Queensland Forest & Timber Industry Plan Industry Leaders Forum 23 August, 2012

Transcription

1 INTERNATIONAL WOOD SUPPLY: WHAT ARE THE TRENDS? PREPARED FOR PREPARED FOR Queensland Forest & Timber Industry Plan Industry Leaders Forum 23 August, 2012

2 Topics How will global wood supply and demand trends affect Australian markets? What role will (international) imports play in the Queensland market? What export opportunities will emerge? What are the implications for Queensland s forest-growing and processing sectors? 1

3 GLOBAL WOOD (FIBRE) MEGATRENDS Strong China drive to secure wood globally (and other fibre) Russia supply potential but infrastructure limitations and rising costs North America crash in housing starts dropping lumber & panels demand, pine beetle cutting BC volumes Europe Euro crisis depressing wood products demand but energy uses growing. g South America rapid growth in pulpwood supply but rising land costs limiting expansion Oceania growing plantation supply to domestic and regional markets Plantation development increasing in South-east Asian countries such as Indonesia, Thailand and Indochina region Africa politically-stable countries attracting plantation investors India now starting to compete with China for imported fibre. 2

4 CHINA AS BLACK HOLE FOR WOOD China s imports of wood raw materials and products have increased by 120 million m³ in roundwood equivalents (RWE) since Million m 3 in RWE Recovered paper Pulp Wood products Roundwood Future 2030: 2% CAGR = 253 million m 3 5% CAGR = 466 million m 3 7% CAGR = 692 million m E2010 Source: Comtrade 3

5 SUPPLY 4

6 FOREST AREA BY REGION AND FOREST TYPE During the last 10 years, fast-growing plantations have been responsible for more than 60% of the wood supply for the incremental wood pulp capacity. These plantations are typically located in regions with favourable growing conditions for wood, mainly in Latin America and South-east Asia. Nordic countries Western Europe Eastern Europe Russia USA Canada Latin America Japan China Rest of Asia Oceania Africa Primary forest Modified natural forest Seminatural forest Productive plantation Protective plantation Million ha 5

7 WOOD SUPPLY/DEMAND MAIN DRIVERS/DEVELOPMENTS Stable/decreasing Increasing energy demands. long-term supply potential. Increasing softwood plantations supply and growing energy uses. Nordics increasing reliance on local supply, reduced capacity needs fewer imports. Russian wood exists but much is currently economically inaccessible Incremental harvest potential softwood logs and biomass. Rapidly-increasing plantation pulpwood supply and new demand from wood pulp and panels capacity. Increasing interest t in plantations ti for wood products and energy. China, growing demand and imports Japan declining i slowly. l Increasing supply based on existing and new plantations, exports to continue. Limited expansion potential. 6

8 EUROPEANS HAVE PLENTY OF FORESTS Percentage of total forest area Country Total forest area Productive forest Growing stock, Growing stock per ha, million ha area million ha million m 3 m 3 /ha NV Russia Sweden Finland Germany Norway Poland Baltic countries Source: EFI & FAO

9 AND THE POTENTIAL TO INCREASE HARVESTS BUT NOT EASILY ACCESSIBLE Industrial roundwood in 2009, million m 3 80 Harvest potential Local production Harvest increase potential Over-harvesting Norway % 80 16% 62% Sweden Finland e Baltics % 0 e NW Russia 162% e = estimate Source: FAOstat, Pöyry Germany 75% Poland -1%

10 DEMAND 9

11 INDUSTRIAL VS. ENERGY WOOD WAR FRONTIERS Due to subsidies, biofuel companies can pay more for wood raw material and plantation land. This will drive up both land and wood prices. Million m³ Bioenergy disturbing wood markets Bioenergy emerging, but behind Europe Competition over plantation wood and land Energy use not competing with industry Potential conflict between fuel and industry use 400 Abundant potential supply Europe Russia North America Latin America Oceania Africa Asia Sawlogs / plylogs Pulpwood Other industrial roundwood Fuelwood / energywood Note: Figures refer to the year

12 2020 PELLET DEMAND PEAK From 15 million t/a 45 million t/a by Western Europe Russia China Japan & Korea Million tonnes Source: Pöyry Multiclient Study, 2020 Wood Pellets Becoming A Global Commodity Released on April 20, 2011 Source: Pöyry Management Consulting 11

13 The European demand will have consequences for the whole forest and wood products sector Ambitious targets and National Renewable Energy Action Plans may create major wood deficit in the European Union. Millio on m 3 (sub equivale ent) Surplus ~100 million Deficit ~100 million m 3 Supply Demand Supply Demand Forest biomass supply (IPCC Scenario A1) Forest biomass demand Material Use Forest biomass demand Energy Use Supply gap 2020 Theoretical surplus 2010

