American Softwoods

 

*           

 

 

 4th QUARTER  MARKET REPORT

FOR NORTHERN EUROPE

 

September – December 2001

 

OVERALL EUROPEAN SITUATION:

 

The economies of the EU countries continue to slow down. Each country is showing a downward trend in timber consumption.  This lower consumption is directly related to the building and construction industries which are at a stand still or running at a reduced level compared with last year.

 

The effect of this situation and the strength of the Dollar, which continues to exist(although it has weakened slightly over the last few weeks) has affected the level of timber imports from the U.S.A. into EU countries.  However, not all EU countries have been affected by the same degree as can be seen in the individual country figures described in this report.

 

However, nearly all the countries are affected by some degree by the economical condition which prevails in Germany at this moment of time and that is a  significant slow down.

 

Belgium-Luxemburg

 

House construction in Belgium-Luxemburg is slowing down and consequently the demand for wood and wood products reflects this situation.  This is not the case in the renovation/refurbishment sector of the housing market. This is enjoying a buoyant period and as a consequence the demand for wood flooring has increased and American softwoods have benefited from this situation with a significant increase in flooring from the U.S.

 

Although the promotional programme in the EU for American Softwoods does not include the promotion of softwood logs an interesting development has taken place in Belgium with the fact that there has been a significant increase in the imports of softwood logs from the U.S. compared with 2000.(Table 1)

 

In discussing this situation with Guy Daelmans, the Director of the Belgium Timber Information organisation ASBL Bois it would appear this is directly attributable to the fact that these logs although having been landed in Antwerp they are destined for other unspecified countries within Europe.

 

Table 1

 

1997

1998

1999

2000

2001YTD

2000YTD

LUMBER(m³)

27,890

18,602

17,511

11465

6400

8543

FLOORING(Tons)

5860

7865

146

487

1334

N/a

MOLDING(m)

520,435

667,723

624,389

852,176

N/a

678.989

LOGS(m³)

1,156

735

1,423

1,706

16,092

247

YTD= August

 

 

Denmark

 

Denmark is one of the countries that is heavily influenced by prevailing conditions that exist in Germany. As its main trading partner Germany is a major customer for wood products that Denmark has to offer, ranging from furniture to flooring.

 

The figures in Table 2 show clearly that the trend that is occurring with timber imports from the U.S. resulting directly from its relationship with Germany.

 

Furthermore, it is not just the U.S. that is being affected because the Danish timber industry forecasts that overall softwood timber imports are for 2001 are likely  to drop by about 10-12% and from all sources.

 

Table 2

 

1997

1998

1999

2000

2001YTD

2000YTD

LUMBER(m³)

1,302

1,308

1,220

803

730

525

FLOORING(Tons)

10,756

33,313

21,503

21,018

8,038

12.721

MOLDING(m)

-

-

-

-

-

-

LOGS(m³)

177

-

684

37

373

37

YTD= August

 

 

Germany

 

As stated in previous reports Germany is the powerhouse of the European economy and as such influences many of the other countries activities.

 

During recent visits to various companies and organisations in Germany the information gained from the discussions that were had continues to confirm the poor economic situation in Germany and which continues to have a profound effect on the building and construction industries which in turn is affecting the timber industry.

 

Table 3 shows situation regarding exports to Germany sofar during 2001.

 

Table 3

 

1997

1998

1999

2000

2001YTD

2000YTD

LUMBER(m³)

63,257

52,477

44,117

27,352

6,579

23,557

FLOORING(Tons)

6,608

9,400

12,850

15,133

4,841

10,668

MOLDING(m)

572,347

120,369

159,408

28,267

-

-

LOGS(m³)

1,843

1,208

6,055

8,078

24,478

3,597

YTD= August

 

This existing economic situation in combination with the high strength of the Dollar which has prevailed for most of 2001, has led to a position whereby the German timber trade is at present   buying on price.

Whilst the imports of US softwood species have fallen, the US is not the only country to be affected. Imports from Sweden and Finland are also showing a significant downturn at 31.42% lower and 31.91% lower respectively.  The only major exporting country that has improved its position is Russia.

 

Table 4 shows the comparison of various timber species used by the German window industry and it clearly shows how competitively disadvantaged US species are compared with far eastern hardwoods and European softwoods at present.

 

Table 4

 

Species & Prices for Window Scantlings

DM per m

September 2001

August 2001

Meranti

White Seraya

Spruce

    One-piece slats

    Finger jointed

Pine

    One-piece slats

    Finger jointed

Larch

Oak

Hemlock

Douglas fir

6.20 – 6.80

8.00 – 8.60

 

8.00 – 8.60

5.40 – 6.10

 

7.00 – 7.60

5.30 – 5.80

10.50 – 13.00

18.20 – 19.80

  9.80 – 11.50

13.50 – 15.00

6.00– 6.80

8.50 – 9.00

 

8.20 – 8.80

5.30 – 6.00

 

7.00 – 7.60

5.10 – 5.60

10.50 – 13.00

18.20 – 19.80

9.80 – 11.50

13.50 – 15.00

Sales prices to bulk buyers, 72x 86mm, 3ply

 

 

Source: EUWID

 

 

 

With regard to interior finishing products such as flooring, according to a major timber agency in Hamburg Southern Pine is losing out against Honduran Pitch. Again the reason is based on price.

Another factor that has to be taken into account is the fact that the German production of sawn softwood has over the last few years increased to such an extent that they now produce in the region of 14million m³  themselves and this is obviously having an effect on the requirement of timber

 

France

 

Although not as severe as the economic situation in Germany, France is also slowing down and this is obviously having an effect on the building and construction industries. This situation and the fact that French domestic timber production has significantly increased, particularly in the Pin du Landes region, producing a softwood which is not unlike Southern Pine, has affected the demand for Southern Pine simply due to the fact the French product is more competitively priced.  Douglas fir imports from the US have been severely affected by the French produced Douglas fir, again for  the reason as for Southern Pine.  Table 5 shows the US export levels to France up to August.

 

Table 5

 

1997

1998

1999

2000

2001YTD

2000YTD

LUMBER(m³)

12,250

11,884

29,832

26,677

2,617

22,277

FLOORING(Tons)

782

-

2,488

1,573

3,672

-

MOLDING(m)

-

24,934

-

228,196

7,894

228,196

LOGS(m³)

1,449

2,572

3,997

7,598

4,588

4,381

YTD = August

 

Ireland

 

Ireland is now beginning to suffer the consequences of their economic success in so much that the boom in new housing construction has slowed down.  This is due to the fact that house prices have risen so dramatically over the last few years, particularly in the Dublin region  it has reached a point where it has become more difficult to find affordable housing particularly for the lower income members of the population.

 

As a result this has affected demand for all the types of product which Southern Pine is used for. eg  stairs, windows, kitchen furniture and interior finishing products such as skirting boards.

 

There is still a considerable demand for housing in Ireland and it is estimated something like 50000 houses will be needed over the next 10 years and discussions are going as to how this can be best achieved.

Therefore on the horizon there will be opportunity for the demand for US softwoods to increase again but this will only be achieved if it is competitive compared with all the timber coming from the other exporting countries.

 

Table 6 shows the position as of August 2001. 

 

Table 6

 

1997

1998

1999

2000

2001YTD

2000YTD

LUMBER(m³)

5,109

7,290

6,440

6,326

3,640

4,343

FLOORING(Tons)

16,578

35,058

15,925

15,140

20,874

12,560

MOLDING(m)

475,928

-

-

-

33,334

N/a

LOGS(m³)

36

595

467