WoodWeek – 15 July 2020

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Greetings from your ”first choice in forest news” WoodWeek team.

While the log traders bill has lost the attention of the mainstream media now, it’s still a sour taste for forest managers. Southern Wood Council chairman Grant Dodson said the bill was “a total lemon” that would create a lot of administrative costs for industry and achieve nothing in its current state. The Forests (Regulation of Log Traders and Forest Advisors) amendment bill would require compulsory registration of log traders and forestry advisors and set up a Forestry Authority to make rules and regulations for forestry practice standards.

Thanks to PF Olsen where their export log market update for June includes commentary on the Eastern European sourced logs. “Eastbound Silk Road rail volumes increased 44% last month, as forwarders capitalised on “heavy” demand with new block-train services from Germany to China.”

Moving to the question of regulated land use for forestry where the voice of reason this week has been from the Farm Forestry Association spokesman Graham West. What both the farming and forestry sectors are doing is searching for the best way forward, post-covid, in terms of investing and adapting. What neither sector needs are knee-jerk regulations that distract from finding real solutions of mutual benefit.

He added, “Government regulation has its place in protecting human wellbeing, fair trade and the environment. We’d like it to do that and still leave us with land use flexibility. These are uncertain times, we need to have responsive land use, not regulated land use.”

Finally, looking to one of the drivers for forest estate planting; the carbon price. We have an update from our friends at Carbon Match. Late last week saw NZUs trade at $32.50 - a new record to date as far as we are aware - before being bid up in volume to $33 for a 50,000 tonne parcel, but with not a single taker on the sell side.

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FAB is a lemon says SWC

Southern Wood Council describes forests amendment bill as 'a lemon' - Southern forestry groups are wary of an amendment that would attempt to control log market prices for the industry.

The Forests (Regulation of Log Traders and Forest Advisors) amendment bill would require compulsory registration of log traders and forestry advisors, and set up a Forestry Authority to make rules and regulations for forestry practice standards.

So far it had reached a lot of opposition, with the majority of submissions against it. The bill is sitting with the committee of whole house in parliament.

Southern Wood Council chairman Grant Dodson​ said the bill was “a total lemon” that would create a lot of admin for the industry, and achieve nothing in current state. The bill was designed to manipulate markets to supply domestic sawmills, however the industry already made it a priority, Dodson said.

While the domestic market was fairly stable and the export market very volatile, they would use the domestic market to stabilise costs as much as they could.

The issue with forestry domestic markets was that it struggled to compete against the larger mills overseas, he said. New Zealand’s largest mill was only half the size of its competitors in Europe.

Forestry Minister Shane Jones said the bill would not force the industry to subsidise domestic sawmills.

The bill would allow for domestic sawmills to have more sale and purchase information, with some logs being sold internationally with sawmills not knowing they were available, he said. As New Zealand began its economic recovery from Covid-19, it was more important than ever that systems were in place so investors had confidence in the advice they received, he added.

Kennington-based Log Marketing general manager Greg Lindsay​ said a strong domestic market was important for a stabilised industry, but he had concerns about the amendment bill from what he had read.

After a spike in export price coming out of lockdown, prices were starting to drop again, Lindsay said. China started to panic that they did not have enough log supply as many countries are still in lockdown but they had now calmed down again, he said.

More >>

Source: Stuff News



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Farm Foresters: No policy required

OPINION NZFFA: Election Forestry Policy Unnecessary - Right now, we are in a Covid-19 recovery phase and an election year. Farmers feel good about keeping the economy going, but are challenged by climate change, freshwater regulations and afforestation. Some press releases strongly defend pastoral farming against encroaching forests, as if we are fighting over land use. We’re not. What both the farming and forestry sectors are doing is searching for the best way forward, post-covid, in terms of investing and adapting. What neither sector needs are knee-jerk regulations that distract from finding real solutions of mutual benefit. A diverse range of viewpoints is good for innovation, so let’s encourage it. The NZ Farm Forestry Association suggests we should avoid the myths, maintain perspective and share some new ideas.

The long-term perspective is that land use change has and should occur in response to developing markets and scientific guidance. As land values rose from 2002 to 2018 approximately 258,000 ha was converted from plantation forests to pasture. Currently about 16,000 to 35,000 ha/yr of pasture is being converted into plantation forests. These figures suggest that both farms and forests have been moving, leaving one class of land for another as markets have driven change.

In general, forests have moved from flat to rolling land in the central north island to steeper and more remote areas of hill country. Since there is about 12.5 million ha of pasture land in NZ, afforestation of pasture is occurring at less than 0.3% per year. This is hardly blanketing the landscape with forests, or significantly impacting on of food production. But this planting might help with the impending carbon bill we will pass to our children.

