WORLD MARKETS
Chinese influence on NZ log prices continues Log prices have continued to rise in China, though this is a slower and more steady rise than what was seen in 2011. A-grade logs are now fetching $140/JAS and industrial K-grade is at $127/JAS. This is around 6-8% above prices this time last year, and though it is still around 6-8% lower than in 2011, the volumes being shipped are around 40% higher than this time the last two years, and so the total value of exports is rising.
Volumes of exports are remaining very high and production in New Zealand is going flat out, though with offport takings in China stopping for the Chinese New Year this is leading to port inventories rising steadily. With more stock on port in China there will be caution around pushing prices up to far as it may curb the high volumes being exported. If log prices get too high, the concern is that there
Wood pellet market outlook looks bright Global wood pellet consumption forecasts to 2020 vary greatly. Depending on the source, market growth for wood pellets is projected to grow by 200–300% from 2012 to 2020, rising from 16 Mt to 40–50 Mt. For the four key global consumption regions forecasts indicate that Europe will remain the major market at about 25-30 Mt in 2020 (versus 12 Mt in 2010). An important market change during the next eight years is the huge consumption growth forecast for the Asian market by 2020: from less than a 1 Mt in 2010, it is expected to rise to about 15 Mt in 2020. As global wood pellet output continues to increase, it is clear the low-cost production regions are becoming the major source of pellet exports. Which regions will
evolve to supply each of the rapidly growing export markets will depend to a great extent on the competitiveness of the two major cost components of every pellet manufacturing plant; the cost of raw material delivered to the plant and chipped/dried into small particles; and transportation and logistics costs to market. Further updates on wood pellets and other options for woody biomass utilization are being covered in this regions twoyearly technology update, www.woodresidues events.com that ran in both New Zealand and Australia in mid-April. Full details on both programmes can be found on the website. Source: International WOOD Markets Group, www.woodmarkets.com
22 International Forest Industries | APRIL/MAY 2013
will be price spikes and associated drops. This will cause increased volatility and price swings. Slow steady price increases are better for the New Zealand export market. High prices may also have the effect of increasing competition for supply as it will draw higher volumes from the Pacific North West and Russia. Previously prices of around $140145/JAS would start to draw
further supply from Canada, though this may not be the case due to more competition with the US for Canadian wood. North Island • Domestic: Pruned Grades are up • Export: Unpruned grades are up. South Island • Domestic: Flat • Export: Unpruned grades are up. Source: NZX Agrifax at www.nzxagri.com/agrifax
Finnish exports up in 2012 Finnish exports of softwood lumber and planed products in December 2012 were 6.5% higher than the reference figure for the year before at a total of 526,000 m3 after a reduction of almost 3% had been recorded for the previous month. Exports to buyers within Europe were only raised
slightly in December by just under 2% to 164,000 m3 . Here, deliveries to France were stepped up by almost 14% and those to Germany by roughly 19%. In contrast, the volume of softwood lumber sold to the UK dropped by almost 20% to 37,000 m3. Source: EUWID
Timber Regulation entered into application On March 3, the European Regulation 955/2010 (known as Timber Regulation) entered into application; it applies to timber and all timber products, including paper. The main goal is to ensure the legal origin of all timber and derived products, which are imported and/or traded for the first time within the European Union’s borders. The regulation applies to whoever places timber and/or timber products on the European market for the first time
(‘operators’) and prohibits the introduction and trade of illegally harvested timber; operators will have to exercise a Due Diligence System in order to mitigate the risk of illegally harvested timber products by means of a risk analysis and mitigation approach. Moreover, the Regulation provides an obligation of traceability for whoever trades within the European market, by keeping record of information referred to suppliers and customers involved.