Wood treated pedestrian bridge in Southern Spain, length 820 feet
January
- March 2004
Overview of the Spanish Timer Sector
The timber trades in Spain and Italy during 2003
Pressure Treated Lumber: A Growing Market in Spain
Spanish Window Market News: Production and Trends in
2003
Highlights of recent events
Planned Activities
A difficult first quarter in the timber trades,
specially in Italy following a depressed 2003 is inducing traders to be cautious.
An increase of prices for logs and ultimately sawn lumber in Scandinavia may
make feel importers more positive , specially towards the second half. The
Spanish market showed a high activity level with a strong increase in softwoods
but unfortunately US products did not enjoyed it, despite a more attractive
price levels in Euro.
A relevant market is starting to develop along the
Spanish coasts for treated lumber. Under the pressures to a) use more
extensively wood and wood products by the local administrations for
recreational areas and b) widely diffused consciousness of the problems
associated with tropical hardwoods, particularly from Africa; it is gaining
momentum the specification of treated softwoods in a large variety of
applications.
After the government change in Spain following the
general elections on March 14th ,
there is a feeling of a complex political situation imbricated with
specific problems to the wood trading. Coniferous traders are being affected by
generalized low prices level. Those dealing with tropical lumber are actively
seeking alternative species but with little success for the moment. Temperate
hardwoods markets evolve under the strong Chinese pressure (demand) for oak and
cherry, forcing prices up, linked to the reluctance of the market to accept
alternative woods.
According to the Spanish Importers Association, the
Spanish economy fared satisfactorily in 2003. The increase in new dwelling
construction prompted the demand (growth) of wood products, in virtually all
type of timbers. The evolution of the different types of imported wood products
was in 2003:
Sawn softwoods: + 14,8%
Tropical logs: - 1,7%
Tropical sawn: + 2,3%
Oak sawn: + 2,3%
Beech sawn: + 7,6%
Broad leave veneer: + 29%
Tropical veneer: + 14,2%
All that growth has been taken up by traditional
Spanish market suppliers and new players, i.e., Chile, Brazil and several
central and Eastern European countries.
Softwood lumber markets are at present subdued by low prices.
During the last Softwood Conference in Paris, an European forest products
multinational forecasted a general overproduction scenario, which the present
situation has confirmed months later. Tied to larger than average inventories
in the distributors hands and a quiet demand in the respective domestic markets
in Europe with a slight trend downwards, there are forecasts of a weakening
demand giving way to less than average sales and skinny margins for the
importer. Throughout 2003, there has been a maintained lose of Swedish sales of
around 6%, from 9.3 million m3 to 8.9 for thee first 9 months relative to the
figures in 2002. Sales in Europe show a lost of 4% with only gains in Spain,
Ireland, and Denmark. Loses elsewhere, with Germany, -18% leading the group.
Italy , -5%,importing around 250,000 m3. Sales also went poor in Japan, -7%.
Finnish exports were also heavily affected with an overall –4%, and the fall of the European markets, -6.1%,
where only the UK, Spain and Greece saw positive figures.
Sweden produced 16.7 million m3 of sawn softwoods (16 million
in 2002), where exports made up for 11.3 million(11.5 in 2002). Major export
destinations of this lumber were the UK 2.65 m (2,44 in 2002), Denmark 1.3
(1,32), and Germany 0.89(1,16). Spain and Italy received 0.62 and 0.33 million
cubic meters respectively. The
breakdown by class of this lumber by species and surface finishing was: sawn
spruce (3.2 m), pine (3.9 m) and planned timber (3.9 m) According to the
intended use of this lumber, most goes into construction (47%), followed by packaging (19%) and mouldings
(9%).
