American Softwoods

Representing the Southern Pine Council and the Softwood Export Council

25 Castle Street, High Wycombe, Bucks., HP13 6RU

Tel: 01494 451000 Fax: 01494 451100

E-mail: americansoftwoods@compuserve.co

QUARTERLY MARKET REPORT

FOR NORTHERN EUROPE

JANUARY – MARCH 2001

OVERALL EUROPEAN SITUATION:

The broad overall opinion obtained from a number of major importers across Europe is that the imports of sawn softwood from the US into Europe has been severely affect by the strength of the US dollar as can be seen from Table 1.

These figures clearly show the slow but gradual decrease which has taken place over the past 3 years.

TABLE 1

IMPORTS OF U S SOFTWOOD LUMBER BY COUNTRY-m3
===================================================================
COUNTRY	1998	1999	2000
BELGIUM/LUX	22912	22468	13221
DENMARK	1381	1940	1479
FRANCE	22092	36172	28671
GERMANY	87108	52691	42170
GREECE	13390	11863	4786
IRELAND	9322	8272	6697
ITALY	127334	135289	67628
NETHERLANDS	14222	11432	9980
PORTUGAL	3593	5639	3655
SPAIN	146325	180064	156983
SWEDEN	103	71	390
UNITED KINGDOM	39524	41675	27217
TOTAL EXPORTS	487306	507576	362877

This together with the fact that the German economy which main power house of the European economy has slowed right down.

The above figures relate to sawn softwoods only. The picture is however not as gloomy as they appear on face value because the down turn is not across all species as will be shown further into the report.

Also added value products such as flooring, mouldings and veneer have shown significant improvement.

COUNTRY COMMENTARY

GERMANY:

The export figures from the U.S. for the first 9 months of 2000 is shown in Table 2.

Whilst U.S. exports to Germany have been decreasing imports from countries like Sweden and Finland have also shown a downward trend. This is also reflection of the fact that as already mentioned the German economy has slowed right down.

Table 2 shows the various species imported. It is interesting to note that while the 2 main species, Douglas fir and Southern Pine are showing a downward trend, most other species are in fact showing improving import levels as shown in the Table 3.

Table 2

IMPORTS INTO EUROPE OF U S SOFTWOOD SPECIES - m3
======================================
GERMANY
SPECIES	1998	1999	2000
S P F	2683	969
Hem Fir	913	65
Spruce	433	245	462
Southern Pine	33335	28513	13892
Ponderosa Pine	1484	1086	1704
Lodgepole Pine	75	118	137
Other Pine	723	1023	992
Douglas Fir	15343	12133	4136
Other Fir	1127	35	3752
Hemlock	62	408	856
Larch	921	3276
Eastern White Pine	24	224	883
Western Red Cedar	590	199	133
Other Cedar	424	182	381
Redwood	848	74
Others - NES	30114	4523
Treated Softwood	1797	32
TOTAL EXPORTS	90896	53105	42170

Window Market:

The latest projections for the German window market does not indicate an optimistic picture for the market.

According to the Association of Window Manufacturers they forecast a drop of 10.7% in the number window units sold in 2001

Although Douglas fir has been losing out against other species Western Hemlock continues to make small gains in this market.

Species & Prices for Window Scantlings DM per m	November 2000	September 2000
Meranti White Seraya Spruce One-piece slats Finger jointed Pine One-piece slats Finger jointed Larch Oak Hemlock Douglas fir	7.10 – 7.70 8.50 – 9.00 8.20 – 8.80 5.60 – 6.40 7.20 – 7.80 5.0 – 5.50 11.00 – 13.20 18.90 – 20.00 9.40 – 12.00 13.50 – 15.00	7.30 – 7.70 8.50 - 9.00 8.20 – 8.80 5.60 – 6.60 7.30 – 7.80 5.00 – 5.50 11.00 – 13.50 18.50 – 20.00 9.60 – 12.00 13.50 – 15.00
Sales prices to bulk buyers, 72x 86mm, 3ply
Source: EUWID

In discussing these trends with major agents and importers in Germany it is very clear that major problem for them is the strength of the U.S. dollar.

