WoodWeek – 26 August 2020

growing info milling transportation forest products

Click to Subscribe - It's FREE!

Greetings from your log export market news team.

To the markets … okay, market (singular): China’s stock of softwood logs at ocean ports has increased by 3.6% to 4.6 million m3 at the end of July. Radiata pine inventories have increased by 6.9%. China's imports of softwood logs for the first 6 months of 2020 reached 17.5 million m3, down 16% year-on-year. New Zealand exports reduced by 2.2 million m3, whilst European exports increased by 121% year-on-year (Europe’s total export volume increased to 4.8 million m3).

WoodWorks Conference - This is the final week for Earlybird rates for our tall wood conference in Rotorua. It features a full session on our tallest timber building yet: the 9-storey all-timber Auckland City Mission Homeground high-rise building in downtown Auckland. This masterpiece of CLT and LVL is New Zealand’s version of the record setting ‘Brock Commons’ building in Vancouver. Click here to see the program and register.

ForestTECH Conference - Despite uncertainties in Australia, our forest technology annual event is running as planned on 18-19 November in New Zealand and online. Some changes to the usual format to cope with Covid-19 conditions are in place for this year's event. Subject themes are split for the first time between remote sensing, data capture and forest inventory and forest establishment, mechanised planting and silviculture, two half-day workshops. In-field demonstrations are planned both before and after the planned conference and exhibition. Click here to register.

This week Linda Sewell announced her resignation as Chief Executive Officer of OneFortyOne, effective 28 August, 2020. Linda joined OFO in April, 2013, soon after the purchase of the forest estate owned by ForestrySA in South Australia and Victoria, as the first independent CEO of OFO. Under her leadership OFO grew into a vertically integrated forest products company, with forest estates in both Australia and New Zealand with over 500 employees. Andy Giles Knopp will continue to serve as Acting-CEO on her departure, having been OFO's Chief Financial Officer since 2016.

Earlier this week, MPI provided this market update snippet - Due to current high inventory levels of both logs and lumber, Chinese wholesale market prices are unlikely to recover quickly in the short term. However, due to demand from construction for lumber and peeling logs, demand increased towards the end of July 2020, and the approaching busy period of September, October and November may drive C&F prices up sooner.

Subscribe a friend | Unsubscribe | Advertise Here
Share |

This week we have for you:

Recent Comments

ANZ Research Agrifocus: Forestry markets

Global uncertainty is unprecedented. While much of the world continues to deal with the day-to-day health issues associated with battling COVID-19, those countries who have managed to contain it are now focusing on their economic recovery, while keeping a nervous eye out for second waves of infection.

These uncertain times are providing plenty of challenges, but also some opportunities, for our primary producers. We rely on export markets to sell the vast majority of our produce and in the same way many countries rely on New Zealand producers to help sustain their people.

The outlook for some of our export products is very much at the whim of how the economies of particular countries perform. For example, returns in the forestry industry are closely linked with construction activity in China. Luckily China boasts one of the few economies that are expected to grow this year, albeit at a much slower pace than normal.

Huge Volatility in Pricing - Forestry returns are easing in the global market but remain strong locally. There is strong demand in the domestic market for timber as house builds get back on track, but we fear there will be an easing in the local housing market later in the year as the labour market weakens. Export returns have eased now that stocks have rebuilt in China. Global demand for logs is expected to wane – building, manufacturing and export activity is subdued due to the detrimental impact of COVID-19 on the economic health of global economies.

Wharf-gate Log Price Ease - Wharf-gate returns for logs have eased as weaker global demand, higher shipping costs, and a strong NZD all work against exporters. The volume of logs in stock on wharves in China has grown and prices have eased as a result. Supply to China ramped up again once NZ’s forestry industry was able to resume work when lockdown conditions were eased to level 3 in late April.

This resulted in surge in logs being exported from New Zealand to China, which quickly alleviated the previous shortfall. But now the level of offtake of logs from China’s wharves has eased and prices have too. This reduction in demand is a normal seasonal trend that occurs when construction activity slows during the hot summer months.

The supply of logs into China from Eastern Europe remains strong. These are spruce logs that are being rapidly harvested in order to stop the spread of a spruce beetle infestation that has already devastated many forests in Eastern Europe.

The in-market log price has now fallen 12% below the 5-year average. Pricing is no longer sufficient to attract logs from Uruguay and Argentina as the higher shipping costs from South America to China make the trade unprofitable.

More >>

Source: ANZ Agri Focus August 2020


Comment on this story    


Log market summary

Thanks to PF Olsen for this week’s market update.

