Wood Raw-Material Markets Globally and Locally Mapping the Course - - - PowerPoint PPT Presentation

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wood raw material markets globally and locally
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Wood Raw-Material Markets Globally and Locally Mapping the Course - - - PowerPoint PPT Presentation

Jan 13, 2023 168 likes •399 views

Wood Raw-Material Markets Globally and Locally Mapping the Course - The 7 th Annual Forest Industry Conference January 23, 2020 Vancouver, Washington Hakan Ekstrom Wood Resources International LLC Wood Resources International Key Market

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Wood Resources International

Wood Raw-Material Markets – Globally and Locally

Mapping the Course - The 7th Annual Forest Industry Conference January 23, 2020 Vancouver, Washington Hakan Ekstrom Wood Resources International LLC

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Wood Resources International

Key Market Factors

Mountain Pine Beetle President Trump Spruce Bark Beetle Climate Change

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Wood Resources International

A Few Numbers of Interest

BC Lumber Production

  • 21%

US Log Exports to China

  • 52%

Russian Lumber Exports to China +12% German Log and Lumber Exports +150% and +16%

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Wood Resources International

70 80 90 100 110 120 130 Volume (Index 2002=100) Wood Pulp Softwood Lumber

Sources: FAO and WRI Databank

Global Production of Pulp and Lumber

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Wood Resources International

25 50 75 100 125 150 175 200 225 Volume (Index 2002=100) Wood Chips Pulp Softwood Lumber Softwood Logs

Sources: Customs Statistics and WRI Databank

Global Trade of Forest Products

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Wood Resources International

Global Sawlog Price Index (GSPI) 1Q/95-3Q/19

20 40 60 80 100 1Q 95 1Q 97 1Q 99 1Q 01 1Q 03 1Q 05 1Q 07 1Q 09 1Q 11 1Q 13 1Q 15 1Q 17 1Q 19 US$/m3 Source: Wood Resource Quarterly

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Wood Resources International

Wood Markets - China

  • Continued Strong Lumber Imports
  • Expansion of Pulp Capacity has Slowed
  • Domestic Forest Resources Insufficient
  • Largest Hardwood Chip Importer in the World
  • High Log and Wood Fiber Costs
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Wood Resources International

Imports of Softwood Logs and Lumber to China

10 20 30 40 50 60 Million m3 Logs Lumber (rwe)

Sources: Customs data and WRI est.

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Wood Resources International

Softwood Log Imports to China

Sources: Customs data and WRI estimates 5 10 15 20 25 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e Million m3

New Zealand Russia North America Other

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Wood Resources International

2 4 6 8 10 12 14 16 18 Million m3 Russia Canada Finland US

Softwood Lumber Imports to China

Sources: Customs data and WRI estimates

  • Note. 1 mbf ~ 1.7 m3
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Wood Resources International

  • Mixed Wood Raw-Material Cost Trends the Past Few Years
  • Expanding Forest Industry in the US South
  • Reduced Timber Harvests in British Columbia
  • Outlook for Increased Demand for Lumber in the US
  • Reduction in Log Exports from North America to Asia
  • Canada no Longer the Largest Lumber Exporter in the World

Wood Markets – North America

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Wood Resources International

Overseas Lumber Imports to the US

200 400 600 800 1000 1200 1000 m3 Germany Sweden Brazil Chile Sources: Customs data and WRI Databank

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Wood Resources International

Log Exports From Western US to Asia

2 4 6 8 10 Million m3 China Japan

  • S. Korea

Total Sources: Customs data and WRI estimates

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Wood Resources International

Log Exports From British Columbia to Asia

1 2 3 4 5 6 7 Million m3

China Japan

  • S. Korea

Total

Sources: Customs data and WRI estimates

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Wood Resources International

25 50 75 100 125 150 175 200 225 Price Index, US$ (1Q/08 = 100) Douglas-fir (Domestic) Hem-fir (Domestic) Douglas-fir (Export) Hem-fir (Export)

Sawlog Prices – US Northwest

Source: WRI databank

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Wood Resources International

25 50 75 100 125 150 175 Price Index, US$ (1Q/08 = 100)

HemBal (Domestic) HemBal (Export) SPF

Sawlog Prices – British Columbia

Source: Wood Resource Quarterly

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Wood Resources International

Sawlog Prices for Key Lumber Producers 3Q/19

Source: Wood Resource Quarterly

20 40 60 80 100 120 140 U S , N W C a n a d a , W e s t U S , S

  • u

t h C a n a d a , E a s t C h i l e S w e d e n N e w Z e a l a n d B r a z i l G e r m a n y US$/m3

10 year avg 3Q/19

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Wood Resources International

Residual Chip Prices in North America

Source: North American Wood Fiber Review 25 50 75 100 125 150 1Q/05 1Q/06 1Q/07 1Q/08 1Q/09 1Q/10 1Q/11 1Q/12 1Q/13 1Q/14 1Q/15 1Q/16 1Q/17 1Q/18 1Q/19 US$/dry metric ton US West US South Canada West

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Wood Resources International

Gross Margins in the Sawmilling Industry

BC Interior

Source: Wood Resource Quarterly 50 100 150 200 250 300 350 1Q/05 1Q/06 1Q/07 1Q/08 1Q/09 1Q/10 1Q/11 1Q/12 1Q/13 1Q/14 1Q/15 1Q/16 1Q/17 1Q/18 1Q/19 US$/m3 Net Wood Costs Lumber Price "Gross Margin"

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Wood Resources International

25 50 75 100 125 150 175 200 225 Profit Margin Index (1Q/05=100) US South US NW, Hem-fir Can BC, Interior

Gross Margins in the Sawmilling Industry

Source: Wood Resource Quarterly

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Wood Resources International

  • Global forest product production, which had been in a steady expansion mode for

almost ten years, levelled off in 2018 and 2019.

  • China continued to increase importation of softwood lumber in 2019 and

surpassed the US to become the world’s largest importer in late 2019.

  • Wood raw-material costs were generally lower for both the pulp and sawmilling

sectors in 2019, with the biggest declines occurring in Europe and Western North America.

  • Lumber and pulp prices are likely to increase in 2020, resulting in moderate

upward pressure on prices for pulpwood and sawlogs in the coming year.

Key Takeaways

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Wood Resources International

Wood Resources International LLC Seattle, USA Publisher of the Wood Resource Quarterly WoodPrices.com

Questions?