The Finnish production follows closely their
Scandinavian neighbors with special strong presence in Japan, destination of
10% of its exports. In 2003 production reached 13,6 million cubic meters, a 3%
increase over 2002, of which 65% was
sold abroad. Europe is the largest market with the UK being the number one
destination with 18% of sales followed by Germany 10%, the Netherlands 7% and
the rest of European markets absorbing 15% of the export volumes. Spain took
0,2 million cubic meters in 2003 and Italy 0,22 m. m3
Redwood lumber (pinus sylvestris) price is moving
down, despite temporary upsurges. Unsorted grade moves as low as 270 euro/m3
with peaks up to 400,fifth grade planks achieve 200 Euro and 6th is
in offer at 170. Accordingly, several producers are announcing a slow down of
the production to contain the price deliquescence. Whitewood (picea abies)
remains stable with a smooth increase forecasted in the near future, because
major forest groups have sold out the output excess. In Aeim’s opinion, a
shortage of large logs should be expected in Finland; the announced reduction
of sawn lumber production in this country along April 2004 will contribute to
the strengthening of prices. However, in 2005, the endorsement of new tax
legislation in the Scandinavian country, in the form of a direct log sale tax,
will prompt many forest owners to speed up sales along the current year. It is
likely that log offers will pick up with a negative impact on prices for the
Spanish importer. New sawmilling capacity, in the opinion of the experts, in
several Eastern European countries does not seem to impact at this time the
activity in the Russian or Scandinavian plants. As for US lumber imports provisional
data for the first two months of 2004 show a light trend down (-4%) due
probably to the strengthening of the dollar occurred through the last months.
Dealers of competing tropical lumber are seeking for alternative
species due to increasing supply problems. Traditional supplying countries in
Africa, where the legal logging is under tight control of the administrations
do not produce regularly because of new methods of forest logging implemented.
The continuation of local wars in thee region add obstacles for a regular
trading. On the other hand, the demand for a traditional species, Sapelli has
weakened to the point that many importers fear that African sawmills will
privilege their contacts in Asia displacing the trade in Spain. Iroko demand
exceeds the supply by far, consequently today it is generally agreed it is
highly overvalued. In addition, the exporter in Africa rather prefers to sell
its logs instead of sawn because it generates a larger and faster income, which
in turns is another added problem for the sawmill and later for the importer.
This situation may make to reconsider the situation by the carpenter, given the
current scarcity of iroko and the price, back into Southern Pine. There are
also difficulties to obtain other species. Finally, proposed alternatives are
not finding enough acceptance for different reasons.
The situation regarding temperate hardwoods is mixed
with high competition for oak from different importing countries but also it is
hopped that the new East European production may soften the expectations of a
price rally
Highlights of the import balance in Spain during 2003
were:
- Total
lumber import value estimated in 1,29 billion Euro
-
An all time record of softwood volume imported at 2,45
million cubic meters, or 32% of the imports
-
The USA is the main supplier of forest product in
value, representing 22%, Finland is the second with 18%.
-
45% of the lumber imported is produced within the
boundaries of the EU area, particularly after the access of ten new members in
May 1st.
-
A sensible reduction of the tropical sawn lumber
imports, by –5%, while still increasing oak and beech (+7%)
-
Veneer imports growing fast (+25%) particularly
temperate hardwoods.
According to the Spanish Timber Importers Federation,
US lumber imports fell by 1/3 of the volume in 2002 but actual figures supplied
from the Spanish Custom Services suggest they held virtually equal as the
previous year in volume.
From these data it can be concluded that despite a
healthy growth of the softwood imports in Spain last year, American products merely held at the
previous year volume despite a more competitive position due to a weaker
dollar. It is interesting to examine the value of the imports. US softwood
lumber imported during 2003 was valued in 39 million Euro, a similar volume in
year 2002 was valued in 46 million Euro, Swedish imports for example grew by 4%
and the value increase was over 16%, suggesting a definite preference for this
type of wood by Spanish users. Another aspect noteworthy is the number of
operations crossed. In this aspect US exporters served 2617 orders, by far the
largest, the average order for US softwoods was 43,32 cubic meters, 65,29 cubic
meters for Brazilian lumber and 366,62 m3 for the average Swedish
order(for a total of 1384 operations crossed).
Finland, Russia and Germany are actively increasing
their supplies to the Spanish market, while France and Sweden saw a modest
growth and Portugal even a small loss. It is also the first time Austria
appears in the statistics as an active supplier. The Austrian Promoholz
organization has targeted Spain as a promissory field on the grounds of
retaining a strong demand for solid wood products presently and in the short
and medium term. The activity in construction is expected to continue strong (
over 8% at least) until 2008.
