Softwood Export Council Newslett

Summary of 2x4 Starts in May 2008
Total	8,406 units	5.0%
Single Family	2,421 units	-2.3%
Rental Units	4,473 units	16.5%
Company Housing	8 units	-76.5%
Speculative Housing	1,504 units	-9.2

Northern Europe Market Report

BY Eddie Pearce
The economies across the EU 15 continue to be affected by the financial environment the whole world appears to be encountering. This situation continues to affect the timber industries in the region, with overall demand for wood continuing to drop as a result of a slowdown in the building and construction of houses. The only sector that appears to holding ground is the renovation and refurbishment sector.

Two major timber producing countries in Europe, Sweden and Finland, are reporting a significant drop in exports of sawn lumber , ie 9.8% and 17.0% respectively.

The present situation is not helped by the fact that there is an over supply of Whitewood (Spruce) in the market. This specie is primarily used house in construction in Europe. This is resulting in lower prices from the sawmills.

Table 1 shows the level of exports of US softwood lumber to the EU up until March 2008.
As can be seen from the table there has been a downturn in levels over the last quarter in a significant number of EU countries.

Table 2 shows the level of exports of US softwood flooring. This shows a slight increase todate.

IMPORTS OF U S SOFTWOOD LUMBER BY COUNTRY:						APRIL
==========================================================
COUNTRY	2005	2006	2007	2007YTD	2008YTD		% Chg

AUSTRIA	225	0	0	0	0
BEL/LUX	7,177	8,075	3,904	1,185	1,647		39.0
DENMARK	1,139	1,231	1,644	536	389		-27.4
FRANCE	6,365	9,941	6,869	2,238	3,357		50.0
GERMANY	5,590	9,538	8,968	2,471	1,772		-28.3
GREECE	2,649	3,025	3,147	1,172	289		-75.3
IRELAND	3,111	6,044	2,457	988	786		-20.5
ITALY	21,660	21,111	18,546	7,692	8,371		8.8
NETH.	5,952	3,918	6,934	2,398	3,814		59.0
PORTUGAL	4,457	6,894	3,451	828	618		-25.4
SPAIN	72,678	79,496	45,774	19,918	8,873		-55.5
SWEDEN	1,227	667	1,536	596	440		-26.2
U K	18,077	26,288	89,771	66,575	7,414		-88.9

TOTAL EXPORTS	154,302	176,424	193,114	107,428	38,803		-63.9

Imports of Softwood Flooring $(ooo)
COUNTRY	2004	2005	2006	2007	2007YTD	2008YTD

EU 15	864	859	1076	2655	195	1259
BELGIUM/LUX	8	8	0	46	37	0
DENMARK	87	40	55	4	4	46
FRANCE	0	0	4	43	43	28
GERMANY	123	105	29	502	0	90
GREECE	0	0	0	0	0	0
IRELAND	93	79	257	852	30	113
ITALY	0	0	0	215	59	193
NETHERLANDS	62	0	42	508	22	0
PORTUGAL	0	0	0	14	0	0
SPAIN	0	51	104	0	0	0
SWEDEN	170	11	81	0	0	465
UNITED KINGDOM	109	411	506	459	0	325

United Kingdom:

House building in the UK continues to slow down. New house orders for the period 3 months up to February are down by 22.0% and new completions are down by 7%. This has resulted in a fall in the demand for timber.

The number of new homes built by National House Builders Association (NHBC) during the period Dec. 2007 - Feb. 2008, was 35,780 units were built, compared with 45,643 during the same period in 2006-2007.

In a recent report in Random Lengths International, it stated that the surge in exports of SPF to the UK have all but gone and it is due to the fact that buyers have gone back to Scandinavian suppliers.

This conclusion in Random Lengths cannot be whole correct, as Sweden and Finland's exports to UK have decreased YTD in March by 10.4% and 6.0% respectively to 682,900m³ for Sweden and 188,683m³ for Finland.

The more like reason for this decrease in exports to the UK is due to the significant drop house building activity that has taken place over the past 3 months.

Germany:

A casualty of the slowdown in the timber industry which is taking place in Germany at present, is the Klausner Group who have gone into receivership. This company was a major exporter to the U.S.A. of sawn softwoods, but have, since the housing downturn in the U.S. had difficulty finding a home for their production.

France:

During recent attendance at the Carrefour International du Bois in Nantes opportunity was made to hold discussions with a number of members from the timber industry. According to them, the situation was that while the previous few months for the timber industry had been very good there were signs that the French economy was slowing down and this has been reflected in downturn in demand for wood and wood products.

Despite this negative view, attendance at the show proved successful with many visitors coming to the booth and significant contacts were made.

Belgium-Luxemburg:

This region seems to going against the trend. Imports of U.S. softwoods have continued to increase. The specie which is having the most significant improvement is Southern Pine at 425% increase with Douglas fir not far behind at 201% compared with the same period in 2007

Southern Pine is primarily used for interior finishing such as flooring and skirting boards and also stairs. Historically Douglas fir has been used in house construction as open roof beams. This increase suggests that U.S. Douglas fir, which over the past few years had lost out to French Douglas fir.

The Netherlands:

The Netherlands also seems to be enjoying a resurgence with Douglas fir leading the way with increased exports running at over 700% increase compared with the same period in 2007.

A similar situation exists for Southern Pine which is nearly 300% up on last year.

As is the case in Belgium, Southern Pine is used in interior applications. However, Douglas fir in the Netherlands is mainly used for windows and doors.

Upcoming Trade Shows and Seminars

September