PF Olsen China Log Export Market Update

The CFR sale prices for logs has increased slightly as expected. The A grade price in early August was 112 USD per JASm3 and the forecast for late August/early September is 115 USD per JASm3.

Log inventory in China has been stable over the last month and sits around 4.2 million m3 although log stocks are expected to increase in the Lan Shan area where port discharge rates have recently increased. Daily port off-take has increased by an average of 5k (8%) per day over the last month and is now 70km3 per day. The current daily usage is the same level as in August 2018 and 2019. This indicates construction and other activity in China has stabilised to normal levels. The significant difference from previous years is the supply coming in from other sources.

There is more log volume arriving in China from more countries. During July, the supply of softwood logs from New Zealand and Russia has been less than from the other countries combined. This is the first time this has happened since New Zealand started exporting significant log volumes to China. While New Zealand’s log supply has remained strong the Russian supply has reduced over the years as their ban on log exports has taken effect.

Log exports to China from North and South America increased 35% over the first six months of 2020. Exports of Southern Yellow Pine (SYP) logs increased by 25% during the first six months of the year. This increase is mainly explained by the suspension of the retaliatory Chinese government tariffs on US forest products. The Australian supply increased to 590k m3 in June, which was 27% or 110k m3 higher than any previous month.

Source: PF Olsen

More >>



Comment on this story    


Log exports: Back over 2 million m3 in June

New Zealand’s softwood log exports in June totalled 2.022 million m3, crossing the 2.0 million m3 threshold for only the third month on record. Although well short of the record 2.141 million m3 recorded in March 2019, the big lift in exports reverses a downwards trend, especially for shipments to China. The average export price declined to NZDFob158/m3, around USDFob102/m3. At 18.800 million m3 for 2019-20, New Zealand’s softwood log exports were 15.0% lower than in 2018-19.

The chart, created in IndustryEdge’s Wood Market Edge online, from data released just a short time ago, clearly shows the recent rebound in exports and confirms that for China in particular, a relatively long period of declining imports from New Zealand, has ended. At least for now.





Comment on this story    


Scion: Ligate adhesive technology growing

Commercial trials are proving the value of Ligate adhesive technology in a growing range of engineered wood products.

Engineered wood products like plywood and fibreboard are made from of thin layers or wood particles bound together with adhesives. They are a ubiquitous part of modern homes and offices. The adhesives traditionally used include petrochemicals and the final wood products can emit volatile organic compounds like formaldehyde at levels that may be toxic for people.

Scion scientists decided to address this problem not just by lowering levels of formaldehyde emission but by removing petrochemical components from the adhesives all together. The result was Ligate – a water-soluble, 100% biobased and sustainable adhesive technology.

The chemists and materials technologists who developed Ligate redesigned the adhesive system from the ground up. The inherent properties of each component, including lignin, a by-product of pulp and paper manufacture, were considered, as well as how the components might interact with each other and be utilised together.

At the same time, the final adhesive had to be able to be made in existing manufacturing facilities and be able to be “dropped-in” to established wood panel processing operations. This “value chain” approach has allowed for fast scale-up and easier access to commercial plants to refine the Ligate formulations and produce trial material for further applications and product developments.

The odd “sticky” situation has been encountered. Four tonnes of Ligate were successfully manufactured in September 2018 for producing plywood with these panels incorporated as a feature in recent renovations at Scion’s Rotorua campus. More than 20 tonnes of high density fibreboard for interior use have been made (March 2018) leading to product launches planned for later in 2019.

The evidence for the benefits of Ligate comes from extensive science from collaboration with international researchers showing that formaldehyde emissions from Ligate-containing products are lower than the emissions from natural wood. Also, comparisons of the life cycle impacts of medium density fibreboard (MDF) made with Ligate and standard MDF resins show reduced impacts on human health and resource depletion.

This year, Ligate technology is a finalist in the New Zealand Plastics Industry Design Awards, Research and New Innovation Award. It was also NZBIO’s (now BIOTechNZ) 2016 Biotechnology of the Year.

More >>


Comment on this story    


Fined company appeals forestry charges

Forestry company appeals fine of $124,700, claiming it was unfairly singled out

A forestry company that claimed it had been unfairly singled out for its contribution to flood damage near Gisborne in 2018 storms has appealed a $124,700 fine.

DNS Forest Products 2009 Ltd was one of 10 companies prosecuted by Gisborne District Council following destruction wrought by tonnes of forestry waste that cascaded down valleys to the north of Gisborne in two storms in June 2018.

