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Hakan Ekstrom
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Mr. Ekstrom is the President of Wood Resources International LLC . The company is an internationally recognized forest industry consulting firm established in 1987, which publishes two quarterly timber price reports and have readers in over 25 countries. The Wood Resource Quarterly, established... More
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  • China Imported Logs And Lumber For A Record Nine Billion Dollars In 2013, With North America, Russia And New Zealand Being The Major Suppliers

    China's importation of softwood lumber was 19 percent higher in 2013 than in 2012 reaching a new record high. The unprecedented increase in lumber shipments to the Chinese market that began in 2008 is continuing. In 2008, the country imported 3.6 million m3 of softwood lumber valued at 700 million dollars, according to the Wood Resource Quarterly (WRQ). Two years later, in 2010, the volume had increased to 9.4 million m3 and in 2013, China imported close to 17 million m3 of lumber, valued at a bit over 3.6 billion dollars.

    Canada and Russia are the two major suppliers of lumber to China, with Canada having overtaken Russia as the largest supplier in 2010. Together, these two countries supplied almost 80 percent of all imports. However, this year Europe, Russia, Chile and New Zealand have all increased their shipments to China at a higher pace than has Canada. Sweden, for example, more than tripled its export volume from 2012 to 2013 to reach 370,000 m3, or just over two percent of the import volume last year.

    This trend, where countries that just a few years ago were virtually non-existent in the Chinese market are now expanding is likely to continue in the coming years both because China's continued hunger for more wood and because Canada is not likely to expand exports much more than the levels seen over the past few years.

    Importation of softwood logs to China really took off during the second half of 2013. In the 1H/13, import volumes were about 14.8 million m3, and in the 2H/13, China imported 18.1 million m3, an increase of 23 percent in just six months, making 2013 a record year for Chinese log imports. The total value of imported logs reached just over five billion dollars. During the past year, all major log suppliers to China increased their shipments except Russia, which in 2013 shipped the lowest volume since 2004. New Zealand shipments were up by 32% year-over-year, the US increased volumes by 55% and interestingly, Ukraine, which just a few years ago did not export any logs to China, shipped 1.4 million m3 in 2013, a tripling from the previous year, as reported in the WRQ (woodprices.com).

    With record shipments of logs and lumber from North America to China during 2013, it will be very interesting to see if Chinese wood buyers can continue to increase their imports from the US and Canada in 2014 and 2015 when demand for lumber is likely to go up in the US market.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Mar 05 12:44 PM | Link | Comment!
  • Global Trade Of Softwood Lumber In 2013 To Reach Its Highest Level In Five Years

    With demand for lumber being in recovery mode in a number of countries in the world in 2013, global trade of both lumber and logs were on track to reach their highest levels since before the global financial crisis in 2008, reports the Wood Resource Quarterly. The biggest increases in overseas lumber trade have been from Canada to China and from the Nordic countries to Japan.

    Global trade of both logs and softwood lumber was higher in 2013 than it was in 2012 with both products reaching their highest levels traded since before the global financial crises in 2008, as reported in the Wood Resource Quarterly (WRQ). The total value that was traded in 2013 was estimated to be over 50 billion dollars (based on data for the period January-October), with almost two-thirds of the value being that of softwood products. Although shipments of logs have increased faster than shipments of lumber the past five years, the total value of traded lumber is still more than double that of logs.

    Softwood lumber is, by far the most commonly shipped wood product worldwide and the US continues to be the major destination for internationally traded lumber, with Canada currently supplying almost 96% of all imports to the country. Lumber shipped by break-bulk vessels or by container ships accounted for more than half of the total volume of lumber traded in the world in 2013. The largest overseas trade flows were between Canada and Asia, followed by shipments from Sweden to the United Kingdom and Northern Africa (see detailed trade data in the latest issue of the WRQ).

    The biggest changes in overseas lumber trade in 2013 have been a continued increase in exports from the Nordic countries to Asia (mainly Japan) and from North America (mainly Canada) to China, while there has been a decline in trade within Europe and in shipments from most supplying countries to Northern Africa, according to the WRQ (woodprices.com). The unrest and uncertain political situation in Egypt has left supplying sawmills searching for alternative markets and many lumber companies in Europe and Russia have found new opportunities for increased sales in Asia over the past 12 months.

    There has been an unprecedented increase in demand for softwood lumber in Asia the past few years, with the three major importing countries: Japan, China and South Korea together importing more than twice as much lumber in 2013 as compared to five years ago.

    With a strengthening lumber market in the US it is likely that Canadian sawmills in the western provinces may redirect some of their current shipments that are currently going to Asia into the American market in the coming year. As a consequence, opportunities would rise for European and Latin American lumber producers to expand exportation to both Japan and China.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jan 21 12:56 PM | Link | Comment!
  • Wood Fiber Costs For Hardwood Pulp Producers Have Fallen 17% In Two Years And In The 3Q/13, Were The Lowest They Have Been Since 2009

    Wood fiber costs, which account for about 60% of the production costs when manufacturing pulp, have been in steady decline in many parts of the world for the past two years, reports the Wood Resource Quarterly. In the 3Q/13, the Hardwood Fiber Price Index (HFPI) had fallen 17% since 2011, while the Softwood Fiber Price Index (SFPI) was down 10% over the same period.

    The wood costs for the global pulp industry have trended downward in a majority of the pulp-producing regions of the world the past two years, according to the Wood Resource Quarterly (WRQ). This has mainly been the result of lower prices for market pulp but also because of reduced pulp production and increased supply of wood fiber in some regional markets.

    As the costs of energy, labor and chemicals have changed relatively less than those of wood fiber the past year, the wood cost as a percentage of the production costs when manufacturing pulp have fallen. In the 2Q/13, wood fiber costs accounted for just over 59% of the production costs on a worldwide basis, down from approximately 63% in the 2Q/12 but up from 51% in 2006, according to Fisher International.

    Although wood fiber prices have trended downward for most of the past few years, softwood fiber prices were actually up from the previous quarter in the 3Q/13 in most countries worldwide with just a few exceptions including Sweden, Brazil, and Australia. The largest price increases were seen in the US South, Germany, France and Spain.

    The Softwood Fiber Price Index (SFPI) edged up to $97.94/odmt in the 3Q/13, as reported by the WRQ (woodprices.com). This was $0.19/odmt higher than in the previous quarter but over 10% lower than two years ago.

    The Hardwood Fiber Price Index (HFPI) fell for the fourth consecutive quarter to $98.15/odmt in the 3Q/13. This was down 2.3 % from the previous quarter and the lowest level since the 2Q/09. The biggest price declines have been in Asia and Latin America, while wood costs in Europe, Russia and North America have continued to be relatively stable the past year. In just two years, the HFPI has fallen by almost 17%.

    Note. The Global Wood Fiber Price Index is a weighted average of delivered wood fiber prices for the pulp industry in all regions tracked by the publication Wood Resource Quarterly. These regions together account for 85-90% of the world's wood-based pulp production capacity.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jan 21 12:54 PM | Link | Comment!
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