MEDITERRANEAN MARKET UPDATE

 

July-September 2001

Issued by American Softwoods, Madrid Office

 

Summary

 

 

Market Situation                                                                              page  3

Softwood markets                                                                          page   4

Softwood Imports in Spain                                                            page   4

Ranking of Spanish Ports                                                              page   8

Public Relations                                                                              page   9

Seminars                                                                                         page   9

Trade Shows                                                                                   page   9

Testing Program                                                                             page   10

Calendar                                                                                          page   11

 

 

Market Situation

 

Scandinavian Softwoods

 

After the summer, purchasing activity is returning to its normal speed. There are no signs of relevant changes in prices. The only exception is a price increase for redwood VI grade in its main market, Egypt.

 

General basic price references (Euros / m3) C.I.F.   Mediterranean ports1) 

 

Redwood                                           Spruce

U/S= 260  €                                       U/S=215 €

V=   190  €                                        SF = 190  €

VI= 160  €                                        V=   180-85 €

                                                                       VI=  150 -55 €               

 

 

Domestic Softwoods. Radiata Pine1)

 

Prices stable, in the range of $175/m3  exmill on truck, season dry. Demand also remains stable for Radiata pine

 

Southern Pine1)

 

Despite a slight depreciation of the dollar recently, the situation remains very conflictive without any indication strong enough. Large differences among similar grades are being detected, together with sensible price drops for several specifications.

 

 

Price references1), CIF.Valencia. $/ M3

 

Saps 

 

4/4 X 6

4/4 X  8

4/4 X 10

4/4 X 12

5/4 X 8

1-5/8x 6 y 8

1-5/8 x10y12

8/4

1.050

1.050

   1.100

     1.180 

   1.200 

   925

  1.000

 1. 190

 

 

Prime &Bttr:                                      Flitches NBR1.

 

   5/4x 8 y10

           12/4x6 y +

  8/4 x 10 y +

      12/4x10y+

1.000

        1.250

    950

    1.150

1) Source: Aeim

 

Softwoods markets

 

Demand for softwoods in Spain grew during year 2000 at a slower pace than previous year. The construction sector is considered the primary contributor to this trend, because the consumption of coniferous products is linked very closely with the construction. It was fuelled by the successive cuts to interest rates throughout the year 2000. However the end year figures show less activity respect the year before both in terms of housing starts and finished.

 

Economic projections for 2001, that suggested a general slow down of the GDP increase are being confirmed. Several indicators are confirming a this trends, generating uncertainty on the consumption forecasts along the immediate months. However, GDP projected figures for Spain are better that for the whole EU ( 3,3% and 1,7% respect), in the construction sector global perspectives are moderately good along 2001 although consistent with the general downward trend. The relative positive results in this sector during the first part of the year  brought softwood imports to a still growing pattern. The year may end at an estimated 11% in softwood imports, while in 2002 it is anticipated a reversion in the trend.

 

 

Softwood imports

 

Softwood sawn lumber imports in Spain continued upward in 2000, reaching 2.2 million/m3, or a 14% increase. This rate is consistent with the increasing trend observed since 1994.  Key suppliers to the Spanish market except Portugal saw the import volumes growing : Sweden (10%), Portugal (-5,9%), France (39%), Finland (31%), USA (1,8%), Russia (14%) and Brazil (12%).  In terms of market share, to be noted the important gain made by France and Finland (+ 2,4 and 1,4% respect.) US share diminished by 1% due mainly to the almost stagnation on the imported volume (+3.500 m3). This can be attributed mainly to the excessive strength of the dollar. As the dollar increased the exchange rate with the euro, the Southern Pine market share became threatened. Initially it was not noticeable because most importers hoped that the historically heights were not to be sustained during a long period. As the US economy kept an extraordinary dynamism, over that from the European partners, the currency reflected this situation, therefore exaggerating the overvaluation of the dollar. Its continued effect induced first an inflexion, the growth of imports virtually disappeared, and in a second step we have seen a decline. In the mean time, the terrorist attack in the USA, changed the perception of the economy, where although an announced downward movement was anticipated by the markets it drove into an economic world crisis affecting similarly the major trading zones. As usual, the US currency has reassumed its roll of shelter for investments which in turn are inducing again an upward move damaging furthermore again the export potential of commodities exchanged in dollars, in light of the stagnation or probably worse the recession of the economy in all major areas.

 

Spain-Softwood Sawn Lumber Imports  –x1000 m3

 

Top  10 suppliers 

 1999

 2000

% change 99/00

Sweden

     575.037

   632.464

     +10,0

Portugal

     352.438        

   331.538

        -5,9

France

     227.867

   318.291

     +39,7

Finland

     179.224

   236.108

     +31,7

USA

     180.347

   183.534

       +1,8

Russia

     132.442

   151.016

     +14,0

Brazil

     100.609

   113.023

     +12,3

Germany

       31.319

     39.363

     +25,7

Poland

       15.367

     37.743

   +145,0

Latvia

       39.104

     36.694

        -6,2

All others

       88.939

   109.646

     +18,0

TOTAL

   1.937.521

 2.216.260

     +14,4%

 

Note:It must be stated that if the CIF value is taken into account, the USA is second to Sweden

 

A important change occurring is the significative gain of spruce in the species mix. Today it represents 48% of the volume imported from Scandinavia, whereas only four years before it hardly reached a 30% of the total. It is replacing consistently European  redwood in less demanding applications like door frames and uses where the aspect is ancillary to its economy.