Two other companies had been dealt with for their offending. Juken New Zealand was fined $152,000 late last year. Aratu, formerly known as Hikurangi Forest Farms, was fined $379,000 in January.

DNS pleaded guilty 10 days before it was to stand trial in February. Following that , the council withdrew charges against its alleged co-offenders, A and R Logging and Logic Forest Solutions.

DNS was sentenced by Environment Court Judge Brian Dwyer late last month.

The company held resource consent to harvest 398 hectares of pine trees from Makiri Forest, about 38 kilometres north of Gisborne in the headwaters of the Waihora Valley.

DNS engaged A and R Logging to harvest the wood and build skid sites and roads between them. It hired Logic to oversee and audit the work and report back to DNS, which marketed and sold the logs.

Relationships between DNS and the parties deteriorated and in January 2018 A and R and Logic quit the site.

When the storms hit five months later, they brought down massive amounts of forest waste onto neighbouring properties which blocked waterways, damaged roads and covered the coast in debris.

Damage in the Waihora valley was “extreme”.

More >>

Source: Stuff News



Comment on this story    


Euro-Sino rail links booming

Rail links between Europe and China as part of the Belt and Road (BR) Initiative are now booming in spite of declining subsidies.

Over 1,200 outbound freight trains using BR for the month of July 2020 represents a very significant step up considering that the total number of movements in 2018 was less than 4,000.

Research published in online journal 'Sustainability' in March 2020 estimates that Hamburg to Wuhan freight options rank as follows:

1) CR Express Train: 11,000 USD/FEU: Freight time 12-14 days
2) Ocean Transport: 1,800 USD/FEU: Freight time 30 days
3) Air Transport: 46,000 USD/20 tons: Freight time 4 days

Though rail is significantly more expensive than ocean freight, when considering speed to market it remains a viable option for many companies.

While ocean container freight remains the lowest cost (and by far preferred) option for European forest products: back-loaded trains are increasingly taking cargos of low cost European lumber, and even logs into Western China.

More >>

Source: scmp.com


Comment on this story    


How soon for remote controlled machines?

Remote controlled forest machines are nothing new. The harvester system “The Beast and the Courier”, invented by Christer Lennartsson who we wrote about a while ago, was shown at the Elmia show in 2005. Then, it had already been underway for a couple of years. That concept never broke through. Is now the time for that … ?

Remote controlled forest machines – here we go again

For a couple of years now, the Swedish Forestry Research Institute, Skogforsk, is working on a remote- controlled forwarder. The purpose of the project is to create a more comfortable and safe working environment for the machine operators. With a less physically demanding working environment, Skogforsk hopes to gain higher productivity in logging operations.

Easier to recruit young people to the forest

Another expected effect is that an improvement in the working environment will make it easier to convince a new generation to work in the forest. Few of today’s youngsters want to sit alone in a machine in the forest. If the machines can be controlled from long distances, an officelike environment can be created where the operators can actually sit next to each other, able to talk and have coffee breaks together. This could help in recruiting new fresh blood to the forest.

However, long-distance control is not yet available for this system. More on that below.

Optimization

In combination with the above mentioned working environment and the best digital mapping systems, route planning could be optimized. This could lead to less ground damage and fuel consumption. It should therefore also gain sustainable and environmentally friendly forestry.

More >>


Comment on this story    


Vale Bob Newman

For seven decades this dynamic, innovative, generous, nomadic extrovert left his mark on Australian forestry and beyond. A Jolly Medalist and leader in private forestry, Bob Newman OAM also worked widely as a consultant and contributed hugely to professional and industrial associations.

Born at Barton-on-Sea, Hampshire, UK, 91 years ago, Bob came to Australia in 1946 on his own to train in forestry. His career included early employment with the FCV and CSIRO, assessment and research in Tasmania, alpine management in North East Victoria, overseeing technical developments in the timber industry, lecturing, retailing, extensive consulting and strategic planning, publishing, conference organisation and exceptional involvement in the IFA and AFG, whose amalgamation he strongly supported. Moreover he chaired the Commonwealth Forestry Association and initiated many moves at home and abroad to expand professional development in forestry. In 2018 he successfully submitted a masters thesis to Southern Cross University on support for private plantations.

A leading rugby player in his youth, who played internationally for Combined Australian Universities, he loved music and fellowship, and keenly promoted recognition of foresters in the broader community.


