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Temperate Hardwood Markets

Temperate Hardwood Markets. Rupert Oliver Editor hardwood markets .com. European beech Trade Trends. Growing importance of China/Hong Kong In 1999 52% of EU exports Leading exporters Germany – 43% of EU exports by value France – 23% of EU exports by value

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Temperate Hardwood Markets

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  1. Temperate Hardwood Markets Rupert Oliver Editor hardwoodmarkets.com

  2. European beechTrade Trends • Growing importance of China/Hong Kong • In 1999 52% of EU exports • Leading exporters • Germany – 43% of EU exports by value • France – 23% of EU exports by value • Italy a significant sawn exporter based on Baltic logs • Impact of European storms • Increased activity in Eastern Europe • Poland supplying Northern Europe • Romania – recent European and Chinese investment hardwoodmarkets.com

  3. European beechSupply this year • Storms created uncertainty • Normal harvesting in Northern Germany • French public harvests restricted to storm damaged stems • Concerns over quality • Sawmilling • Focused on storm felled logs • Process completed by end of 1999 hardwoodmarkets.com

  4. European beechDemand this year • Outside EU • China imported heavily in first 6 months • High stock levels • Fierce resale price competition • Rejecting windblown beech logs • Inside EU - Logs • French mills heavily stocked • Demand not expected to rise until new year • Inside EU – Sawn • Firm demand for best grades • Improving economy and weak euro • Lower grade market unsettled hardwoodmarkets.com

  5. European beechProspects • Remains a popular species • European markets strengthening • Chinese stocks absorbed quickly • Shift in Asia from sawn lumber to logs hardwoodmarkets.com

  6. European oakTrade • Trade insular • France leading exporter • Eastern Europe • Logs from Hungary & Ukraine • Croatian sawn to Italy & Austria • Polish and Ukrainian sawn to UK and Spain • Volumes small compared to American trade hardwoodmarkets.com

  7. European oakSupply • Last season logs restricted as harvesting focused on beech • Extraction of storm felled oak on-going • Good availability of green logs • Worries of worm infestation • Sawn lumber supplies at normal levels hardwoodmarkets.com

  8. European oakDemand • Logs • Stave manufacturers maintaining high purchases • Good demand for quality sawing logs • Downward pressure on lower grade prices • Sawn lumber • Demand for quality lumber firm • Strong dollar encouraging switch from American to European hardwoodmarkets.com

  9. American hardwoodsTrade Trends • Net exporter • United States • Lumber exports at record levels in 1998 • May be exceeded this year • Canada • More rapid growth in exports • US domestic demand • Canadian’s compliance with customer requirements hardwoodmarkets.com

  10. American hardwoodsSupply and Demand • Supply • Relatively low log decks • Tight margins in the milling sector • Demand • Strong first half domestically and on export markets • First half exports exceeded 1999 levels • US exports to China more than doubled • Expectations of slower second half • Hopes of a “soft landing” in the US • Europe slow due to weakness of euro • Asia intensely competitive • Much hinges on dollar exchange rate hardwoodmarkets.com

  11. Significant trendsManufacturing shift to low cost locations • New competition for North American and European manufacturers • Many manufacturers exploiting the trend • Purchase of dimension and components • Lower costs of production • Improved control over costs • Insurance of quality • Reduced capital investment • Savings on transportation hardwoodmarkets.com

  12. Significant trendsPrices and Exchange Rates • Rising prices • US prices reached record levels in early 2000 • Beech prices boosted by Far Eastern demand • Volatile exchange rates • Huge capital movements • Reliable predictions increasingly difficult • Traditional supply/demand analysis inadequate • Dependent on external events • Company strategy to handle volatility • Just in Time Trading • Diversification of supplies and markets • Shift out of commodity markets hardwoodmarkets.com

  13. Significant trendsChanging trade structure & internet • Concentration of importing sector • Shortening supply lines • Reliance on Just in Time • New internet trading facilities • Shipping lines interactive services • Particularly benefiting American shippers hardwoodmarkets.com

  14. Significant trendsNew species, substitution & veneers • Market more receptive to new species • Limited availability & high prices • Chinese manufacturers experimental • Rapid rise in Italian use of tulipwood • Substitution • MDF for furniture, mouldings, internal joinery • Solid wood replaced by panels with veneer covering • Growth in the veneer sector • European veneer production rising • Strong sales growth in Southern and Eastern Europe • Sales to Asia growing less rapidly • Development of Asian veneer industry based on imported logs hardwoodmarkets.com

  15. Significant trendsForest certification • Increasingly important marketing role • Demand still restricted • Forest sector recognised benefits • Maintaining and expanding market share • Maturation of PEFC, SFI, FSC etc • Supply driven growth hardwoodmarkets.com

  16. Significant trendsGlobalisation • Globalisation of financial markets, trade structures, corporations, and communications networks • Massive increase trade complexity • Division between tropical and temperate eroded • Reversal of trade flows • North America and Europe selling to tropical Asia • Pace of change set to intensify hardwoodmarkets.com

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