The proposed Labour party policy regulates only better land - Land Use Classes 1 to 5 - and most of the recent planting is occurring on cheaper marginal hill country that is outside this range. Nonetheless the Farm Forestry Association clearly recognises there is public concern, and we need to explore better ways of achieving the intended goal of meeting New Zealand’s targets for carbon sequestration.

Some alternative ideas are emerging. As one example, while pines are quick, cheap and profitable, higher value exotics like redwoods, fir and cypress may be better suited for harvesting on steep, erodible country. The latest report “Fit for a Better World – Accelerating our Economic Potential” acknowledges the value of this diversity. As another example, permanent carbon forests need to be fast growing and long-lived; and while native species don’t have the growth rates to meet the urgency of the situation, they can be used together with exotics to offer both a short and a long term solution. Mixtures of radically different tree types give resilience to biosecurity risks and improve aesthetics. Most natural forest systems are mixtures.

In the longer term, we may need to harvest such mixed forests with new low impact technologies, perhaps selectively taking and replacing the valuable species. If not, we leave it to future generations to decide. In the very long-term fast-growing exotics forests will naturally convert to native forests.

Government regulation has its place in protecting human wellbeing, fair trade and the environment. We’d like it to do that and still leave us with land use flexibility. These are uncertain times, we need to have responsive land use, not regulated land use.

For more information contact Graham West, Communications Spokesperson, NZ Farm Forestry Association



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Log Export Market Update: June

PF Olsen Export Log Market: China -Log supply into China has increased, with South America and Europe responsible for most of this increase. European supply during Quarter 1 was up over 300% on the last year. Supply from South America will likely reduce as the CFR prices drop in China, but the supply from the damaged spruce forests in Europe will continue as these logs need to be salvaged. The supply line from this salvage harvesting is also not as price sensitive as other supply chains.

Eastbound Silk Road rail volumes increased 44% last month, as forwarders capitalised on “heavy” demand with new block-train services from Germany to China. According to figures from China State Railway Group, eastbound volumes reached 43,000 teu for the month, with the number of trains departing up 39% to 477. And DHL Global Forwarding has launched two new block-trains to meet “heavy customer demand for alternative transport modes and speeding up transit times to Asia”. In late May DHL added another service, from Ludwigshafen to Xi’an, via Poland, Belarus, Russia, and Kazakhstan.

Supply from New Zealand will reduce as New Zealand harvesting slows down in the winter months and many smaller forest owners will suspend, defer, or stop harvesting. There is often a lag in reduction of supply as forest owners complete current jobs, but the harvest of new blocks is deferred.

China can stimulate its construction industry, but it cannot stimulate the markets to which it exports. When compared with the South American and damaged European logs, New Zealand’s radiata logs have superior properties for machining, gluing, painting etc. New Zealand logs therefore have a preferred status with those manufacturers producing furniture, mouldings, machine edged panels etc. But when markets are uncertain and sales for finished products are under pressure, many Chinese manufacturers obviously look to reduce costs in their supply chain. This means they will use the inferior logs, and this places price pressure on the logs from New Zealand.

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Source: PFOlsen Wood Matters


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Logging: New Waratah harvester head

Waratah Forestry Equipment unveiled the new H415HD, a heavy-duty harvesting head with new features and options to suit customer feedback and rugged application needs.

“The new H415HD extends durability to our customers providing another configuration to suit their needs and bolster uptime within the size class of 400 Series model Waratah heads,” said Brent Fisher, product marketing manager for Waratah. “We’ll continue to offer the H415 and H415X models, and the new H415HD will be an additional option for our customers looking for that heavy-duty performer for wheeled harvester applications.”

New features

To increase durability across the range, the frame on the H415HD as well as the H415 and H415X have been strengthened at several locations based on customer feedback – providing more durability and increased uptime. The H415HD’s base weight is 1401 kg (3,089 lb.), which is 71 kg (157 lb.) more than the standard H415.

Standard features of the H415HD include an HD tilt frame with thicker steel plate, expander pins for upper tilt cylinder, feed roller arms, and lower delimbing knives – to improve pin durability and frame longevity. Additionally, HD feed motor and hose guards help improve durability.

Likewise, to lengthen the service life of the saw bar and alleviate interference in some applications, the H415HD’s saw position was changed to provide more room between the saw bar and stem. All three configurations of the H415 heads now feature the possibility for a wider saw bar and improved saw chain tensioning to reduce chain loss, bar wear and promote more operational productivity.

The models also share a lower saw box height (30 mm / 1 in.) creating lower stump height and more wood recovery. This is complemented by an improved lower delimbing knife profile for larger stem sizes.