Softwood Lumber
(m3)
|
|
2003 |
2002 |
% |
|
Total |
2.407.009 |
2.131.522 |
13 |
|
Sweden |
507.404 |
489.356 |
4 |
|
France |
379.700 |
362.869 |
5 |
|
Portugal |
340.393 |
344.524 |
-1 |
|
Finland |
310.038 |
254.238 |
22 |
|
Russia |
151.367 |
109.636 |
38 |
|
Germany |
145.924 |
113.845 |
28 |
|
USA |
114.611 |
113.385 |
1 |
|
Brazil |
113.858 |
74.104 |
54 |
|
Chile |
80.995 |
70.307 |
15 |
|
Poland |
53.407 |
51.685 |
3 |
|
Rumania |
36.420 |
23.800 |
53 |
|
Latvia |
24.909 |
21.895 |
14 |
|
Austria |
22.949 |
9.445 |
143 |
Source:
Spanish Federation of Chambers of Commerce
It can be concluded that the Spanish industry and
construction sectors demanded larger volumes of imported softwoods during 2003
but the US industry did not capture at least an equivalent share of the volume
increase, rather the opposite.
The main supplier to the Italian market, Austria, had
a decrease of exports in 2003 following the general trend of
lumber imports. Year 2003 closed in a depressed market with a – 5.1% fall.
Other traditional partners like Germany and Sweden had even worse results with
–16 and –14 %. Only new suppliers like Brazil had significant gains, it is also
worth noting the surprising upspring of Canada with a 28% growth over past
year. The main species demanded in Italy from the USA continues to be Douglas
Fir, with hemlock being of secondary importance. Unfortunately, Southern Pine
is increasingly being ignored by the industry and the market, overcome by the
quality of finger joint laminated material successfully introduced in the last
two or three years. There are today excellent products from Russian/Baltic
softwood sources. Mostly vertical grain pine (Pinus Sylvestris), larch and some
spruce. It is also rather common the use of a three ply 3 x 3 ½” window
scantling made from vertical grain pine with finger jointed faces. Grain and
texture are matched probably with an optical scanner and the joints are hardly
noticeable with the bare eye after a semitransparent stain is applied, it is
available in versatile long lengths blanks. For clear grade solid window stock
it is preferred the use of tight grain scantlings like old growth Western
species. And where knotty pine is acceptable, Scandinavian pine (again tight
grain material) with a dark brown semi transparent stain has been found as an
acceptable choice instead of Southern
Pine. Hemlock took some of this back because of its excellent staining
characteristics. However, since recently brown stains appear to have withered to make place for the lighter colors of
European spruce and clear vertical grain Baltic/Siberian /Eastern pine
|
Softwoods
Imports in Italy |
2002 |
2003 |
% |
|
Austria |
3.518.390 |
3.311.009 |
-5,9 |
|
Belarus |
27.463 |
21.346 |
-22,3 |
|
Brazil |
16.175 |
23.760 |
46,9 |
|
Canada |
57.217 |
73.572 |
28,6 |
|
Finland |
231.150 |
222.680 |
-3,7 |
|
Germany |
853.922 |
712.216 |
-16,6 |
|
Poland |
31.890 |
35.922 |
12,6 |
|
Romania |
39.321 |
52.976 |
34,7 |
|
Russia |
380.494 |
444.585 |
16,8 |
|
Slovak Rep. |
65.749 |
66.093 |
0,5 |
|
Sweden |
255.385 |
217.555 |
-14,8 |
|
Switzerland |
82.447 |
86.035 |
4,4 |
|
Ukraine |
100.857 |
117.492 |
16,5 |
|
USA |
35.534 |
31.720 |
-10,7 |
|
Czech Republic |
123.554 |
104.053 |
-15,8 |
|
Total |
5.819.548 |
5.521.014 |
-5,1 |
The door market is somehow changing towards a more
ample use of wood species. Accordingly,
it has been noticeable the introduction of Douglas Fir for doors observed
during the recent show Saiedue 04 and also the publicity found in the wood
press on Brazilian Elliotti pine doors intended for the Italian market. As a
marketing bonus it was outlined the use of FSC certified lumber in the manufacturing.
The increasing environmental consciousness is driving
the demand of exterior use lumber from tropical hardwoods to softwoods. A
growing demand from local administrations ( namely the municipalities) for the
use of lumber in public open areas is prompting the introduction of treated
wood in walkways, marinas, parks, golf courses (many projects of this kind are
planned for the next years specially in Southern Spain) and a myriad of public
places where a fragile ecosystem or little impact of implantation is needed.
