International Softwood Markets 2005 – 2007 Photo: Stora Enso Overview of market trends through 2005 Forecasts for 2006 and 2007 Photo: Stora Enso Ed Pepke, Ph.D. Forest.
Download ReportTranscript International Softwood Markets 2005 – 2007 Photo: Stora Enso Overview of market trends through 2005 Forecasts for 2006 and 2007 Photo: Stora Enso Ed Pepke, Ph.D. Forest.
International Softwood Markets 2005 – 2007 Photo: Stora Enso Overview of market trends through 2005 Forecasts for 2006 and 2007 Photo: Stora Enso Ed Pepke, Ph.D. Forest Products Marketing Specialist Food and Agricultural Organization & UN Economic Commission for Europe Geneva, Switzerland International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Topics Photo: Stora Enso Photo: Stora Enso I. II. III. IV. V. Softwood forest resources Framework for market developments Sawn softwood market developments Softwood sawlog markets 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Info sources Photo: Stora Enso • EOS, UCBR and Timber Committee forecasts • UNECE/FAO TIMBER Database • UNECE/FAO Forest Products Annual Market Review, 2005-2006 Photo: Stora Enso • UNECE Timber Committee Market Discussions – Expert presentations – Official market statement International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC UNECE vs. ISC “Europe” Photo: Stora Enso Photo: Stora Enso International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC UNECE vs. ISC “Europe” Photo: Stora Enso Photo: Stora Enso Additional “nonISC” UNECE region production in million m3: Turkey 4.0 Poland 3.5 Slovakia 1.5 Estonia 2.2 Lithuania 1.0 Ireland 0.9 Bulgaria 0.8 Others 1.8 Total: +15.7 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC UNECE vs. ISC “Europe” Photo: Stora Enso “Non-ISC” forecast additional million m3 in 2007: Consumption 16.0 Imports 4.6 Photo: Stora Enso Exports 4.2 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC I. Forest resources Photo: Stora Enso Photo: Stora Enso International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Softwood commercial forests 300 Photo: Stora Enso Photo: Stora Enso Million hectares 250 268 200 150 100 123 152 50 0 Europe N. America Russia Source: UNECE/FAO Forest Resources Assessment International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Forest area, net change Photo: Stora Enso Photo: Stora Enso Red>5% annual decrease Green>5% annual increase International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Forests’ growing stock 70 Photo: Stora Enso Billion m3 60 50 40 s 30 20 Photo: Stora Enso 10 0 Europe (41) Growing stock North America Net annual increment CIS Fellings International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Net annual growth vs. fellings 1 0.9 Photo: Stora Enso Billion m3 0.8 0.7 0.6 0.5 0.4 0.3 Photo: Stora Enso 0.2 0.1 0 Europe (41) N. America Net annual increment CIS Fellings International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Forests’ net annual increment vs. fellings Photo: Stora Enso Photo: Stora Enso 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% International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Resources summary Photo: Stora Enso Photo: Stora Enso • • • • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC II. Framework for market developments Photo: Stora Enso Photo: Stora Enso • 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? International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Economic framework – US • US housing peaked in 2005 – 2.2 million housing starts – “Only” 1.8 million starts in 2006 Photo: Stora Enso Photo: Stora Enso • • • • Huge volume of unsold houses in US Record high trade deficit High national deficit US economy decelerating – risk of recession International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC China’s economic boom 140 120 100 $ Billion Photo: Stora Enso • +60% trade surplus 2005/2004 • +25% trade surplus 2006/2005 • Rapid economic expansion, 10% in 2006 80 • Major engine for global growth 60 • Strong import demand for oil and raw 40 Photo: Stora Enso materials, including wood 20 0 2000 2001 2002 2003 2004 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2005 2006 China’s wood market influence 500 • 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 450 400 Index 1997=100 350 Photo: Stora Enso 300 250 200 150 Photo: Stora Enso 100 50 0 1997 1998 1999 2000 2001 Exports 2002 2003 2004 Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2005 Economic framework – European housing Photo: Stora Enso Photo: Stora Enso • Residential construction rising since 2004 • Rising interest rates • Strongest construction developments in central and eastern Europe – Residential +4% 2006, +7% 2007 – Source: Euroconstruct, 2005 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Market drivers Photo: Stora Enso Photo: Stora Enso • • • • • • • • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC III. Sawn softwood – UNECE’s Europe 120 100 Million m3 80 Photo: Stora Enso 60 40 20 Photo: Stora Enso Consumption Production Exports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 06 04 20 02 20 00 20 98 Imports 20 19 96 19 94 19 92 19 90 19 88 19 86 19 84 19 82 19 80 19 78 19 76 19 74 19 72 19 70 19 68 19 66 19 19 64 0 Sawn softwood – UNECE’s Europe, 1998-2007 120 100 Photo: Stora Enso Million m 3 80 60 40 Photo: Stora Enso 20 0 1998 1999 2000 2001 Consumption 2002 2003 Production 2004 2005 Exports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2006 Imports 2007 Sawn softwood – ISC’s Europe 100 90 80 Photo: Stora Enso Million m3 70 60 50 40 30 Photo: Stora Enso 20 10 0 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Consumption Production Exports Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Sawn softwood – ISC’s Europe, 1998-2007 100 90 80 70 Million m3 Photo: Stora Enso 60 50 40 30 Photo: Stora Enso 20 10 0 1998 1999 2000 2001 Consumption 2002 2003 Production 2004 2005 Exports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2006 Imports 2007 Photo: Stora Enso Photo: Stora Enso 1000 m3 Selected importers’ forecasts 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 UK 2003 2004 2005 Germany France