WoodWeek – 28 October 2020

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Greetings from your wood and carbon market news team. Looking at log exports where CFR prices have increased for New Zealand pine logs due to increasing demand as China is in its peak construction season. The price for A grade New Zealand pine logs in October ranges from 119-122 USD per JASm3.

In China, log inventory in China has increased about 300k m3 in the last month to around 4.6m m3, with congestion now only at the one area in Lan Shan where there is a 12-14 days delay in ship unloading. Daily log use in China is now reported at 100k to 105k m3 which has increased by 20k m3 from last month.

Meanwhile in Sweden, researchers at Luleå University of Technology (LUT) have designed and built an autonomous forest machine that they say is now ready for in the woods field testing.

Next week we’ll cover the rapid progress being made in the use of satellite imagery and advanced analytics for forestry and land operations. A new R&D collaboration has been set up involving Planet, Mapbiomas, Google and the Gordon and Betty Moore Foundation. The mapping project, NextGenMap is extensive. In fact, it covers seven distinct ecosystems across 300,000 square kilometres in Brazil.

The project will also be part of our upcoming FIEA ForestTECH 2020 conference running in Rotorua, New Zealand in mid- November. The presentation will include US-based Tara O'Shea, Director of Forest Programs at Planet. Already, delegates from 14 different countries have registered. So, it's now truly a significant international event.

Last week, at our 5th Annual WoodWorks Conference architects, engineers, developers, project managers and wood manufacturers met in Rotorua. As well as the meeting being one of the first of its type since the easing of lockdown restrictions, it also heralded a significant shift in building trends with a clear focus on opportunities for mid-rise and tall buildings – constructed out of wood.

Through a series of inspirational mass timber building project presentations, all New Zealand-based, our wonderful speaker focused on case studies and shared their learning on prefabrication, project management and innovative building systems. It was a valuable showcase for everyone at the leading edge of wood building and design for manufacturing. Click here for more details and to sign up for regular updates:https://woodworks.events/

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Export log market update

Export Log Market Summary (courtesy of PF Olsen) - Export Log Market: China - CFR prices have increased for New Zealand pine logs due to increasing demand as China is in its peak construction season. The price for A grade New Zealand pine logs in October ranges from 119-122 USD per JASm3.

Log inventory in China has increased about 300k m3 in the last month to around 4.6m m3, with congestion now only at the one area in Lan Shan where there is a 12-14 days delay in ship unloading. While this level of log stock is higher than usual at this time of the year, an increase of 300k m3 was not unexpected as China went through Chinese National Day Holiday week in the first week of October.

Daily log use in China is now reported at 100k to 105k m3 which has increased by 20k m3 from last month. The busy construction season that we predicted is happening. There are differing views on how long this activity will last, but it would be good for New Zealand log suppliers to see stock levels reduce during this high demand period.

The CAIXIN manufacturing PMI index moved down slightly in September from 53.1 to 53.0. This shows the sector remains healthy. (A PMI above 50 indicates expansion and the August number of 53.1 was the highest since January 2011).

Due to the increase in export log prices and domestic structural prices the PF Olsen Log Price Index increased by $3 in October to $119. The index is currently $3 below the two- year average, $5 below the three-year average, and $4 below the five-year average. For the last three months the index has tracked along the same path as the corresponding period last year.



Basis of Index: This Index is based on prices in the table below weighted in proportions that represent a broad average of log grades produced from a typical pruned forest with an approximate mix of 40% domestic and 60% export supply. (graph period is March 2010 to Sep 2020)

China wood manufacturing markets - The weakness of the furniture markets (both China’s domestic and export markets) has contributed to the rapid shrinking of the medium density fibreboard (MDF) market. China exports of furniture products fell 24% to 7.4b USD in the first half of 2020. A rise in customised home furnishings in China has also led to the rapid development of the particle board market (low density fibreboard), at the expense of MDF.

New Zealand exports of fibreboard to China fell 27% in the first of 2020. Overall, China imports of fibreboard were down 26% in the first half of 2020. China exports of fibreboard was down 21% in the first half of 2020. This trade was affected by Covid-19 issues affecting both supply and demand. China’s imports of particleboard were up 15%, and exports were down by only 1%, despite the Covid-19 impact on trade.