However, this is not only reason. German domestic production has increased, partly due to the storm damage that occurred in the Winter of 2000/01 and the general increase the German timber was achieving. This fact added to the situation more timber especially Larch from Russia was being imported at very competitive rates.

UNITED KINGDOM:

The latest figures(Table 2) show the exports to the United Kingdom are slightly down compared with the same period in 1999. On an individual specie basis, however Southern Pine has increased by 7.5% as has Western Hemlock at 15.7% with Douglas fir slight lower at –4.0%

The trend for all US softwood species imported into the UK is shown in

Table 4.

Table 4

IMPORTS INTO EUROPE OF U S SOFTWOOD SPECIES – m3
=================================================
UNITED KINGDOM
SPECIES	1998	1999	2000
S P F	0	229
Hem Fir	3782	33
Spruce	37	274
Southern Pine	8226	8079		8034
Ponderosa Pine	64	0		384
Lodgepole Pine	0	129		149
Other Pine	972	1871		847
Douglas Fir	10669	9116		7890
Other Fir	3147	1713		470
Hemlock	995	1906		2484
Larch	1005	681
Eastern White Pine	291	162		49
Western Red Cedar	159	884		679
Other Cedar	108	25		157
Redwood	365	202
Others – NES	9704	13021
Treated Softwood	348	16
TOTAL EXPORTS	39872	38442		27217

During this first quarter activity in the decking market is running 15 to 20%

Increase over the same period as last year according to the main players involved with the installation of decking using treated Southern Pine.

However other areas where American softwoods have been regularly used have remained constant.

Western Hemlock continues to increase its share in the door market.

However, overall the window and door market remains static due the fact the building industry is using more windows and doors made from uPVC.

BELGIUM & LUXEMBOURG:

Exports of Douglas fir to these countries continue to disappoint. However, the picture for other US softwood species is much more positive with Southern Pine running 11.6% higher in 2000 compared with the same period in 1999.

Interestingly the trends for other US species imported are also improved except for Douglas fir which is still showing a downward trend.

Table 5 shows the total exports for 2000

Table 5

IMPORTS INTO EUROPE OF U S SOFTWOOD SPECIES – m3
=================================================
BELGIUM/LUXEMBOURG
SPECIES	1998	1999	2000
S P F	202	0
Hem Fir	79	455
Spruce	391	0
Southern Pine	4078	6292	7303
Ponderosa Pine	1052	199	317
Lodgepole Pine	35	0	105
Other Pine	540	723
Douglas Fir	10601	9099	1192
Other Fir	672	155	704
Hemlock	207	0
Larch	502	899
Eastern White Pine	110	423
Western Red Cedar	431	482	1530
Other Cedar	393	25
Redwood	92	69
Others - NES	3527	2491
Treated Softwood	0	36
TOTAL EXPORTS	22912	21348	13221

In many respect this market is very much influenced by what takes place in Germany and opinion from many importers anticipate a slowing down in Belgium as a result.

THE NETHERLANDS:

It appears that the export levels of Douglas fir to the Netherlands is maintaining its improvement when compared with the same period last year, running at nearly 3 times above level of last year.

This is due in part to the increased demand for windows in Holland and increased exports to Germany.

Unfortunately Southern Pine continues to be out of favour with Dutch timber market suffering severe competition from other pine species mainly from Honduras and Scandinavia.

Table 6

IMPORTS INTO EUROPE OF U S SOFTWOOD SPECIES - m3
=================================================
NETHERLANDS
SPECIES	1998	1999	2000
S P F	498
Hem Fir	44	0
Spruce
Southern Pine	4722	1273	0
Ponderosa Pine	238	0	77
Lodgepole Pine	12	0
Other Pine	297	496
Douglas Fir	2508	1357	2202
Other Fir	0	593	2354
Hemlock	58	220	72
Larch	438	995
Eastern White Pine	19	25
Western Red Cedar	134	215	228
Other Cedar	0	190	352
Redwood	4685	6215	3584
Others – NES	669	0
Treated Softwood	67	33
TOTAL EXPORTS	14389	11612	9980

From the figures Southern Pine has lost out completely as major specie to the dutch market. This is a direct result of the strong dollar and a very competitive alternative Honduran Pitch Pine.

