International timber demand recovers

International forest products demand is recovering after the recession, according to the UNECE Timber Committee.

The organisation’s latest Forest Product Annual Market Review, released today, states that forest products consumption in the UNECE region, which includes Europe, the former Soviet CIS countries and North America, rose 5.6% in 2010 and that the first half of 2011 saw a continued modest increase in sales.

Fastest consumption growth came in Europe with a 6.6% rise, followed by the CIS at 6.3% and North America 4.1%.

Production of industrial roundwood across the UNECE in 2010 was 950 million m³, an increase of 8% on the year before, but still 15% below the peak year of 2006. The harvest in Europe and the CIS, were up 10% and 17% respectively to 380 million m³ and 148 million m³ (excluding fuelwood). North America saw less strong growth and recorded its second lowest harvest after 2009 at 430 million m³.

A key driver for the timber market in Europe and North America, said the UNECE, was small recovery in house building. Whether this will continue, it said, is unsure, although the US saw a 2.5% rise in the seasonally adjusted building permit rate in June over May to 624,000.

Of the UNECE’s main wood product sectors, sawnwood demand wa 8.3% ahead of the year before and wood based panels 4.8% in 2010.

Despite demand improving only slowly, timber prices in its region, said the report, rose sharply in the review period. By March they had climbed to nearly match their record high.

The one area where prices dipped was the US south, due to storm and flood damage resulting in a glut of salvaged timber.

The wood energy market continued to grow in 2010 too. Pellet production was 16 million tonnes, up over a third on 2009. With planned capacity increases, output is expected to hit 20 million tonnes in 2011.

The biggest influence on the UNECE countries’ timber business has been the continued rapid growth of the Chinese forest products and timber sector. Its output has doubled in five years, hitting US$300bn last year.

China has seen particularly strong growth in panel products manufacture. Its output in 2010 was 160 million m³, compared to the UNECE region’s 120 million m³.