News in international markets

The COVID-19 pandemic has created a housing construction boom in Australia. As a result, demand for Australian timber has soared. Much of the timber needed to meet that the growing housing demand came from sawlogs that were burnt during the summer bushfires of 2019–2020.

State-owned Forestry Corporation of NSW Australia has announced that starting July 1, 2021, there will be a ‘significant’ decrease in the volume of timber it can supply to AKD and Hyne timber mills. There will be no change to what is supplied to Visy, due to the age profile of what was affected by the fire.

The estimated 400,000 cubic meters of timber cut between 2013 and 2015 to make way for the Muskrat Falls hydroelectric station in Labrador, Canada, has been sitting there idle ever since. However, that wood will soon be on its way to China. A deal was completed last summer by JP Forestry, a company that specializes in wood chips, and the Innu Nation to sell off timber leftover from the Muskrat Falls project.

Chilean plywood export volumes in 2020 totaled 451,920t. The positive development in Q4 helped export volumes to post a year-over-year increase of 1.1%. US customers purchased a total volume of 234,451t Chilean radiata pine plywood at a value of US$193.3m last year.

For over a decade paper demand in Europe has been on the decline. The COVID-19 pandemic further changed consumers behavior patterns and led to a significant overcapacity in the European paper market, which has resulted in historically low-price levels and challenged the cost-competitiveness of many paper mills. As a result, Stora Enso has announced that they intend to permanently close the Veitsiluoto mill in Finland and Kvarnsveden mill in Sweden sometime in Q3 of 2021.

The latest statistics released by China Customs reveal that China’s import volume of softwood lumber decreased by approximately 10% in 2020. In the first two month of 2021, when compared to the same period of time in 2020, the decline has been 23%. China’s softwood lumber inventory was low at the end of 2020 and at the end of March 2021, it was at 700,000 m3, which is well below the normal average inventory of 800,000 – 1 million m3 in previous years.

Increased demand for lumber products in New Zealand has led to a national supply shortage. As such, both Kiwi Lumber sawmill and WET Gisborne Ltd., are experiencing greater demand for their finished products. In response to that demand, both companies are taking proactive steps to increase their production.

Södra, the international forest industry group, which is owned by more than 53,000 forest owners, announced that pending the approval by the Swedish Competition Authority, it is acquiring Ture Johanssons Trävaru AB and AB Tenhults Impregneringsverk.

The COVID-19 pandemic has sent timber prices in soaring in China. It has also created major supply chain pinch points as timber imports into the country have dramatically slowed. According to a report from the China News in December, China is the world’s largest importer of timber and the second-biggest timber consumer.

According to the International Tropical Timber Organization (ITTO), the value of Brazilian exports of wood-based products (except pulp and paper) in February 2021 amounted to $282.0 million (USD), an increase of 30.5% when compared to February 2020, when they were valued at $216.1 million USD.