Markets
April 17, 2018 - In the 4Q/17, the Global Sawlog Price Index (GSPI) rose one per cent from the previous quarter to reach just over $76/m3. This was the fourth consecutive quarter-over-quarter rise, with the GSPI being up 9.8 per cent in one year. Sawlog prices have gone up universally in US dollar terms in 2017, with the biggest growth occurring in Eastern Europe, the Nordic countries and in Western North America, while the price movements have been more modest in the U.S. South, Latin America and Oceania, according to the Wood Resource Quarterly (WRQ).
April 16, 2018 - Builder confidence in the market for newly built single-family homes edged down one point to a level of 69 in April on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) but remains on firm ground.
April 12, 2018 - FEA Canada/WOOD MARKETS’ 2017 annual survey of “top 20” Canadian and U.S. lumber producers featured mixed production trends despite a runaway lumber market in the U.S. With few mill acquisitions, almost all of the production gains arose from improvements at existing mills. Of the top 40 companies, eight in Canada and six in the U.S. recorded production declines — not the trend you’d expect during a time of near-record-high to record-high lumber prices.
April 4, 2018 - Timber Automation, LLC, and VAB Solutions, Inc., today announced the acquisition of VAB Solutions by Timber Automation. VAB Solutions will become one of the Timber Automation divisions, which also include the well-known sawmill and log handling equipment manufacturers Baxley Equipment and LogPro, LLC. Timber Automation provides custom engineered equipment and control systems for woodyards and sawmills that maximize yield, increase uptime and reduce production costs. VAB Solutions offers a wide range of technology solutions for lumber production lines from sawing to planing, designed to uncover hidden value in every piece of lumber.

“We have trusted the reliability, accuracy, and innovation of VAB technology for years, regularly recommending our clients use their products. Knowing they hold similar values of quality, value and commitment to their customers, made this decision an easy one,” said John Steck, president, Timber Automation. “Our experience of a consistent and rapid return on investment for our clients with their Lumber Grading Optimizer, gave us confidence in the technology their team provides. We knew that adding a solid technology innovator to our complementary product categories would give us an extra edge in continuing to create industry-leading offerings for our customers.”

“We have always held that our products offer the best technology solutions in the market at a fair and competitive price for maximizing lumber profitability. Partnering with a strong brand like Timber Automation and their well-known divisions Baxley and LogPro, will allow us to quickly bring our valuable technology to sawmills all over the US,” states Mr. Jean Bérubé, founder VAB Solutions.

VAB Solutions will continue to operate in Lévis on the South Shore of Québec City, while Timber Automation’s headquarters remain in Hot Springs, Arkansas, with a manufacturing location in Baxley, GA.
April 4, 2018 - Pulp manufacturers in many countries have seen their wood fibre costs go up during 2017, with the biggest increases in US dollar terms occurring in Western North America, Europe, Russia and Australia, according to the Wood Resource Quarterly (WRQ). The Global Softwood Fiber Price Index (SFPI) increased for the third consecutive quarter to reach $89.08/odmt in the 4Q/17, 4.0 per cent higher than in the same quarter in 2016.

Hardwood fibre prices have also trended upwards over the past year, with the Global Hardwood Fiber Price Index (HFPI) reaching its highest level in almost three years during the 4Q/17. In US dollar terms, hardwood fiber prices have gone up the most in Europe, Russia and Indonesia during 2017. The only region that has experienced a decline in wood fiber costs has been the US South, where hardwood pulplog prices were 2.3 per cent lower in the 4Q/17 than in the 4Q/16.

Wood fiber costs remain the single largest cost component in the manufacture of wood pulp, ranging between 40–60 per cent of the total cash costs, depending on region and pulp grade. The wood fiber costs as a percentage of the price of Northern Bleached Softwood Kraft market pulp (NBSK) have been on a downward trajectory over the past eight years.

