The European Softwood Conference, held in Rome in October, gave a glimpse of the future as it looked at developments and projections for Europe’s softwood imports and exports. In the time-honoured tradition, each of the importing countries – Belgium, Denmark, France, Germany, Greece, Holland, Italy, Spain and the UK – issued a paper outlining the current economic trends together with a background of factors likely to affect softwood consumption the coming year. The Belgian representatives estimated a GDP of 1.5% for 2005, a marked drop from the 2.7% in 2004, but housing starts were up on 2004 by around 3.8% due to low interest rates. In spite of the slowdown in the Belgian economy, this year’s softwood imports are on target to peak at 1,617,000m3 but are likely to fall back through 2006 to 1.55 million m3.
With a GDP of 2.4%, the Danish economy has been following a steady path. Last year, softwood imports increased by a small margin of 0.2% to 2,171,241m3, but the trend appears to be poised to fall back to 2,016,000m3 for 2005, and to firm at 2,037,000m3 for 2006.
The French delegation reported a recovery last year with growth reaching 2%, but this figure is expected to fall during 2005 to 1.4%. Softwood imports in 2003 amounted to 3,129,362m3 then jumped to 3,282,522m3 in 2004, the highest volume being in whitewood, which accounts for 85-90% of imports. The imported timber market satisfies 30% of French domestic consumption, which stands at a total of 10 million m3.
In a similar way to France, the German economy began to improve during 2004 after a period of stagnation and GDP rose into whole percentage figures to 1.6% (0.2% 2002, -0.1% 2003). Softwood imports dropped in 2004 by 6.06% to 4,029,623m3, and the situation during 2005 is predicted to remain at the same level. Imports for 2005 are expected to fall to around 3.7 million m3, but could increase during 2006 to 4 million m3.
Greece sits at the top of the nine importing countries in terms of growth. Although the figures are on a smaller scale, the GDP reached 4.2% during last year, and are estimated to reach 3.5% this year with a continuance through 2006. Total imports of softwood increased during 2004 by 4.15% to a figure of 539,000m3. The final volume for this year is likely to be 493,000m3 with an outlook for 2006 of 510,000m3.
In the Netherlands, softwood imports in 2004 reached 2,541,000m3, slightly down on the previous year, but forecasts for this year put the figure at 2.6 million m3 with a further increase of another 70,000m3 for 2006. Dutch importers have voiced concerns over the growing proportion of externally planed goods which is reducing revenue through their planing mills.
Last year Italy’s growth pattern rose by 1.2%, and construction proved to be a powerful force in helping the economy to move forward. Softwood imports increased by 6.93% to 6.095 million m3 from the 2003 level of 5.7 million m3, with Austria supplying over 3.5 million m3. In the first six months of this year, imports rose over the corresponding period in 2004 by just under 2%, but the outlook for 2006 is more pessimistic as softwood imports are expected to fall by around 100,000m3.
The Spanish economy has sustained a high level of growth over the past two years at over 3%, and indicators for 2005 point to a rise in GDP of 3.4%. The predictions for 2006 are that growth will fall back to around 2.9% and housing starts will cool down, but the actual figures will still be the highest of all the nine European countries at 611,000 units per year. Softwood imports for 2004 fell by 4.74% to 2,338,617m3 from a 2003 total of 2,454,899m3. The estimated level of imports for this year shows a rise of 51,232m3, approximately 2.5%, and forecasts for 2006 predict volumes will slip back again by a figure of just over 47,000m3.
The UK’s imports hit a record high of over 8 million m3 during 2003, and only eased back by 2.6% in 2004 to 7,926,000m3. Last year Sweden was the largest exporter to the UK, shipping 2,684,000m3, but Latvian and Estonian shippers lost ground by 285,000m3 and 128,000m3 respectively. Forecasts for softwood importation for this year stand at 7,444,000m3, and little change is predicted for 2006.
Exporters
Austrian softwood exports during 2004 were recorded as 7.3 million m3, an increase of 10% over the 2003 level. In the first half of 2005 nearly 3.7 million m3 were exported, largely supported by business from Italy, and a 25% increase to the US market.