14 PANELS GLOBALLY LIMITED TRADE MOVEMENTS Total 2010 volumes: 261 million m 3 North America Europe Rest of Asia China Latin America Production Consumption Source: Pöyry Management Consulting Rest of the World *Europe includes Turkey and Russia COPYRIGHT PÖYRY 13

15 SOFTWOOD GLOBAL Total 2010 volumes: 260 million m³ North America Europe Rest of Asia China Production Consumption Latin America Source: Pöyry Management Consulting Rest of the World *Europe includes Turkey and Russia COPYRIGHT PÖYRY 14

16 GFC DRAMATIC FALL IN SOFTWOOD LUMBER DEMAND IN WESTERN MARKETS Consumption of sawn coniferous wood products in North America and Europe million m3 DOT COM 230 BUBBLE -3% =6Mm FINANCIAL CIRISIS -38% =78Mm OIL CRISIS -21% =28Mm 3 ENERGY CRISIS/ GULF WAR -24% =34Mm 3 GLOBAL RECESSION -11% =18Mm

17 SO EUROPEANS AND NORTH AMERICANS LOOK TO OTHER MARKETS The Europeans have focused on Australia. Pacific Rim focused on China. Thousand m GFC Currency Other Lithuania Estonia Czech Republic Austria 500 Sweden 0.6 Germany 400 Chile United States Canada New Zealand 0.2 AUD/USD AUD/EUR Source: WTA, Oanda 16

18 FURNITURE IMPORTS AUSTRALIA Indirectly, the panel industry is exposed to competition from imported furniture from Asia. Although the demand for furniture is growing, it is imports that have captured that growth rather than domestic production. Australian Furniture Imports over Demand -real Australian Furniture Imports over Production -real % 45% 30% 25% 40% 35% 30% 20% 25% 15% 20% 10% 15% 10% 5% 5% 0% % Strategic question for further analysis What are the panel furniture segments that are most exposed to this trend? Which panel players supply to furniture exposed to substitution by imports? 17

19 IMPORTS OF WOODEN FURNITURE Wooden Furniture, Million Units AUD/USD Wooden Furniture, Other 12 Wooden Furniture, Office Wooden Furniture, Kitchen Wooden Furniture, Bedroom AUD/USD Calendar Year 18

20 WHAT ROLE WILL IMPORTS PLAY? European suppliers have established distribution centres in eastern Australia Will continue to service this market, especially while core markets remain depressed Panels and hardwood lumber producers will be affected by growing furniture imports - Australian manufacturers are losing market share. Australian producers are facing strong value chains 19

21 EXPORT OPPORTUNITIES 20

22 GLOBAL TRADE OF INDUSTRIAL WOOD IS LARGE AND GROWING Main wood importers are Japan and China and the Nordic countries. Main exporters are Russia, eastern Europe and Oceania

23 HARDWOOD FIBRE- AUSTRALIA SUPPLY Significant oversupply of fibre, which will have implications: Intense competition for export market share resulting in lower prices Limited existing markets for alternative uses Fragmented resource, estimated 40-50% unlikely to be replanted. Million m 3 (RWE) Native Forest Total NT Plantation Pulpwood NSW & QLD Plantation Pulpwood 6 WA Plantation Pulpwood 4 2 Tas Plantation Pulpwood Vic & SA Plantation Pulpwood Source: Pöyry Management Consulting Year Data from 2012 onwards is a Pöyry estimate 22

24 AUSTRALIA SOFTWOOD LOG EXPORT BY DESTINATION Softwood supplies in Australia are constrained. Logs uneconomic to process locally are exported now mainly to China 000 m Other Malaysia Japan Indonesia Taiwan UAE Sth Korea China e Source: WTA, Pöyry 23

25 EXPORT OPPORTUNITIES Chinese fibre demand creates some potential for exports, but mainly log/woodchip Constrained softwood log supply outlook nationally - some log export potential Very large hardwood pulplog supply overhang challenge to get this into the market at acceptable prices - makes marginal supply regions even more marginal Specialty products hardwood lumber, poles and piles emphasise the strength and special qualities of the Australian species Pellets the likely (but as yet unproven) growth in Japanese and Korean pellet markets creates opportunities 24

26 WHAT ARE THE IMPLICATIONS FOR QUEENSLAND S FOREST INDUSTRY SECTOR? Competitive value chains: Efficient sustainable fibre supply Scale plants Full paying use of residues. Innovation to capture highest-paying uses of product - CLT is one example Support for investments to maintain the above. 25

27 END SLIDE. THANK YOU! CONTACT: Doug Parsonson Vice-President