 billion m3 timber – glut of roundwood, sawnwood
• US/Canada softwood lumber dispute resolved with 7-year agreement: $4 billion duties returned to Canada
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Timber Committee sawn softwood
findings• European consumption at record level, to
increase 2% in 2006 and again in 2007• Shortages of sawlogs in parts of Europe
where prices low, demand high and sawmilling capacity increased
• Russian sawnwood production to rise 5% in 2006 and 7% in 2007; increases to exports
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Timber Committee softwood sawlog
findings• Roundwood removals at record highs
meeting strong demands• 2006 storm damage in Sweden resolved,
with some roundwood stocked in forests• Roundwood prices rising in Europe, private
forest owners selling
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VI. Forest Products Annual Market Review
findings• 2005 was a stellar year for sawn
softwood• But may be the high-water mark• Opposing developments in Europe,
both growth and contraction, in 2005• Western Europe remains a net
exporter,strong export markets 2005
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Forest Products Annual Market Review findings
• Expanding EU: log market prices converge quickly with European prices, reducing profitability for eastern sawnwood producers
• Russia continues expanding sawnwood output (up 5.3%) and exports (up 19.5%) in 2005, gaining market share in many export markets
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Forest Products Annual Market Review findings
• Russian Forest Code not yet adopted• Russia raises log export taxes --
catalyst for expanding sawnwood?• Record US demand and prices for
sawnwood in 2005 as a result of low interest rates and a soaring housing market
• US housing peaked late in 2005, new housing forecast to decline by a total of 13% through 2007
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Forest Products Annual Market Review findings
• Swedish windstorm in early 2005 ramped up log availability, sawnwood exports
• Government-imposed harvest reductions in Ontario and Quebec affect sawmills’ raw material availability
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VII. Growing the market
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Growing too much wood?
Not enough wood products demand?
What are the solutions?
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International Softwood ConferenceQuebec, Canada, 19-20 October 2006
Photo: NTC
Photo: Stora Enso
Photo: Stora Enso
Grow the wood markets !
• Guarantee that today’s wood products meet consumers’ needs
• Develop new products to meet evolving needs
• Develop new markets for wood products: substitute for non-renewable materials
• Promote wood culture outside N. America and Nordic Countries
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International Softwood ConferenceQuebec, Canada, 19-20 October 2006
Photo: NTC
Photo: Stora Enso
Photo: Stora Enso
How can we grow the wood markets?
• Build coordinated, international promotion programs
• Enlarge existing networks and coalitions• Create favorable policy environments• Promote public awareness of key issues
and messages
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International Softwood ConferenceQuebec, Canada, 19-20 October 2006
Photo: NTC
Photo: Stora Enso
Photo: Stora Enso
Discussion
![Page 56: International Softwood Markets 2005 – 2007](https://reader035.vdocuments.us/reader035/viewer/2022062321/56813d4c550346895da706bb/html5/thumbnails/56.jpg)
International Softwood ConferenceQuebec, Canada, 19-20 October 2006
Photo: NTC
Photo: Stora Enso
Photo: Stora Enso
Ed PepkeForest Products Marketing Specialist
UNECE/FAO Timber Section448 Palais des Nations
CH-1211 Geneva 10, SwitzerlandTel. +41 22 917 2872Fax +41 22 917 [email protected]
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International Softwood ConferenceQuebec, Canada, 19-20 October 2006
Photo: NTC
Photo: Stora Enso
Photo: Stora Enso
N. American sawn softwood price trends
Source: Random Lengths, 6 October 2006