However, Douglas fir exports have improved by 62% compared with 1999.

Unfortunately the major importers in the Dutch timber do not forecast that this situation will continue because of the strength of the Dollar.

Observations made during a Seminar held in Utrecht in March this year on the use of American Softwoods in outdoor applications, appear to indicate that opportunities do exist for treated Southern Pine albeit with non -CCA treatments and for durable species such as California redwood and Western Red Cedar.

This is because there is an aggressive campaign being carried out to ban CCA and CCA treated wood products which is being supported by a large section of the Dutch parliament. Although the first attempt to ban CCA and all products treated with it was stopped by the EU Commission on the basis that it was “ a barrier to trade” and this not allowed between member states. However the campaign continues.

It is as a result of this situation non-CCA treated Southern Pine and naturally durable species such as California redwood and Western Red Cedar have an opportunity to increase in the market particularly in the use of wood products for outdoor applications.

It is interesting to note that the Netherlands is the 2^nd largest customer in the world behind Japan for California redwood.

The reason for this is that that specie competes directly with tropical hardwoods which are also subject to criticism by the environmental lobby.

FRANCE:

As one can see from Table 9 Southern Pine has maintained its position in the market despite the effects of an over supply of Corsican Pine which is similar in many respects to Southern Pine.

Douglas fir has lost ground to French domestic Douglas fir as a result of not being competitive.

The concern in the timber trade in France is the continuing strength of the Dollar.

Trends for all US softwood species are shown in Table 9.

Table 9

IMPORTS INTO EUROPE OF U S SOFTWOOD SPECIES - m3
=================================================
FRANCE
SPECIES	1998	1999	2000
S P F	46	0
Hem Fir	0	373
Spruce	0	1399
Southern Pine	9503	7221		7123
Ponderosa Pine	30	0
Lodgepole Pine	77	0
Other Pine	864	14768		15790
Douglas Fir	1118	3786		1949
Other Fir	0	112
Hemlock	153	1954		861
Larch	705	432
Eastern White Pine	14	0
Western Red Cedar	66	0		85
Other Cedar	59	181
Redwood	0	510
Others – NES	9457	8642
Treated Softwood	846	847
TOTAL EXPORTS	22938	38477		28671

IRELAND:

Ireland continues to enjoy a growing economy which is reflected in the performance of their timber industry.

Southern Pine still remains the main specie exported to Ireland and continues to have a wide spread of applications such as windows, stairs, moldings and general internal joinery finishing.

The main competition to Southern Pine in these areas comes from tropical hardwoods such as Mahogany and Afromosia.

The only significant specie exported from the US is Southern Pine and this continues to increase ie 4753m3 in 1999 to 5524m3 in 2000, a 16% increase.

ENQUIRIES:

The UK Office receives enquiries from all markets in Northern Europe.

Since the last report, the UK Office has received the following number of enquiries covering the period January – March 2001

FLOORING: 53

STAIRS: 12

KITCHEN FURNITURE: 13

WINDOWS: 21

DOORS 31

INTERNAL CLADDING: 18

GARDEN LANDSCAPING: 8

TIMBER FRAMES: 14

PURPOSE MADE PRODUCTS: 3

GENERAL: 28

DECKING: 7

TOTAL:

The type of enquirer was also recorded and the results are as follows:

Private individuals: 35

Architects: 31

Building consultants/contractors: 61

Interior Designers: 23

Landscapers : 1

ACTIVITIES CARRIED OUT DURING JANUARY – MARCH 2001

During this period the following activities were undertaken:

· Meeting with Net Construct PR

· Participation at BAU 2001, Munich, Germany, Jan. 15-22

· Participation at BOUWBEURS 2001, Utrecht, the Netherlands, Feb4-11

· Meeting Deckor Timber

· Attended Timber Trade Federation Annual General Meeting and Dinner

· Held Seminar on timber decking in Almere, the Netherlands, March 15 & 16