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Softwood Export Council Newsletter
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Happy
Holidays - December 2009
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JLIA Mission 2009 |
A number of members of the Softwood Export
Council participated in the 21th US Forest
Products Industry mission to Japan in early
December. The largest group ever, 26
strong, was briefed by US Embassy staff and met
with a number of Industry and government
agencies. Governmnet meetings included Wood
Products Office of the Forestry Agency (MoAFF),
and the Housing Bureau of Ministry of Land,
Infrastructure, Transportation and Tourism (MLIT).
Industry meetings were with the Japan Federation
of Wood Industry Associations (Zenmokuren), The
Japan Federation of Housing Organizations
(Judanren), and the Japan Lumber Importers
Association (JLIA). Industry tours included a
major western lumber importer, treater,
precutter and 2x4 fabricator, a job site
inspection tour and a tour of the Toyota Prius
factory.
The Japan Federation of Housing Organizations
(Judanren) delivered statistics which showed
housing starts in 2009 should be near 800,000
units with wood structures passing the 50 %
market share. With the reduction in Japanese
population, some felt that housing starts would
not reach 1 million units again.
According to Japan Lumber Importers Association
(JLIA)
Japan is hopeful that a recovery is in order
due to a slight improvement in the US
housing market and the impact of stimulus
measures in China. However, there is still
concern over a double dip recession due to
the strengthening yen which is impacting
exports and unemployment over 5 percent.
Earnings have been impacted by reduced
revenues and imports in 2009 are expected to
finish at about half the level of 2006.
JLIA reports that imports of North American
(US and Canada) lumber have fared relatively
well declining only 25.9 %. US Douglas Fir
lumber has increased this year and is
expected to come in at 280,000 cubic meters.
The volume of SPF exported by Canada to
China has surpassed Japan, and this is
expected to widen in the years to come.
European lumber imports are up over 9
percent (Jan to Oct), but down 17 percent
compared to two years ago. Lamina volumes
from Europe continue to be affected by the
slowdown in the housing market.The 25
percent export tax on Russian logs is likely
to be maintained at current levels until
2011. This will not result in increased
imports for Russian logs as many people are
fearful that the 80 percent tariff will be
implemented over time.
The Japanese Government policy to increase
thinning as a means for carbon sequestration
has resulted in increasing supplies and
plummeting lumber prices. Self sufficiency
of domestic lumber is increasing in
Japan. Based on Government data it is 24.5
percent. The new government, the Democratic
Party of Japan (DPJ) is targeting 50 percent
self sufficiency rate through Index 2009.
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Maderalia 2009 Show and Spanish
Market
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By Ignacio Martinez
The use of softwoods from the
USA continues declining in the
Spanish market. Besides the present
general crisis situation affecting
particularly the Spanish economy and
more severely the construction
sector, there has been a lost of
market share by US softwood
products. Local wood industries,
construction managers, designers and
architects have gradually changed
the intensive use of Southern Pine
for other wood species in carpentry.
This is a consequence of changes is
style and a preference for the use
of other non coniferous wood
products in decoration. The
competition for Interior
applications by other species,
mainly hardwoods (oak, and other
tropical alternatives) has meant the
almost total replacement of Southern
Pine for interior doors and joinery
work in general. The criteria of
matching floors with cabinet doors,
base boards and interior doors has
overwhelmingly sent out of the game
this species.
American Softwoods participated
Maderalia show with its members,
PLEA and MITC. The main goal of the
American Softwoods' presence at
Maderalia was to make explicit its
commitment with the Spanish wood
community in these times of
difficulties. It was also the timing
to detect if any sensible change has
occurred or the perceptions
evolution regarding the use of Us
softwoods. It can be concluded that
despite the bitter period in which
the local industry is facing, there
are some signs that make signal the
end of the downward trend. One
importer noted that the timing was
good due to the attractive prices
and the exchange rate. Other
indirect evidences of the possible
changes of the situation were the
visits of e agents and importers to
the booth. On a more practical
approach, there have been several
positive trade leads with the timber
distribution and industry.
On a more ample overview of the
show, the number of exhibitors and
the size of displays have remarkably
inferior to the previous edition,
sign of the depressed environment.
Through conversations with a number
of industry leaders, like the door
manufacturer Norma, the projections
for next year look gloomy. Housing
starts for 2009 are estimated to
reach only around 60,000 units,
compared with the 650-700,000 of the
period 2007/2007/2008. This is a
severe contraction that has to have
an impact on the overall economy.
In the opinion of several relevant
agents and importers contacted,
there are signs of change in the
perception of the demand within the
next months. Although it may be too
early to confirm any trend, in the
opinion of several relevant
importers and agents, purchases are
being made consistently. It is
justified on the present low prices
in origin and the dollar weakness
with the Euro currency. Also the
need to restore at least inventories
of the most demanded products.
