Key Competitors to Western North American Log and Lumber Exporters

Transcription

1 Key Competitors to Western North American Log and Lumber Exporters Title line 1 Title line 2 in the Pacific Rim Name Bob Flynn Title, date Director, International Timber, RISI Mapping the Course, January 28, Agenda Background first Focus on softwood logs and lumber Competitive Supplier Outlook 2

2 China s timber supply deficit will continue to grow, but at a slower rate 3 China is over 75% of the Asian softwood log import market 4

3 New Zealand is the largest softwood log supplier to China (35%), Russia (30%) and USA (11%); all suppliers except Australia reduced in In , housing starts exceeded sales by 40%, leading to a large glut of unsold properties on the market 6

4 Imports of softwood logs fell 17% in 2015, and will reduce another 5% in 2016 before recovering in China also dominates softwood lumber imports in Asia, with 64% of the total, but these markets more diverse than the log markets 8

5 Russia is building a dominant position in China s softwood lumber imports, and European lumber is also increasing 9 Softwood lumber imports declined 2.4% in 2015, and will reduce another 3.4% in 2016 prior to recovering to a new record in

6 New Zealand s softwood log exports fell by 2.0 million m3 in 2015, but will move higher over the next several years 11 Exports of softwood lumber have been stagnant for a long time, but perhaps about to change? 12

7 New Zealand lumber exports may increase, e.g. e.g. square log exports from LumberCube 13 Port of Jing Jiang What is Dennis Neilson going to do with his 21-year old pruned radiata logs? Total timber harvest in New Zealand is unlikely to go much higher than about million m3, due to aggressive harvesting last 5 years 14

8 Pruned log prices have remained relatively stable, as volume is limited; but prices for A- grade logs tumbled in 2014/ Viewed in terms of local currency, prices for New Zealand logs remain subdued from their high, but Russian prices are greatly improved 16

9 Shipments of Canadian lumber to China have fallen off due to much lower prices, but again prices look attractive to Russian suppliers 17 Russia is the largest supplier of softwood to China (logs + lumber), but despite surge in China s market, there has been no supply response 18

10 Russia s lack of volume to China is NOT due to shipping to other markets in Asia; 98% of logs, 89% of lumber exports in Asia are to China 19 Ukraine supplied 1.6 million m3 of softwood logs to China in 2014, all in containers; but exports are prohibited from Ukraine starting Jan

11 Japan s exports of softwood logs to China will soon surpass Ukraine s; but the subsidies which facilitate this in Japan may end under TPP? 21 Australia has been one of the fastest growing softwood log suppliers, but volume is unlikely to exceed 3.0 million m3 22

12 Australia has a relatively even age class distribution, and significant increase in timber production is not possible 23 European softwood lumber exports to Asia are sizable, with more and more heading to China 24

13 Summary China is the dominant market, 76% of softwood log imports and 63% of softwood lumber imports. No major changes expected in Japan or Korea, but India likely to increase softwood log imports in next several years. China: expect lower softwood log imports (-5%) and lower softwood lumber imports (-3.4%) in 2016, followed by a recovery in Biggest log suppliers will continue to be New Zealand and Russia, US suppliers hurt by strong dollar. Biggest lumber suppliers will be Russia, Canada and Europe. 25 Mark your calendars: 2016 New York City Forest Products and Timberland Investment Conference Third Annual RISI/DANA event in NYC, March 15 & 16, 2016 Conference web page: ent-conference/ Or contact Bob Flynn: [email protected] Highlights: Focus on pension funds and other institutional investors Regional review of global timberland investments RISI market outlooks 26