The substantial increases in market pulp prices during the 4Q/17 and only small upward price adjustments of pulpwood resulted in the wood fiber cost percentage reaching a record low of 23.2 per cent in the last quarter of 2017 (down from 36 per cent in 2012). Since wood fiber costs account for a majority of the pulp manufacturing costs, the low wood cost share has improved profitability for market pulp manufacturers throughout the world during 2017.
March 29, 2018 - In 2017, Russia sharply increased woodworking machine imports (+60.7 per cent) after a decline of 15.6 per cent in 2016. This may indicate that companies of Russian forest-based industries have adapted to the current exchange rate of the national currency, according to the analytical report "Russian forest-based industries in 2017,"  prepared by Lesprom Network's Research Department.

Investments in fixed assets in the production of paper and paper products increased by 33.3 per cent, and investments in wood processing (excluding furniture production) up 5.5 per cent.

In 2017, favourable situation on foreign markets formed a steady growing demand for the main products of the Russian forest-based industries. At the same time, the turn of the national economy from a recession to growth (GDP grew by 1.5 per cent) led to a revival of demand for products for domestic market. These trends are expected to continue in 2018.

China remains the main consumer of products of the Russian forest-based industries. In 2017, China’s share in the Russian export of logs was 66 per cent, in lumber exports — 55 per cent, in pulp exports — 58 per cent. According to the World Bank, the growth of China's economy amounted to 6.8 per cent in 2017, and it is expected to grow 6.4 per cent in 2018. According to the analytical report, the process of structural changes in exports (from raw materials to wood processing products) continues: Russia’s log exports decreased, but lumber exports increased by 10.1 per cent in 2017. Overproduction in the Russian MDF market led to an increase in MDF exports by 36.1 per cent compared to 2016, and MDF exports grew almost 2 times compared to 2014.

Growth (+34.1 per cent) of wood pellets production in Russia in the coming years will continue at a rapid pace, due to Russian and foreign companies are planning to launch a new production facilities in the country, according to the analytical report.

Increased attention of the state to the development of the forest-based industries and the beginning of a number of incentive measures for the development of wooden housing construction can contribute to increased demand for lumber within the country in the next 3–5 years.

Analytical research "Russian forest-based industries in 2017," contains 119 pages, it is annually issued by Lesprom Network's Research Department for 15 years. The report is the only annual comprehensive study of the the Russian forest-based industries. The report contains an analysis of the markets of wood raw materials, lumber, wood panels, pellets, pulp, paper and cardboard, as well as trends in the main export markets for Russian timber products. The report will be available here.
March 23, 2018 - U.S. consumption of softwood lumber is likely to reach record-highs by 2030, resulting in export opportunities for sawmills in Europe and Latin America, according to a new study from ForestEdge and Wood Resources International.

A newly released study by ForestEdge and Wood Resources International forecasts that U.S. softwood lumber demand will grow at an annual rate of 2.3 per cent through 2030, which will be higher than the reports projection of real GDP. The study’s Base Case demand scenario suggests that U.S. lumber consumption will reach an all-time high by 2030.
 
A detailed analysis of the future consumption of softwood lumber in each of the five end-use categories (residential housing, repair and remodeling, non-residential construction, material handling and other) reveals that the category “Non-Residential Construction” will grow at the fastest rate and will increase its share of the total softwood lumber usage from just over 11 per cent in 2016 to almost 14 per cent by 2030. Lumber consumed by the residential housing sector, including repair and remodeling, will continue to account for the almost 70 per cent of the end-use market.
 
At an estimated softwood lumber production cost of less than US$200/m3 in 2016, the US South is one of the lowest cost suppliers of softwood lumber to the U.S. market. This, combined with a significant “overhang” supply of softwood sawtimber as a result of the Global Financial Crisis in 2008-09 and a mature plantation resource, is expected to continue to facilitate a major expansion of sawmill capacity in the region.
 
The Canadian lumber producers market share in the US is expected to decline in the coming years, with the biggest reduction occurring between 2017 and 2025. The outlook for available log supply to the sawmilling sector will be different in the two major lumber-producing regions in Canada, with harvest levels falling substantially in British Columbia over the next ten years.
 