Although countries like Austria have increased sales, the US still imports most of its softwood from Canada, taking just over 45.5 million m3 in 2003, and 49.2 million m3 in 2004. Canadian exports for 2005 are estimated to achieve 55.85 million m3, falling back to 54.8 million m3 in 2006. Canadian sawn softwood is now estimated to account for 19% of global production (NB: Canadian volumes are shown in nominal measure).
In contrast to the volumes from Canadian exporters, the Czech producers’ delegation reported a drop in softwood exports during 2004 and forecasts anticipate a further reduction in exports during 2005 and 2006 to 2.2 million m3 and 2 million m3 with a rising level of imports over the same period.
Industrial dispute
Finnish output fell by 1% to 13.4 million m3 during 2004, with an even split between the two main species redwood pine (49%), and whitewood spruce (51%).
To put the production figures in context, in 2003 Finland had its highest level of production since 1985 and the gap between consumption and exports remained consistently proportionate.
During 2004 exports reached 8,405,000m3, a rise of 2.1% over the 2003 figure of 8,234,000m3. Projections for this year must take into account lost production from the employment dispute in the pulp and paper sector, and the fact that mills are also reigning back production due to log supply and cost. With exports trailing at the half year by 7.3%, an estimated figure of 7.5 million m3 for 2005 has been tabled, but no forecasts for 2006 were published.
The Federation Nationale du Bois presentation spoke of growing activity in the French sawmilling industry. Last year softwood production hit 7.7 million m3 but exports were only shown as 800,000m3, as most of the volume was consumed internally.
German softwood production increased in 2004 by 12.5%, and continued to grow by 2.5% in the first half of 2005 driven partly by strong demand from the US market for planed goods. Softwood production for the whole year is expected to reach 18.8 million m3 with a steady demand for exports and a strengthening market for packaging and pallet wood. In the first half of 2005, exports of softwood rose by 26.7% while domestic demand faltered by some 3.9%.
During 2004, exports accounted for 4,962,000m3, a rise of 20.4% over 2003 with significant gains made to the US, UK and French markets.
A growth in domestic consumption has had an effect on the Latvian wood industry, changing the focus from being an exporter of just basic sawn softwood. During 2004, the exports of softwood decreased by 9%, but earnings increased by 3% as more value-added processing increased the revenue in spite of decreased volume.
Total softwood exports for 2004 were 2,366,000m3, against the higher figure of 2,607,500m3 in 2003. The estimates for 2005 are 2.3 million m3 with a reduction of 100,000m3 to 2.2 million m3 in 2006.
Norway’s overall softwood export figures have followed a downward trend, as the volumes in 2004 fell to 439,000m3 from the 2003 figure of 476,000m3. Estimates for 2005 are pitched at 420,000m3 with a modest increase predicted for 2006 to 450,000m3.
In the Russian Federation, the production of sawn wood amounted to 19.8 million m3 in 2004, 1.7% lower than in 2003. This year, total sawn wood production is expected to be around 20.6 million m3, 4% higher than last year.
Exports of softwood increased during 2004 to 12 million m3, approximately 19.6% above the 2003 level. It is estimated that the figure for 2005 will show further increases amounting to 14.3 million m3.
Swedish exports have been rising during the past few years, and in 2004 the figures hit 11,309,000m3 the second highest on record since 2002 when they peaked at 11,454,000m3. Planed goods have been on an upswing since 1990 when they were at 1 million m3; during 2004 they reached 4,099,000m3.
In the first seven months of this year, production through the mills rose by 4.8% which represents another 450,000m3 on 2004 figures. For the whole of 2005, it is estimated that the figure will rise to 17.9 million m3 but then start to ease back through next year.
As a result of the January storms, many of the mills in the south have significant volumes of wind-thrown logs ready for conversion. This year the shippers estimate that export volumes will rise to 11.9 million m3 but reduce in 2006 to 11.5 million m3.
Turning to the US, total exports were down by 13% to 1.9 million m3 during 2004, compared to a figure of 2,176,000m3 shipped in the previous year.
During the first seven months of 2005, exports rose by 7.4% with the largest individual increases to the Dominican Republic and Spain. The largest volume (25%) was shipped across the border to Canada. US exports for this year are expected to reach 2.03 million m3 with a further recovery in 2006 to 2.091 million m3.