 

It most be taken into account the fact that large volumes of imported softwood goes into the pallet and packaging industry. This is of application to lumber from Portugal, Brazil, Chile and many of East European countries. However, trials are being made by certain furniture firms to profit from relatively low priced Chilean Radiata pine

 

The provisional figures for lumber imports along the first five months in year 2001 are shown below, comparing the activity with the same period in 2000.

 

During the first five months in 2001, softwood imports in general continued growing similarly at rates of around 14%, with large increases from Germany (+60%), France (+28%), Russia (+22%) and Sweden (+17%). With much smaller volume, to be noted also healthy growths from Chile, Poland, Canada and the Baltic states.

 

In the opposite direction, US imports are being penalized heavily (-16%), similarly to imports from Brazil, and almost any other supplier using the dollar as the transaction currency.

 

In the table below, columns from left to right are countries,  import volumes for the same period in years 2000 and 2001, percent variation, import value in Euro, and import value in pesetas. It is worth to note the following aspects:

 

1.- Of interest is the position of USA imports. According to volume, USA is the fifth, value wise is second to Sweden.

 

2.- The slide down of imports from Brazil, while it must remarked a strong surge of those from Chile.

 

3.-The possibility that Chilean lumber is entering a specific market niche, probably in the furniture industry, Several furniture manufacturers in Andalucia have confirmed trial imports.

 

4.-A large percentage of Imports from Poland may well be destined to the pallet and crate industry. 

 

5.-Import volumes are in line with forecasts for year 2001, while it is broadly assumed that they will reverse in 2002 following the general slowing down of the economy in the area.

 

6.-Of interest is the increase in imported processed wood products. This is the case of flooring material, during the first 5 months of 2001, imports jumped to 107 cubic meters or 318 million euros. It may be premature to signal a trend, but significant enough of a change in the imports possible growing culture of importing value added wood items

 

French Maritime Pine timbers competitor of Southern Pine’s Nº1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Ranking of Spanish Ports

 

The port of Valencia is the major entrance for wood products in Spain with 25% of the tonnage in wood products entering the country. In includes also the neighboring ports of Gandía and Sagunto. However, is loosing market share.

 


 

 

 


Second is the port of Huelva whose traffic is based on log imports for the pulp and paper industry, followed by the ports in Galicia. Here also shipment of raw fiber is the main wood product, because of the strong presence of the pulp industry in the region ( including Northern Portugal). Nonetheless, these ports also absorb a significant portion of solid lumber imports in Spain. It is estimated that  one single solid wood importer accounts for nearly half of the total volume of sawn lumber going into Galicia. Finally, among the ports that are having a fast growth two can be cited: Marin and Tarragona, the latter perhaps enjoying its geographical situation between Barcelona and Valencia and recently installed new facilities.

 

Public Relations

 

During the period two major releases were published in the technical press. One in the Spanish magazine Aitim (attachment I), and the second in the Italian Il Legno (attachment II). All together 12 pages dealing with numerous aspects of the wood products from the USA.

 

Example of Southern Pine installed at Cordoba’s mosque

 

A number of insertions are scheduled during the following  months aimed at the window industry to counteract mistaken perceptions about the use of American wood species in this application.

 

Seminars

 

A series of seminars are being discussed with several organizations in Spain and proximately in Italy. A number of visits were made to Confemadera, Aidima, Unemac, Gremio de Serrallers, Aeim, among others to develop seminar activities in cooperation with those institutions. Until today, three have confirmed their interest in sharing resources. A respected university professor in wood technology is invited to participate at the meetings, because of the technical content of the sessions.

 

At present one seminar will take place in November and three additional sessions are scheduled for January 2002.

 

 

Trade Shows

 

American Softwoods will be participating at the major wood show in the Mediterranean region, Maderalia. This event is oriented mainly to the furniture industry, but it is increasingly accommodating the carpentry sector and building furnishings. The experience from past editions has proven to be very positive in terms of contacts and information of the market trends. Maderalia starts in November 7 to 10 in Valencia.

 

Testing Program

 

To counteract misperceptions about the suitability of Southern Pine for use in exterior applications ( doors and windows) lately broadening among the local wood industry, a testing program has been suggested, where on the same basis for comparison, the other two major competitors of Southern Pine: European redwood and European spruce are put to test. The test has the objective of showing that Southern Pine is not inferior to any of them for exterior use. The performance of the competing species subjected to the same weathering conditions, in practical terms, samples will be tested against blue staining with the most common finishing used in the country. It will demonstrate that our competitors do stain similarly to Southern Pine, and that with a proper treatment and finishing it is a very durable lumber.

 

 

Exterior Carpentry in Douglas Fir

 

 

The work is planned to commence in the next couple o f months and extend for approximately four additional months. Testing will be carried out according to the European standards by the Spanish official research laboratory for wood, the INIA, which certainly provides a plus of credibility to the test results.

 

Calendar

 

November 7-10 : Maderalia Trade Show, Valencia, Spain

November 13-16: Trip to Italy, contacts with associations

November 23: seminar in Seville, carpenters

December 11-14: trip to Portugal, market research

December : start of testing program on

January 2002: seminars in Madrid, San Sebastian and Cordoba, carpenters