Overseas supply of lumber to the US is forecasted to increase both in volume and market share by 2025, followed by a decline until 2030. Based on the study’s lumber supply curve analysis, the major supplying regions are likely to include Brazil, Chile, Germany and the Nordic countries. In the study’s High Demand Scenario, which projects a very strong rebound in housing starts, R&R and non-residential construction, overseas supply will be crucial and reach a market share of over 10 per cent by 2030.  
 
After nearly two decades of real price declines of sawlogs in North America and elsewhere, the combination of a rebounding U.S. softwood lumber demand, constraints on log supply and export production in Western Canada, and continued strong demand for softwood lumber from markets in Europe, Asia and the Middle East/North Africa (MENA) region, is expected to push conifer log prices higher in real U.S. dollar terms in many timberland investment regions by 2030.
 


The excerpt above is from the new multi-client study “Future Suppliers of Softwood Lumber to the US Market – Supply and Demand Outlook 2017-2030”,published by ForestEdge LLC and Wood Resources International LLC. For more information about the study or to enquire about the purchasing of the 218-page report, please contact either Robert Hagler ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) or Hakan Ekstrom ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )
 
More information about the study can also be found here.
March 21, 2018 - International trade of softwood lumber is on pace to a new record high in 2017 if the trend from the first six months of 2017 continues in the second half of the year, reports the Wood Resource Quarterly.
March 15, 2018 - Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March from a downwardly revised February reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) but remains in strong territory.

"Builders' optimism continues to be fueled by growing consumer demand for housing and confidence in the market," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La. "However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand."

"A strong labour market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise," said NAHB chief economist Robert Dietz. "With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead."

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI component gauging current sales conditions held steady at 77, the chart measuring sales expectations in the next six months dropped two points to 78, and the index gauging buyer traffic fell three points to 51.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57, the South decreased one point to 73, the West fell two points to 79, and the Midwest dropped four points to 68.

Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.
March 14, 2018 - A new multi-client study by ForestEdge LLC and Wood Resources International LLC will be released on March 16th 2018!

The purpose of this study was to evaluate how future US demand for softwood lumber will be met as the supply dynamics of North America change and off-shore supply and production economics evolve over the next decade. 

The 218 page study covers:

I. Demand: Projected Demand for Softwood Lumber in the US for the period 2017-2030
Future lumber consumption is based on projections of housing starts, repair & remodeling expenditures and related softwood lumber consumption, and the evolution of other demand sectors.


II. Supply: Projected sources of softwood lumber Supply 2016-2030
Includes detailed profiles of key softwood lumber production regions including 
New Zealand, Chile, Brazil, Sweden, Eastern Canada, Western Canada, the US Northwest and the US South.

Mini-profiles, evaluating softwood timber resources, delivered log prices, lumber trade and softwood lumber export potential to the US market of 
Germany, Finland, Latvia, and Western Russia are also provided.

III. Supply Curve Analysis
The study constructs a US softwood lumber supply curve for 2016 using actual supply statistics and estimated delivered softwood lumber costs for the key supplying regions. The study then evaluates how supply could change under alternative Demand Scenarios, based on regional projections of log costs, softwood lumber production, and likely US exports, to identify the most likely suppliers to the US market in 2025 and 2030.


IV.  Conclusions and Sensitivities
In addition to reporting results for various demand scenarios, the study considers sensitivities based on investment capital and exchange rates, and offers insight into the implications of the changing US softwood lumber market on timberland investments.


Please request a brochure for more information about the comprehensive study, including who will benefit from the analyses, pricing options and the Table of Contents.


For more information about the contents of the report, or to order, please contact:  

Håkan Ekström at 1-425-402-8809 ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ), or
Robert Hagler at 1-703-838-3636 ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it
)
March 14, 2018 - Last night, the U.S. Department of Commerce imposed preliminary anti-dumping duties up to 22.16 per cent on imported Canadian uncoated groundwood paper (newsprint).

On behalf of the workers in our sector, Forest Products Association of Canada is disappointed in this outcome and strongly believes that these duties are completely unjustified and represent a costly and losing proposition for workers and paper customers on both sides of the border.

