This marks at least our 7th time attending Ligna as an exhibitor, and a great chance to meet with our customers, fellow suppliers, friends, as well as make some new acquaintances.  Ligna has always been a very good opportunity for us to learn new market needs in addition to showcasing our products and how our systems apply to the future of sawmilling.

This year, we will be showing off a few of the sensors that we use in various applications.  We always seek the best product for a customer’s requirements, and we welcome the chance to discuss different sensor options with you. Of course, we will be happy to show you our latest cutting-edge products and developments as well, and would be very interested to learn of your sawmill philosophy and needs.  We may not have a solution to every problem, but quite often we have seen approaches others have taken for a simliar problem and could offer open discussion.

Please come and visit us in Hall 27, at stand B09!

Bitte besuchen Sie uns in Halle 27, Stand B09!

New five-year outlook shows that supply and demand conditions in wood products for the long-awaited ‘super-cycle’ are now taking hold, with the full impact still some 3+ years away!

December 10, 2012

With the return of a demand-driven wood products market in 2012 – due to rapidly increasing housing starts in the U.S. – it is now forecast that lumber and panel prices will move to new highs in 2013 and record highs for lumber in 2014. A North American “super-cycle” has been predicted by WOOD MARKETS since 2008 as a result of emerging supply-side constraints (mainly on forests and logs) as well as changing demand dynamics, but the global financial crisis that started in late 2008 and an unusually slow U.S. housing market recovery have delayed this event until 2012. With the expectation of strong growth in U.S. housing starts over the next five years, combined with a better balance in the housing inventory and a recovering economy, the U.S. supply chain is expected to become overwhelmed at times during the next five years, allowing wood products prices to soar. While there are a number of assumptions that are required to maintain steady economic growth, a strong wood products recovery amidst a tightening timber and mill supply base is still expected.

These and other findings on U.S. and Canadian lumber markets as well as forecasts for all engineered panels were released today by WOOD MARKETS in its 8th edition report:

WOOD Markets 2013 • The Solid Wood Products Outlook • 2013 to 2017.The report examines an overall tightening of the global timber supply base, but forecasts that it is mainly in North America where scarcities will be felt. With China now importing more and more logs and lumber from North America and with U.S. demand now rebounding, some key structural constraints are expected to keep log and lumber supplies tight relative to demand growth, including:

• A collapse of the Russian logging sector in 2009 from the global financial crisis where log exports are now less than 40% of their 2007 level as they continue to decline in 2012.

• Changes to the Russian log export tax that continues to leave Russian log exports less available and expensive.

• After a “cooling-off” period in 2012, China’s requirement to feed its growing wood deficit will see a return to steady demand growth for imported logs and lumber from North America and other sources.

• The mountain pine beetle epidemic in the B.C. Interior will, by the end of the decade, kill about 60% of all the pine trees in the BC Interior. This will permanently reduce Western SPF lumber production starting in about 2014 or 2015.

The Quebec government (which controls 90% of the forests in the province) will have reduced the timber harvest by at least 30% between 2004 and 2013, permanently reducing lumber production.

• Consequently, Canada’s lumber production will plateau by about 2015, allowing for essentially no increases in exports to the U.S. and will, therefore, see its’ U.S. lumber import market share plummet to two-thirds of its historical level. By the end of the decade, B.C. and Quebec lumber shipments will collectively be lower by some 10 billion bf as compared to peak shipments in 2004.

• The role of Timber Investment Management Organizations (TIMOs) will play out as log markets strengthen. As many large U.S. corporate forest companies with sawmills have sold their private timberlands to TIMOs, timber prices are eventually forecast to rise and be sold more on the margin, tightening the economics of sawmilling in the U.S. and potentially limiting incremental lumber production.

A key question that the report addresses is: “Where will the U.S. get its lumber after mid-decade?” This is almost the same question that WOOD MARKETS asked and addressed in its recent

China Book: Outlook to 2017 but in that report, the question was: “Where will China get its logs and lumber after mid-decade?” “Both countries will need to import increasing volumes of lumber and logs that will be tied more and more to international market forces as global timber and lumber supplies tighten,” explains Russell Taylor, President of WOOD MARKETS. “U.S. housing starts are expected to rebound from 550,000 units in 2009 to the long-term sustainable level of 1.5-1.6 million starts by 2017 and Chinese housing and wood demand is expected to grow further after the new government’s economic policies are unveiled in Q2/2013. The net result is that log and lumber demand in these countries are expected to grow steadily and drive global supply and prices.”

The outcome will be rising and even record-high U.S. lumber prices. In fact,

WOOD Markets 2013 is forecasting that export duties on Canadian lumber to the U.S. will essentially be at a ‘zero-rate’ for all five years of the forecast as compared to maximum duties of 5% or 15% (depending on the Canadian province) for most of the last five years. “Increasing prices will see the return of European lumber to the U.S. market – and lots of it – to fill the widening gap as Canadian lumber production and exports slow,” said Gerry Van Leeuwen, Vice President, “and, as a matter of fact, some European supplies are already starting to arrive at current prices, which are already at six-year highs!” Nevertheless, as European log costs are more than double those of North American logs, much higher lumber prices are required to attract significant volumes from Europe. So, higher prices are inevitable as the supply chain struggles to secure and move rising volumes!

Five-year forecasts on OSB and plywood also see strong prices, but not as high as what are in store for lumber. By comparison, the particleboard and MDF sector will see more limited growth, but higher demand and prices are also forecast in the report.

However, the entire “super-cycle thesis” requires strong and growing demand in the U.S. market as well as stable to increasing demand in other global markets (no global economic recession), especially in Asia. Without these conditions and the other key ingredient, increasing lumber demand, it is possible that the super-cycle could stall early or the timing may be pushed out further. In any event, the prospects of a tightening of the global timber and lumber supply are a reality and are expected to play out over the next five years!

Full details on the five-year outlook for the U.S and Canada’s consumption, imports, exports, production and price trends, etc., are available in WOOD Markets 2013 • The Solid Wood Products Outlook • 2013 to 2017. Visit http://www.woodmarkets.com/pressreleases.html

The high cost of the furniture has threatened the sector as a whole. The prices of raw materials used in making furniture which include chipboard, timber, foam, polish chemical materials, colour paints and hard ware have increased. Timber production on the other hand has gone down drastically because of unchecked deforestation. The prices of average quality furniture registered an increase of 25 to 30 percent due to high cost of wood and its shortage. Another reason of shortage of wood is said to be smuggling of sheesham wood to Dubai under the garb of raw material for making boats.

Furniture manufacturers said that all possible efforts should be made by the government in order to save the precious value added product’s unlawful export. Prices of average quality of bedroom furniture increased by Rs 40,000 to 50,000. Prices of fine quality wood increased by 5 times during last three years due to early cutting of trees in forests. Around 70 units manufacturing office furniture have already become sick units due to shortage of wood. Besides increase in prices of wood, chip board, MDF board, hardboard etc also registered 25 percent increase.

Keeping in view the poor financial condition of majority of buyers, about 70-80 percent furniture dealers in the city have put on display average-quality furniture, the dealer said. Dealers said the prices had gone up by 70-80 percent during the last two years, while Chairman Arambagh Furniture Market Association, Atiq Mir said that there was 30-40 percent increase due to surging prices of raw materials. Mir emphasised the need of taking care of forests in the country to save them otherwise wood will fade away from the country. He suggested that cutting of trees before maturity should be declared as a crime murder.

-        Business Recorder, July 2012