Expanded options

In addition to being featured on the H415HD, select new features of this model can be configured for the H415 and H415X. Some are also compatible with older H415 harvester heads and can be purchased through spare parts sales.

“With these options for the H415, H415X and the new H415HD, Waratah is providing customers the configurable head they need to increase efficiency and uptime,” Fisher said. “The H415HD is delivering what our customers are telling us they need.”

The Waratah H415HD is currently available to customers in Europe, the United States, Canada, Australia, New Zealand, Russia, Asia Pacific, Brazil and Latin America.

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The Detail: European logs flooded China in 2019

Europe's flow of damaged wood to China: Plus 534% in 2019 - In the 2019 calendar year, Europe was shipping enormous volumes of damaged wood to China. In the first three quarters, deliveries already totaled more than 4.5 million sm³. The delivery volume of round softwood is 3.7 million sm³ or 534% more than Europe shipped to China in 2018.

Germany delivered almost exactly 2 million sm³, when last year it was only 41,000 sm³ in the same period. Czech Republic, also severely affected by damaged wood accrual, exported 1.25 million sm³ (2018: 91,000 sm³) to China.

All other European supplier countries exported 1.3 million sm³ until the beginning of October, 32,000 sm³ of which came from Italy. This, however, does not necessarily represent strong China exports for Italy. Over Q4-2019, there was much talk of Vaia-related damaged wood from Italy being shipped to China.

The 4.5 million sm³ from Europe only make for 12% of China's total round softwood imports in that period. China imported more than 32 million sm³ in the first nine months, as Customs Statistics China reports.

The "top dog" in China is New Zealand with its radiata pine plantation wood. The island country delivered 13 million sm³ (+6%) in the first nine months. Russia shifted its exports to sawn timber, therefore roundwood deliveries dropped 25% compared to last year: 4.6 million sm³ instead of 6.1 million sm³.

Australian deliveries remained stable (3.1 million sm³), while the United States only delivered 2.4 million sm³ (35%).

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Source: Timber-Online.net


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China: Lift in PMI bodes well

Manufacturing Purchasing Managers Index - In June 2020, China's manufacturing PMI was 50.9 percent, up by 0.3 percentage point from last month.

In terms of enterprise scale, the PMI of large and medium enterprises was 52.1 and 50.2 percent, rose by 0.5 and 1.4 percentage points over last month; that of small enterprises was 48.9 percent, fell 1.9 percentage points over last month.

According to the classification index, the five sub-indices composing PMI, the production index, new orders index, and supplier distribution time index were all above the threshold, while main raw materials inventory index and employment index stayed below the threshold.

Production index was 53.9 percent, up by 0.7 percentage point from last month, indicating that the manufacturing production continually improved month on month.

New orders index was 51.4 percent, up by 0.5 percentage point from last month, rising for two consecutive months, indicating that the manufacturing market demand continued to recover.

Main raw materials inventory index was 47.6 percent, higher 0.3 percentage point than last month, indicating that the decline rate of inventory of main raw materials in manufacturing industry has narrowed.

The employment index was 49.1 percent, dropped by 0.3 percentage point than last month, indicating that the employment outlook of manufacturing enterprises has declined slightly.

Supplier distribution time index was 50.5 percent, unchanged over last month, but above the threshold, indicating that the delivery time of raw material suppliers in manufacturing industry has been accelerated.



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Source: Stats NZ


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Reality Check: Look back at 2010 log export markets

Looking back to ANZ Commodity Focus 2010: Log export markets overview - Last year the volume of NZ’s total forestry exports was in the vicinity of 10.6 million cubic metres . Of this, about 8.7 million m3 (or 82 percent) was exported as logs and poles. This share has risen from around 10 percent in the 1960s – a time when the export of logs was a fledgling industry. According to the Ministry of Agriculture and Forestry, the forestry and logging sector directly employs about 6,600 people, with another 12,800 in first- stage wood processing.

After plummeting in 2008, international export log prices have recovered, with prices firming in the past couple of months to a 17-year high. While the improvement in the global economy has been a factor, the bulk of this growth is due to China's growing demand for forest product imports. This reflects a large reduction in logs supplied by Russia and Chinese concerns about the reliability of supply from other suppliers.

In the 12 months to March, NZ log exports totalled $1.2 billion. This made up nearly a third of the value of forestry exports and was 3 percent of the value of our total merchandise exports. The latest figure represents a 38 percent increase over a year earlier and is nearly double the value recorded at the low point of the global financial crisis.