There are currently 32 fibreboard production lines under construction in China with a total output capacity of 6.51 million m3 per year. The fibreboard production lines under construction will come on-line over the next two years. This will lift the total annual fibreboard production capacity in China to 56 million m3. Recently, the Guangxi Lelin Group and Dieffenbacher concluded a deal for a 600,000 m3 per annum formaldehyde-free fibreboard project. This, the Group claims, will be the largest single-line production plant in the world. The continuous press is 2.7m wide and 80 m long.

Five new particleboard production mills with an annual output of 1 million m3 have recently become operational in Shandong, Jiangsu, Anhui and Guangxi Provinces of which four are continuous flat pressing lines with annual output capacity of 950,000 m3. 25 particleboard production lines were under construction in China in the first half of 2020 with annual output of 6.96 million m3.

China export of plywood to Europe is back to normal levels but exporters are having to cope with increased freight costs from 1,400 USD per FEU to 2,000 USD per FEU over the last couple of months. The strengthening CNY against the USD has also meant exporters have requested price increases of 3-5% which the market is resisting due to uncertainty as Europe suffers further Covid-19 impacts.

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Source: PF Olsen Wood Matters



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China currency surge helping exporters

New Zealand exporters are benefiting from a soaring yuan which is pushing Chinese purchasing power higher.The improving returns for NZ exports to the country’s largest market come at a time when covid-19 is battering the global economy, and NZ’s tourism receipts.

The yuan, already on a tear, got a further leg up after news the Chinese economy expanded 4.9 percent in the third quarter from a year earlier, backing up recent projections from the International Monetary Fund that China will be the only major economy to grow in 2020.

Source: BusinessDesk


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ForestTECH 2020 - Record registrations

Every year, one forest technology conference draws you together. We design it alongside Australasian forest resource managers, inventory foresters, researchers and tech developers. It’s the one event where remote sensing, GIS, mapping and forest inventory specialists get together. It is, of course, our FIEA ForestTECH Conference.

As covered in previous issues, this year, one of the two days for ForestTECH 2020 will also focus on mechanised planting and automated silviculture. Three additional workshops are also been run for those attending the event in Rotorua and for the very first time, because of border restrictions that still apply, the full two-day event is going to be streamed live for those unable to get into Rotorua, New Zealand.

“For this year’s event, we’ve got record registrations already” says FIEA director, Brent Apthorp. “We’d like to think it’s the content (both the topics and the presenters) that we’ve lined up."

For those of coming to Rotorua, in addition to the two-day conference and trade exhibitions, three half day workshops or meetings are running at the front and back end of the event to capitalise on those who’ll be attending in person. “Many of our delegates are saying, in the current environment, they consider business events such as conferences to be the safest type of meeting, anywhere in the country. The organisers control just how they’re run and know exactly who's there.

Record numbers of registrations have been received from Australia, Canada, the USA, Chile, Colombia, Finland, Germany, Malaysia, Indonesia, Singapore, South Africa, Sweden and the UK. This year, our ForestTECH 2020 Conference has well and truly extended its reach internationally.

If you and your team plan to register to attend (in person or virtually), registrations are still open at made here. Note: Recorded presentations and power-points (subject to speaker consent) will be available to all registered and paid delegates post-event.



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Swedes try next steps for forest machine automation

Sweden: Autonomous forest machine ready for testing - In Sweden, researchers at Luleå University of Technology (LUT) have designed and built an autonomous forest machine that they say is now ready for in the woods field testing. "We have replaced everything that humans do with intelligence on the machine; with computers working together and controlling it. We have created conditions for the machine to be better than humans, and will now test that," said Magnus Karlberg, Professor of Machine Design at Luleå University of Technology.

In 2014, Professor Karlberg and his colleagues began sketching on the autonomous terrain vehicle that can be used as a research platform. Since then, Karlberg and other researchers and students at the university have worked to make the vehicle as smart and robust as possible. Luleå University of Technology (LUT) has collaborated with a number of academic and indústry stakeholders in the development of the autonomous terrain vehicle including Poclain Hydraulics, Swedish University of Agricultural Sciences (SLU), Forestry Cluster, Holmen Skog, SCA, Sveaskog, Norra Skogsägarna, Parker, Nord-Lock, Expander, and Olofsfors. Now it’s ready for the forest.