Recent price increases for European
grades and softwood species
confirmed by the Spanish Wood
Importers Association suggest that
there are tensions on the supply
side, product most likely of the
restriction of logging by the pulp
and paper industry in Central and
Northern Europe. The profitability
of the forest owner is very low at
present, and many have chose to wait
until standing log prices return to
more reasonable levels. According to
the Spanish Importers Association's
manager, there is a price rally on
the way. May importers are
considering to replenish inventories
with US products |
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2009 UAE Softwood lumber market |
By Rod Wiles
The UAE's imports of softwood lumber
have, and continue to be, severely
affected by the market's downturn
and the resultant decrease in
construction activity. Between the
first eight months of 2008 and the
same period this year, imports fell
by just over 50% to a total of
363,861 m3. With the exception of
Germany and, to a lesser extent, New
Zealand, all of the UAE's major
softwood lumber suppliers were the
worst affected by the downturn. Most
notable was Chile, whose exports of
radiata pine to the market fell by
80% over the period. While this was
partly due to production capacity
and supply issues in Chile itself,
it was mainly due to the sudden halt
in construction activity in the UAE,
which relies heavily on radiata pine
as a multi-purpose, throw-away
building product. Imports of
Romanian whitewood (SPF) were also
significantly affected, while
imports of Canadian softwoods
(principally SPF S4S) saw a decrease
of just under 55%. As with radiata
pine, low grade whitewood from
Europe is also used as a general
construction material, while S4S
from Canada is more often used for
building temporary dwellings for
imported labour and site offices,
such as Portakabins, as well as for
the internal parts of door frames
and some furniture and joinery
applications.
The reason for the obvious disparity
between import volumes of softwood
lumber from Germany and New Zealand
and the other supplying countries,
seems to be one of price. Market
commentators report that German
suppliers have become very
aggressive in marketing their
products in the UAE, while New
Zealand suppliers have been able to
supplement falling supplies from
Chile with lower priced products.
During the January to August period
of this year, total imports from the
US fell by over 95% from the same
period in 2008 and this was
principally caused by the downturn
in the market and the resultant
slowdown in the construction sector.
The timing is very unfortunate, as
2008 proved to be an interesting
year for US softwood lumber
shippers, with the widest range of
species in demand for, at least, the
previous five years. This was most
likely a result of a combination of
factors, including renewed
promotional efforts by American
Softwoods, as well as the strong
euro making some European products
more expensive than those from the
United States.
So far in 2009, the only US softwood
lumber species shipped to the UAE
has been southern yellow pine, which
has achieved some recognition in the
market for its potential as a
decking species and as a higher
quality alternative to other
softwoods. Douglas fir has also
achieved some recognition in the UAE
market, along with redwood, while
other US species are not widely
known.
Outlook for US softwoods
While lack of awareness of US
softwood species is a key issue,
there exist other barriers to wider
acceptance of US softwoods, and,
therefore, increased demand.
According to market contacts, one
significant factor is that the UAE
market is a "junk" market for
softwood products, where price is
key and quality and reusability are
secondary factors. It is clear that
US softwoods are unlikely to ever
compete with volume shipments of SPF
or radiata pine lumber from Europe,
Chile or New Zealand to the UAE and
this sentiment is echoed by
importers and distributors in the
market. However, it also seems
possible for niche products to enter
the market for one-off or special
applications and this sector should
remain the target for US softwood
suppliers.
One area of particular interest is
decking, where treated southern
yellow pine and even Douglas fir
could be a viable alternative to
tropical species. There are
substantial decking requirements in
the UAE market, with a host of
waterfront developments underway,
despite the slowdown in construction
activity. In addition to the
decking, there is a significant need
for shade structures in these
developments and both species could
be used for these applications.
Another area which deserves some
exploration is the joinery and
furniture sector, which is
considerable in Dubai. A host of
large factories produce interior
joinery and furniture for
construction both public and private
building projects all over the Gulf
and beyond. A number of US softwood
species could be used for internal
parts of furniture and doors. |
AF&PA Japan Housing Start Report
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Housing starts continue to struggle,
but single family housing starts
seem to have hit
bottom and are ready to recover once
the economy shows signs of recovery.
Total
starts have not exceeded 70,000
units for 9 consecutive months. At
this pace, starts
may not exceed 800,000 units in
2009.
New starts declined to 67,120 units
(-27.1%) in October 2009, marking
eleven
consecutive months of decline. The
Japanese Government is considering
an ecopoints
program for better insulated
housing. If this stimulus measure is
implemented,
this should benefit renovation and
new housing starts. Another stimulus
measure that is
being considered is an increase in
the exemption on inheritance tax for
children from 6.1
million (US$67,000) to 21.1 million
yen (US$234,000). The difficulty is
implementing all
of these stimulus measures is the
shortfall in revenues due to
declining corporate profits.
Wooden starts were down 18.0 percent
to 38,945 units, 2x4 starts declined
7.1 percent
to 9,042 units, post and beam starts
were down 11.2 percent to 28,806
units and
wooden prefab declined 19.3 percent
to 1,097 units. The seasonally
adjusted annual
housing starts were 762,000 units
and the share of wooden housing
starts was 58.0
percent of total starts in October
2009. |
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Upcoming Trade shows and Seminars |
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December
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Merry Christmas, December 25
January
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Happy New
Year, January 1
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Expo
Moboliario, Janurary 23-25,
Mexico City
February
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KH
Housing Fair, Seoul,
Feb.20-24
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A+C Show ,
March 9-12 Tokyo
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Interzum
China, March 27-30 Guangzhou
April
- Dubai Wood 2010 April 13-15
Dubai
June
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Carrefour du Bois June 2-4
Nantes
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DesignBuild Australiasia June
23-25 Melbourne
August
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Tecno Mueble 2010 August 19-22
Guadalajara
~www.softwood.org/calender
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Softwood Export
Council- Promoting the expansion
of export markets for primary
and secondary softwood products
manufactured in the United
States.
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Softwood Export
Council Phone:
503-620-5946
PO Box
80517
Fax: 503-684-8928
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1998-2010 Softwood Export
Council (SEC)
PO Box 80517 Portland, Oregon 97280 USA
Telephone: 1-503-620-5946 Fax: 1-503-684-8928
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