Comment on this story    


Linda Sewell resigns from OneFortyOne

On behalf of the Board of Directors of OneFortyOne Plantations, Pty, Ltd, (OFO), I am writing to inform you that Linda Sewell has announced her resignation as Chief Executive Officer of the Company, effective 28 August, 2020. This news comes with regret but also great respect and support for Linda in her decision. After nearly eight years of demanding hard work, a challenging pace and thoughtful leadership of the Company, Linda has determined it is time for her to embark on a new journey.

Linda joined OFO in April, 2013, soon after the purchase of the forest estate owned by ForestrySA in South Australia and Victoria, as the first independent CEO of OFO. Under her leadership and support by the Board and Shareholders, the Company has since grown into a stable, vertically integrated forest products company, with significant, high quality forest estates in Australia and New Zealand along with timber processing facilities of the same calibre. The Company today has over 500 employees across the two Countries.

Linda has hired and is supported by a seasoned and well-respected leadership team that will remain focused on our shareholders, employees and day-to-day operations. Andy Giles Knopp will continue to serve as Acting-CEO, a role he is well-suited for given his knowledge of OFO's integrated businesses and his experience since 2016 as OFO's Chief Financial Officer. The Board will evaluate options over the coming weeks as related to support for the leadership team and the Company.

As a part of her role through the years, Linda has been instrumental within the industry helping to form the Green Triangle Forest Industry Hub, building relationships on behalf of the Company and industry with Government, and establishing OFO as a respected operator and partner within the regions it operates. In full acknowledgement, Linda leaves the Company well positioned for the future.

Please join us in thanking Linda for all she has done at OFO and wish her good health and great success into the future. Although her last day at OFO will be here soon, we know Linda will remain a part of the OFO family and a key participant in our industry.

Source: John Gilleland, Board Chair, OneFortyOne Plantations


Comment on this story    


Dear farmers - Did you miss the memo?

Preserving Trees Becomes Big Business, Driven by Emissions Rules - California kicked off a market in forest preservation and now energy giants such as BP are betting it’s going to become lucrative.

For much of human history, the way to make money from a tree was to chop it down. Now, with companies rushing to offset their carbon emissions, there is value in leaving them standing.

The good news for trees is that the going rate for intact forests has become competitive with what mills pay for logs in corners of Alaska and Appalachia, the Adirondacks and up toward Acadia. That is spurring landowners to make centurylong conservation deals with fossil-fuel companies, which help the latter comply with ...

More >>

Source: Wall Street Journal


Comment on this story    


Paper wine bottle to save the planet

British sustainable packaging company Frugalpac has launched a wine bottle made from 94% recycled paperboard, which it said has a carbon footprint 84% less than that of glass.

The Frugal bottle is made from predominantly recycled paperboard, and has a food-grade liner insert capable of holding both wine and spirits.

Frugalpac said the 75cl bottle, which is up to five times lighter than a glass bottle, also has a carbon footprint over a third lower than a bottle made from recycled plastic. In addition, its water footprint is also at least four times lower than glass.

The bottle, which can be refrigerated, is easy to recycle, according to Frugalpac, which states that the paperboard can easily be separated from the liner.

In terms of production cost, the bottle is “comparable” to a labelled glass bottle, but the Ipswich- based creator points out that the bottle offers the option for 360-degree branding. The bottle can be produced at a winery on-site, which Frugalpac says offers “complete freedom on design and print” and makes it “more cost effective to transport”.

The bottle uses just 15g of plastic, 77% less than a recycled plastic bottle. It is currently being used by Umbrian producer Cantina Goccia for its 3Q Sangiovese, Merlot and Cabernet Sauvignon blend. The bottle is available to buy from the winery’s website, and also via its UK importer, Woodwinters.

More >>


Comment on this story    


Buy and Sell



... and finally ... Your Wednesday 'punnies'


I like bungalows - there’s just one major flaw.

My aunt Marge has been so ill for so long that we’ve started to call her “I can’t believe she’s not better”.

I can’t count how many times I failed my maths exam.

When life gives you lemons, make lemonade. When life gives you melons, you’re dyslexic.

Those Russian Matryoshka dolls are so full of themselves!

Adam & Eve were the first ones to ignore the Apple Terms & Conditions.

Arial, Tahoma, Courier and Times New Roman walk into a bar. The barman says, “We don’t serve your type in here!”

William Shakespeare walks into a bar. The barman says, “You’re barred!”



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

John Stulen, Editor
Innovatek

Share |

We welcome comments and contributions on WoodWeek. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.

Unsubscribe
Subscribe! It's Free!
Advertise Here
Copyright 2004-2020 © Innovatek Ltd. All rights reserved
Bookmark and Share