The use of softwoods is being considered as a means of compliance with their
own environmental policies, adequate response to questions from environmental
groups and cost factors alike. The implantation of those facilities are favored
by the existence of a regular supply from different countries in Europe and the
presence of local distributors. It is noteworthy the use of redwood (pinus
sylvestris) glulam headers in a project completed recently, probably from
Swedish origin. (cover photography)
Supplying temporary
service constructions to the beaches along the extensive Andalucian
coast like showers, gazebos, bars, storage rooms, dune walkways, involved the
use of treated lumber. This market is just now initiating, and the trend is to
increasing volumes due to the novelty of its use, the little impact on these
fragile areas and their seasonal usage.
The majority of coastal areas have not been furnished yet with beach
facilities. Current consumption of waterborne treated lumber is estimated in
50,000 cubic meters, annually, in Spain. Part of it is provided by domestic
treaters, but the major portion is being imported from a variety of sources:
France, Denmark and Sweden, principally. Local treating industry is more
focused in the industrial and agricultural applications. The construction,
decking and DIY sector remain practically untouched, whereas there is already a
consistent demand.
Due
to the recent EU directive, the use of CCA treatment will be restricted to a
few industrial applications, and starting in June 2004 other non arsenic
compounds will be used instead for products intended for the consumers. The
industry is in the process of adapting facilities but all together there are no
expectations that the Spanish treating industry will have enough capacity to
cope with the expected demand and therefore ample opportunities exist for
exterior suppliers. It is probably in the decking and marine applications where
more opportunities exist at this time.
During 2003 Spanish window production reached a 10% of
the total European production, becoming the second producer in the EU. Last
year 11,5 million units were manufactured, of which 71% used aluminum, 17%
wood, 10% Pvc and 2% were mixed of several compositions. Altogether these
figures show a stabilized situation regarding the breakdown by materials, but
it must be noted strong regional differences, with the Northern region using
much more wood windows than in other regions. Quite the opposite, in the
touristical regions and for touristic uses, the trend is towards an increasing
use of non wood frames for windows as shown in the picture. The window in the
picture is a mock wood frame and shutter, pvc wrapped aluminum. This is a
reflection of the appealing of wood for
the majority of users..
Window manufacturers continue to face increasing
difficulties to use the tropical species iroko, but for the time being no clear
alternatives are found. According to a door and window manufacturer in Manacor,
Mallorca, today only 5% of their production is manufactured on Southern Pine,
while several years ago it was predominant. A near collapse of the Southern Pine market and the changes in
preferences has led to the substitution in a very short time. Reasons being the
poor outdoor performance ( must be noted that no adequate finishing treatment
was provided) causing an early deterioration of the appearance and in extreme
cases decay of elements, the high
occurrence of seasoning checks in the raw window stock impairing their
use for window frames and a for a number of years, the strength of the dollar
rising the price of the raw material to the level of tropical hardwoods. There
is no doubt that this situation forced
the substitution by the carpenters.
American Softwoods participated in the show Saiedue
2004 taking place in Bologna, Italy. Interested visitors received information
on US species grades suitable for carpentry and window manufacturing. The
presence in this show is of interest for the industry because it is the best
opportunity to learn about changes in the industry and to promote directly to a
number of window manufacturers also exhibiting at this show. In addition to the
traditional use of hemlock and Douglas Fir for window frames and shutters, this
year several prototypes of Douglas Fir doors could be seen at two door
manufacturers booths. This may not be significant alone but at least shows some
opening for the use of coniferous species in interior doors, never observed
before in this market. On the pine presence, it could be observed a reduction
of the presence of wood products using Southern Pine lumber. The competition
from European softwoods in the same applications with improved technology ( see
comment above on finger jointed window stock) is gradually reducing the
use of Southern Pine for windows and
shutters.
The American Softwood’s stand was manned with the help
of a SEC representative and the support
of the UK office staff.
A seminar on the proper finishing of softwoods in
exterior carpentry is being arranged with the architects professional
association in Barcelona for April 1st. This is intended to
counterbalance a negative state of opinion o the use of Southern Pine in
exteriors. Premature failure of exterior carpentry has won a dubious reputation
for this species. This activity will address this topic and how it is overcome
today with the latest protective finishing methods.