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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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  • The Revival Of The Softwood Fiber-Based Forest Industry In The Nordic Countries Have Investment Plans Of Over Three Billion Dollars In Pulp, Bio Energy And Bio Materials

    Forest companies in Northern Europe have announced plans to investment three billion dollars in 2014 in attempt to move beyond mostly producing newsprint and commodity packaging grades. The idea is to diversify their product lines to include new bio-products from wood fiber and to generate bioenergy to reduce the region's dependence on fossil fuels, reports the Wood Resource Quarterly.

    The pulp and paper industry in the Nordic countries has started to see a new dawn with a growing demand for pulp and paper products made from long wood fiber from the vast conifer forests in Northern Europe. Just over the past few months, there have been a number of announcements in investments made by forest companies in Finland, Norway and Sweden totaling close to three billion dollars.

    The primarily end-products will be softwood market pulp and virgin fiber-based container board, but major investments are also being consider in increasing the utilization of forest biomass for energy on a larger scale. Although the investment decisions have not been finalized for all projects, these ruminations are a sign that the forest industry in this part of the world sees the future in a much brighter light than just a few years ago.

    In addition to the investments in the pulp and paper industry, there has also been an announcement that the Swedish forest owner federation Sodra, together with the Norwegian energy company Statkraft, Europe's largest producer of renewable energy, intends to establish an biofuel conglomerate at the site of the now closed pulpmill in Tofte, just south of the capital Oslo.

    In Finland, Metsä Fiber has plans to invest 1.5 billion dollars in a plant that will produce softwood pulp, renewable bioenergy and what the company categorizes as "various bio-materials".

    Some of the factors that have placed softwood fiber in a new positive light are: limited investments in the establishments of softwood plantations worldwide, favorable global supply/demand balance for softwood pulp over hardwood pulp, (if you are a pulp manufacturer), increased demand for packaging material requiring wood fiber with high strength, and a rise in research in new products made from trees, sometimes as substitutes to non-renewable materials such as plastic and metal.

    These recent developments in the Nordic countries may very well be the beginning of the biggest transformation of the softwood fiber-based forest industry we have seen in decades, not only in Northern Europe but in other regions of the world as well where coniferous forests is the dominant forest-type.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 09 5:03 PM | Link | Comment!
  • Timber Harvests In The US And Canada Have Gone Up For Four Consecutive Years With Log Exports And Softwood Lumber Production Driving The Higher Demand For Logs

    Increased North American log exports and higher softwood lumber production in the US and Canada have resulted in a steady rise in timber harvests on the continent from 2009 to 2013, according to the Wood Resource Quarterly. However, despite the recent upward trend in log production, harvest levels in North America were still 40% higher ten years ago than they were last year.

    Timber harvests in North America were up for the fourth consecutive year in 2013, reaching 510 million m3, based on analysis by WRI. However, despite an annual increase of three percent each over the past four years, harvest levels in North America are still substantially lower than what they were before the great recession. Ten years ago, the total timber harvest in North America was about 40% higher than in 2013, and just the harvest in the US itself at that time was more than what was logged in all of North America last year, as reported in the Wood Resource Quarterly.

    In 2013, softwood removals in the US were up by three percent from the previous year, primarily as a result of higher log exports to Asia and increased domestic lumber production. Higher manufacturing of hardwood lumber and of OSB were the main drivers of the increase in hardwood timber harvests last year.

    Demand for logs from the pulp sector, which consumed about 45% of the total timber harvest in 2013, fell as a result of lower pulp production and increased availability of residuals chips from the sawmilling sector. However, logging activities varied throughout the country with some regions, such as the northeast and part of the South, recording only modest increases in roundwood removals, while for example the forest-rich western Oregon harvested 13% more volume in 2013 than in 2012 thanks to log and lumber exports to Asia.

    Timber harvests in Canada have gone up every year since 2009, reaching over 130 million m3 in 2013 - almost 30% more than in 2009. A combination of higher log exports to China, a rise in OSB production, and increased demand for logs from the domestic lumber industry have been the major drivers for higher log demand the past few years. The timber harvest trend in Canada has mirrored the US trend with much higher harvest volumes ten years ago, a sharp decline in 2008-2009, followed by a slow and steady increase the past four years.

    End-uses for harvested timber in Canadian are quite different from those of the US with as much as 71% of the logs being consumed by the sawmilling sector and only 15% by the pulp sector.

    Dec 07 1:43 PM | Link | Comment!
  • Global Trade Of Softwood Lumber Was Up Seven Percent In The First Six Months Of 2014, With Russia, Germany And Sweden Increasing Shipments The Most

    Higher demand for wood products following the global recession has resulted in a steadily increasing trade in softwood lumber the past five years, reports the Wood Resource Quarterly. Global shipments in the first half of 2014 were up seven percent as compared to the same period in 2013.

    Demand for softwood lumber has been steadily increasing on a worldwide basis since the great recession. The higher consumption of lumber has resulted in a rise in the global trade of lumber with shipments in 2014 on pace to be the highest since 2006 and 36% higher than five years ago, which was the bottom of the decline in lumber trade, reports the Wood Resource Quarterly.

    About two-thirds of the world's lumber production is consumed domestically, while the remaining third is traded internationally, either to countries that consume large volumes of wood products such as the US, China and Japan, or to countries with limited domestic forest resources, including Egypt, Italy, the United Kingdom and the Netherlands.

    During the first half of 2014, global lumber trade was seven percent higher than during the same period in 2013. Most major exporting countries have shipped more lumber this year than last year, with only New Zealand bucking that trend.

    Russian exporting sawmills have ramped up production to record levels this year and the export volumes are up almost 15% as compared to the same period last year. Much of the rise in shipments has been to China, Egypt and the CIS countries. Lumber producers in both Sweden and Germany have also shipped more lumber in the 1H/14 than they did in the 1H/13. Export volumes for these two countries may in fact reach their highest levels in at least seven years if lumber demand in particularly Egypt, China and countries in Western Europe continues to stay strong.

    Lumber importation volumes to China, the largest softwood lumber importer in the world, have zigzagged their way upward so far this year, starting from as low as 1.1 million m3 in February and reaching the highest monthly import volume on record in July. Russia and Canada are still the two dominating suppliers, accounting for 77% of the total import volume. This share was unchanged from 2013. Other supplying countries, including Chile, the US and Sweden continue to keep about the same share of the market this year as they did in 2013.

    Dec 07 1:40 PM | Link | Comment!
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