Netherlands 2006 Spain International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2007 Belgium Selected exporters 14000 Photo: Stora Enso 1000 m3 12000 10000 8000 6000 4000 2000 Photo: Stora Enso 0 2003 Sweden Finland 2004 Germany 2005 Austria 2006 Latvia International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2007 Czech Selected producers 25000 Photo: Stora Enso 1000 m3 20000 15000 10000 5000 Photo: Stora Enso 0 2003 Germany 2004 Sweden 2005 Finland 2006* Austria International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2007* France Selected producers 4000 3500 Photo: Stora Enso 1000 m3 3000 2500 2000 1500 1000 500 Photo: Stora Enso 0 2003 Czech 2004 Latvia Romania 2005 Norway 2006* Switzerland International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2007* Sawn softwood – Russia 50 45 40 35 Million m3 Photo: Stora Enso 30 25 20 15 Photo: Stora Enso 10 5 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Consumption Production Exports Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Sawn softwood – Russia, 1998-2007 25 20 Million m3 Photo: Stora Enso Photo: Stora Enso 15 10 5 0 1998 1999 2000 2001 2002 Consumption 2003 Production 2004 2005 Exports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2006 2007 Sawn softwood – N. America 140 120 100 Million m3 Photo: Stora Enso 80 60 40 Photo: Stora Enso 20 0 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Consumption Production Exports Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Sawn softwood – North America, 1998-2007 140 120 Photo: Stora Enso Million m3 100 80 60 40 Photo: Stora Enso 20 0 1998 1999 2000 2001 Consumption 2002 2003 Production 2004 Exports 2005 Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2006 2007 Effects of US downturn Europe to USA Photo: Stora Enso • Quebec exports, production • Europe’s exports to US • Search for alternative markets NA to Europe Photo: Stora Enso Source: WOOD Markets Monthly, 2006 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC III. Softwood sawlogs – Europe 300 250 Photo: Stora Enso Million m3 200 150 100 Photo: Stora Enso 50 0 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Consumption Production Exports Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Softwood sawlogs – Russia 140 120 100 Million m3 Photo: Stora Enso 80 60 40 Photo: Stora Enso 20 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Consumption Production Exports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Sawlogs – N. America 600 500 400 Million m3 Photo: Stora Enso 300 200 Photo: Stora Enso 100 0 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Consumption Production Exports Imports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Sawlogs – N. America 600 500 Photo: Stora Enso Million m 3 400 300 200 Photo: Stora Enso 100 0 1998 1999 2000 2001 Consumption 2002 2003 Production 2004 2005 Exports International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC 2006 Imports 2007 Photo: Stora Enso IV. E.O.S. questionnaire results on prices, costs and sawlog availability Photo: Stora Enso International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Sawnwood prices Europe Photo: Stora Enso Russia 100 % USA Photo: Stora Enso End 2005 Mid-2006 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC End 2006 Log, energy, transport costs – Europe Photo: Stora Enso Softwood logs Energy Transport 100 % Photo: Stora Enso End 2005 Mid-2006 End 2006 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Mid-2007 Log, energy, transport costs – USA Energy Photo: Stora Enso Transport 100 % Softwood logs Photo: Stora Enso End 2005 Mid-2006 End 2006 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Mid-2007 Log, energy, transport costs – Russia Energy Transport Photo: Stora Enso Softwood logs 100 % Photo: Stora Enso End 2005 Mid-2006 End 2006 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Mid-2007 Sawlog availability Photo: Stora Enso Photo: Stora Enso International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC V. Timber Committee Market Discussions – main findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Timber Committee sawn softwood findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Timber Committee sawn softwood findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Timber Committee softwood sawlog findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC VI. Forest Products Annual Market Review findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Forest Products Annual Market Review findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Forest Products Annual Market Review findings Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Photo: Stora Enso Photo: Stora Enso 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Photo: Stora Enso VII. Growing the market Photo: Stora Enso International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Growing too much wood? Photo: Stora Enso Photo: Stora Enso Not enough wood products demand? What are the solutions? International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Grow the wood markets ! Photo: Stora Enso Photo: Stora Enso • 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 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC How can we grow the wood markets? Photo: Stora Enso Photo: Stora Enso • Build coordinated, international promotion programs • Enlarge existing networks and coalitions • Create favorable policy environments • Promote public awareness of key issues and messages International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Discussion Photo: Stora Enso Photo: Stora Enso International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC Photo: Stora Enso Photo: Stora Enso Ed Pepke Forest Products Marketing Specialist UNECE/FAO Timber Section 448 Palais des Nations CH-1211 Geneva 10, Switzerland Tel. +41 22 917 2872 Fax +41 22 917 0041 [email protected] International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC N. American sawn softwood price trends Photo: Stora Enso Photo: Stora Enso Source: Random Lengths, 6 October 2006 International Softwood Conference Quebec, Canada, 19-20 October 2006 Photo: NTC