The purpose is to conduct tests in a number of areas to develop autonomous technology for machines and other equipment used in agriculture and forestry. It is a unique machine – there is no other like it in the world as far as we know, said Magnus Karlberg.The ten-tonne machine can be controlled with a remote control but also be programmed to perform work entirely on its own. The machine is currently powered by biodiesel and is built without a cab, but with a conventional powertrain, crane, pendulum arms, and sensors.

An autonomous vehicle must be able to perceive its surroundings. We have equipped the machine with sensors so that it can make good decisions and to increase safety. For example, if a person gets too close, the machine should turn itself off, explained Magnus Karlberg. The autonomous terrain vehicle opens up for a number of research collaborations with, among others, forestry companies and universities in Sweden and abroad. The researchers are for example investigating how site preparation (e.g. scarification) and transport of logging residues can be done in a more sustainable way.

In the forest, soil damage is a major concern and we want to significantly reduce the proportion of area that is affected. In one of our projects, we are working together with Swedish forest companies to do soil preparation in a completely different way than is done today. We also study productivity. How is it possible to make various operations efficient and cheap, but also environmentally considerate and socially acceptable? We work with research questions to meet these challenges. With the machine, we can do tests and see that it works in reality and not just in a computer environment, said Magnus Karlberg.

Professor Karlberg is convinced that autonomous terrain vehicles will change agriculture and forestry but that it is still a number of years away before these types of vehicles becomes common in Swedish forests. Man will be present even when these vehicles go autonomously in the forest but will do other things. Instead of sitting in the cab, you may be some distance away and control several vehicles via remote controls, envisioned Magnus Karlberg.

Photo credit: Luleå University of Technology

Source: bioenergyinternational.com






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Carbon Market Update

NZUs Last Week - Following the weekend's landslide victory for the Labour party NZUs have firmed a little to push through $35 once again. Volume trading at this level remains very light, although not for lack of buyer interest.

NZU holders are enjoying the current price level - now effectively above the $35 fixed price option which remains in place until end May 2021, in respect of calendar 2020 liabilities. However, sellers will no doubt be conscious that the first quarter of 2021 will also see the Government joining the sell side in a new way.

Today saw the announcement of the auction operator - the work of developing and operating the auction service has gone to a joint bid by the NZX and the European Energy Exchange.

That announcement confirms that timing appears to be on track - regulations supporting the auction were also recently released and the planned date of the first auction will be 17 March.

That first auction is expected to be for some 4.75 million NZUs (with some 19 million planned to be made available at auctions over 2021). There will be an auction reserve floor price of $20, with further volume able to be released under a cost containment measure that has a trigger price of $50.

Earlier on it was proposed that there would also be some sort of technical reserve price that would have been benchmarked against the secondary market - a price level below which buyers at auction would not have been supplied. But that idea appears to have fallen by the wayside, at least for the first auction.

To date, no emitter has even been able to buy an NZU from the New Zealand Government at less than $25. From next near, however, in theory, that could change.

With the secondary market currently delivering $35 for a spot NZU and the New Zealand Government adopting an auction floor price of $20, it's fair to say that a lot will hinge on who turns up on the day.

Source: Carbon Match (https://carbonmatch.co.nz/)



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East coast report predicts more debris

Report: Prepare for more large deluges of logs being washed off hillsides in coming years - Huge tracts of pine forests on unstable land on the East Coast are soon to be harvested, meaning there's a high risk of more destruction and floods caused by forest debris.

That was one of the conclusions of a report into the source of the woody waste that littered beaches near the mouth of the Waiapu River, near Ruatoria after storms in June and July.

The report, by Gisborne District Council principal scientist Murry​ Cave, studied the material from the air and on ground.

By assessing a particular site the report found that about 46 per cent of the wood was forestry slash (pine logs, offcuts, waste and branches) of various ages. About 36 per cent was native wood, 14 per cent was willow or poplar and the rest was farm posts and battens.

The wood differed from the huge amount deposited at Tolaga Bay after destructive flooding in 2018. That was nearly all pine.

While the forestry industry funded a clean-up of Tolaga Bay after the 2018 flood, it would be unlikely to do so for this year’s event given so much of the material was not from forestry, Cave said.

The report also used satellite imagery to establish the types of forestry in the catchment. While it was not possible to pinpoint exactly where the wood waste came from, it did reach several conclusions. It found that the native wood mostly came from gullies formed following the clearing of land for pastoral farming, and that much of the pine came from forestry planted or stored near a river.