Asia is by far the major destination of our log exports, taking 91 percent of the total value. China has overtaken Korea as the largest individual export market for logs, taking around 55 percent of our log exports in the 12 months to March 2010. Korea retains the highest concentration of log exports, with logs representing over a fifth (22 percent) of all of NZ’s merchandise exports sent there. The equivalent figure for China is 16 percent, with India having the third highest concentration of log exports (14 percent of total NZ merchandise exports sent there).

See the PDF Report from 2010 >>

Source: ANZ Commodity Index and Stats NZ


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Australia: ForestFit for best practice training

Your opportunity to influence the future of training and certification for forest contractors - expressions of interest now open to participate in pilot training program.

Australian forest contracting businesses have had to adapt to more complex and demanding business process changes, reporting and compliance requirements.

ForestFit is being jointly developed by industry and the NSW Government in partnership with Australian Forest Contractors Association (AFCA).

ForestFit will deliver two major outcomes for the forest industry:

  • a nationally recognised and endorsed pilot Training Program for forest contractors
  • a pilot Certification for contracting businesses to deliver quality services in accordance with industry standards and regulatory requirements.

Australia has one of the highest set of standards and requirements for forestry operations in the world.

Initially, ForestFit will be designed and delivered for NSW forestry contracting businesses, with the intent of being customised for national delivery.

Working closely with the Industry Reference Group, and other industry representatives, the ForestFit team is progressing with the development and delivery of the training program and is now accepting expressions of interest for the pilot training program.

Research and assessment, including lessons learned, of existing international certifications has been completed in preparation for the design and development of the certification framework.

Download the Expressions Of Interest Form >>

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Beef+Lamb ‘scaremongering’ says forestry group

‘Slanted and scaremongering’ is how the Southern North Island Wood Council describes Beef + Lamb NZ’s figures on forestry conversions.

Beef + Lamb NZ (B+LNZ) says some 70,000 hectares of productive sheep and beef land has already been converted to forestry since 2019, with carbon-related investment, or ‘carbon farming’ as a major driver for this.

However, the wood-industry lobby group Southern North Island Wood Council (SNIWC) disputes these figures, claiming B+LNZ “don't know the difference between regular forestry and carbon forestry”.

“MPI figures are only 22,000 ha of planted trees. Including carbon forests which so far is only about 10% of that,” said SNIWC on Rural News’ Facebook.

SNIWC said carbon farming, a term employed to describe speculators buying up farms to plant trees for carbon credits, was only invented a year ago.

It said that farmers don’t have much to worry about as such investment covers just 1% of new planting in New Zealand, with plantation forests only covering 7% of the country and farming 46%.

The group also claims B+LNZ’s employment figures on forestry are “completely fabricated”.

B+LNZ says for every thousand hectares of sheep and beef farming, 7.5 jobs are created, whereas in forestry, around 2.5 jobs are created and around 0.5 for carbon farming.

SNIWC says the New Zealand Forest Owners Association figures show around 5 workers are employed per thousand hectares of farming, compared to 7 for forestry.

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Source: Rural News



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Future Foresters - Let's Clear the Air






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Jobs



Buy and Sell



... and finally ... speak like a New Zullander



.............

MURDER AT Pak N Save -- Tired of constantly being broke & stuck in an unhappy marriage, a young husband decided to solve both problems by taking out a large insurance policy on his wife with himself as the beneficiary, and then arranging to have her killed. A 'friend of a friend' put him in touch with a nefarious dark-side underworld figure who went by the name of 'Artie.'

Artie explained to the husband that his going price for snuffing out a spouse was $5,000. The Husband said he was willing to pay that amount, but that he wouldn't have any cash on hand until he could collect his wife's insurance money. Artie insisted on being paid at least something up front, so the man opened his wallet, displaying the single dollar coin that rested inside. Artie sighed, rolled his eyes, & reluctantly agreed to accept the dollar as down payment for the dirty deed.

A few days later, Artie followed the man's wife to the local Pak N Save Supermarket store. There, he surprised her in the produce department & proceeded to strangle her with his gloved hands. As the poor unsuspecting woman drew her last breath & slumped to the floor, the manager of the produce department stumbled unexpectedly onto the murder scene. Unwilling to leave any living witnesses behind, ol' Artie had no choice but to strangle the produce manager as well.

However, unknown to Artie, the entire proceedings were captured by the hidden security cameras & observed by the store's security guard, who immediately called the police. Artie was caught and arrested before he could even leave the store. Under intense questioning at the police station, Artie revealed the whole sordid plan, including his unusual financial arrangements with the hapless husband who was also quickly arrested. The next day in the newspaper, the headline declared ...

"ARTIE CHOKES 2 for a dollar @ PAK N SAVE"





Thanks for keeping up with the latest wood news with us!
Have a safe and productive week.

John Stulen, Editor
Innovatek

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