FPAC applauds the swift response issued last night from Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr – they unequivocally defended Canada’s interests.

In addition to strongly defending Canadian workers and businesses against these unfounded duties imposed by our U.S. neighbours, FPAC is calling on the Trudeau government to do the following:

  • Continue efforts to support industry’s efforts to aggressively diversify export markets.
  • Partner with FPAC and Canada’s forest products sector and our workers to further enable the transformation of our sector into new and innovative product areas.
  • Activate employment support programs for any Canadian workers who might be impacted in the event of reduced shifts or job losses.
As it has with the softwood lumber dispute, this trade action will bring real harm to U.S. workers and businesses, impacting over 600,000 American jobs. We applaud the leadership of the many Democratic and Republican U.S. Senators, and the publishers of over 1,000 small and medium-sized U.S. newspapers who have demanded that Washington not impose countervailing and anti-dumping duties on Canadian newsprint exports.

Canada is the largest exporter of newsprint in the world. According to the Government of Canada’s Trade Data Online, Canadian uncoated groundwood and newsprint paper exports to the United States totaled about $2 billion CAD in 2017.
Feb. 27, 2018 - International technology supplier Springer Group has acquired a majority stake in Finnish company FinScan.

FinScan is a specialist in scanners and software for automated optimization of lumber in sawmills, having installed more than 400 scanners in over 20 countries around the world.

“With the majority stake in FinScan we extend our market product portfolio as an integrated technology provider for the wood-processing industry,” Springer chief executive officer Timo Springer said. “From now, we have an extensive range of optimization systems in the wood-processing industry at our disposal and that way, we can expand our technological and innovative leadership.

“We see good opportunities to grow and strengthen our position in the future together. We are looking forward to working together,” he said.

“FinScan is very successful, has long time customers and has a clear portfolio of sophisticated scanner solutions at its disposal,” FinScan chief executive officer Jyri Smagin said. “Through the merger with Springer we expect a further technological progress.”

Smagin will continue running the company at the same managing position.
Feb. 26, 2018 - Sales of newly built, single-family homes fell 7.8 per cent in January to a seasonally adjusted annual rate of 593,000 units after an upwardly revised December reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

"New home sales have taken a pause this month, but our builders are reporting confidence in the overall market and future sales conditions," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La. "With strong consumer demand for housing, we expect the sales numbers to move forward in the months ahead."

"The moderation in new home sales may be attributable to the interest rate environment, which could be causing short-term market volatility," said NAHB senior economist Michael Neal. "However, the underlying economic fundamentals for housing demand remain strong and we expect more prospective home buyers to enter the market in 2018."

The inventory of new home sales for sale was 301,000 in January, which is a 6.1-month supply at the current sales pace. The median sales price of new houses sold was $323,000.

Regionally, new home sales rose 15.4 per cent in the Midwest and 1.0 per cent in the West. Sales decreased 14.2 per cent in the South and 33.3 per cent in the Northeast.
Feb. 23, 2017 – Canfor has announced its financial results for the fourth quarter of 2017.
Feb. 20, 2018 - German-based grinding and eroding machines specialist Vollmer will hand over its wood-cutting band saw products to Swiss sharpening machine manufacturer Iseli effective Jan. 1, 2019.

Iseli will obtain the rights of use and marketing rights for the product area and Vollmer will continue to perform service and maintenance activities for the machines delivered up to the acquisition date.

Guarantees and warranty obligations, as well as maintenance contracts for machines that Vollmer concluded with customers up to the acquisition date shall remain with Vollmer. This means that service activities and the spare parts supply, as well as the application support for all machines delivered up to Jan. 1, 2019 from the wood-cutting saws product area will continue to be performed by Vollmer without any restrictions.

The disposal of this product segment is part of Vollmer’s long-term corporate strategy. In the future, Vollmer will focus more on its growing business areas of CNC-controlled grinding and eroding machines. Vollmer will invest more heavily in the circular saw and rotary tool product areas and equip them with additional resources in order to develop new technologies, services and machines. 

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