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Source: Stuff News


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SnapSTAT - sponsored by COP






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Canada: Mandatory recording devices for transport operators

The Government of Canada is committed to improving road safety in Canada by taking measures to reduce commercial driver fatigue, which is why it has mandated the use of electronic logging devices.

This week, the Minister of Transport Garneau announced FPInnovations has been accredited as the first third-party organisation to certify electronic logging devices. This is a critical step that ensures an electronic logging device is safe, reliable, and approved for use in Canada.

Electronic logging devices are tamper-resistant devices that are integrated into commercial vehicle engines. They are intended to ensure that commercial drivers stay within their daily driving limit and accurately log their working hours.

In 2019, Transport Canada announced that all federally regulated commercial trucks and buses operating in Canada would need to be equipped with a certified electronic logging device to better track drivers' hours of driving, work, and rest.

Transport Canada, in partnership with the Standards Council of Canada, worked diligently to develop a plan to allow for third-party testing and certification. Only certified electronic logging devices will meet federal requirements.

Prior to mandating the use of electronic logging devices, the department worked closely with industry to determine an effective implementation timeline. Transport Canada is committed to meeting the coming-into-force timelines for electronic logging devices, which remains June 12, 2021.

Canada's electronic logging device requirement is the result of longstanding collaboration among all levels of government and industry partners. It also addresses a coroners recommendation following the tragic collision involving a sports team.

Best practices have shown that third-party certification for electronic logging devices will ensure a consistent, reliable, and accurate certification process. FPInnovations has a specialised expertise in this area. By having the highest quality certification process possible, Transport Canada will ensure that devices are tested and certified to be in full compliance with the regulations.

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Almost finally ... NZ's best sausage rolls celebrated

NZ’s best sausage roll found - Nothing fuels hard working forestry folks like a bit of traditional Kiwi kai, so when we heard who makes the best sausage rolls, we thought you’d like to hear about it. Turns out the majority of the top ten bakers are in Auckland and Canterbury.

If you have ever visited Goldstar Patrick’s Pies in Tauranga you will have see the walls of his café lined with certificates and seven Bakels Supreme Pie Awards trophies. Patrick is New Zealand’s most awarded and last week, much to his surprise a new, shiny trophy was added to his collection - first prize for best sausage roll baker in the country.

606 bakeries from across New Zealand entered. Judges had to work their way through a mountain of sausage rolls in the blind judging process. They were looking for a traditional sausage roll of specific weight and length with perfect, beautifully laminated pastry and a great tasting filling.

NZ Bakels managing director Brent Kersel says it competition certainly lived up to its expectations. Entries were received from right across New Zealand, including 80 from the South Island. He says, “People eat with their eyes and food has to look good first. If you can get a sausage roll to look good and back it up with flavour you know that you’re onto a winner.” Mr Kersel says it has been a tough year for bakeries with the impact of Covid and this competition was to encourage people to get back into the bakeries and buy pies and sausage rolls.”

Top 10 winners
Gold - Patrick Lam, Goldstar Patrick’s Pies, Tauranga
Silver – Marijke Isley, The School Shop, Takaka
Bronze – Michael Meaclem, Michaels Bakery-Hillmorton, Christchurch
Highly Commended – Bunna Hout, Euro Patisserie, Torbay, Auckland
5th – Rob Smith, Smoko Bakery, New Plymouth
6th Angkor Bakery, Mangere, Auckland
7th Percival Street Bakery, Rangiora
8th Burwood Bakery, Christchurch
9th Corner Bakery Hillsborough, Auckland
10th Randwich Park Bakery Coffee, Manurewa, Auckland.

Kersel adds, “We sort of planned for how big this competition could be. Initially we were going to include it in the Bakels NZ Supreme Pie Awards (which had to be postponed due to covid-19). We’re pleased now that we didn’t because it turned out to be bigger than we thought. We doubled the number of judges two weeks after the entries opened and ended up with 606 entries. That was an amazing response for this first year of the competition.”


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Buy and Sell



... and finally ... time for a laugh

On my last assignment, my English teacher accused me of plagerism.
Her words, not mine.

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Only in our crazy western world ... do we leave cars worth thousands of dollars in the driveway,
and put our useless junk in the garage.

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The world tongue twister champion has just been convicted in court.
I hear he’s going to get a really tough sentence.

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Scientists have discovered trees have a way of communicating with other trees......it’s called "Whats Sap!"



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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