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August/September 2016
   

 

 

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Market Watch

 

In This Issue
Global Wood Fiber Prices: 2Q2016 Insights from Forest2Market's Western Hemisphere Benchmark
Wood Fiber Supply and Demand in the Baltic Rim
Declining Electricity Prices in the Northeast Hinder Biomass Market
Fiber Shortage, Mill Closures Put Pressure on BC Wood Pellet Operations
Accurately Measuring Forest Sustainability
US Regional Roundwood Prices Trend Down in 1H2016
North American Leaders Commit to Aggressive 50% Clean Power Goal by 2025
LignoTech Partnership Highlights Changing Dynamic, Markets for Forest Products Companies
How to Change Public Perceptions of Forestry and the Forest Products Industry
Put the Pedal to the Wood: New Biomaterials Produced from Forest Resources
South Carolina Forestry Commission to Host Export Convention

Quick Links

 



By Daniel Stuber

Forest2Market's Western Hemisphere Benchmark allows producers to compare their own raw material costs to the market average in one of several ways. The first is by end-product segment. If, for example, you produce boxboard, you can compare your costs to the market average for all boxboard producers. The second way you can benchmark your performance is by product species. If you consume conifer (softwood), you can compare your costs to those of all other softwood consumers (the same is true for hardwood). Third, you can compare your costs by region. If you are in the US South, for instance, you can compare your costs to average costs in the US South. Finally, because markets for pulp and paper are global, you can understand your relative cost position compared with other producers in the Western Hemisphere.

 

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By Tracy Leslie
The latest data from Eurostat indicates that the EU is on target to meet its renewable energy target of 20 percent by 2020. In 2014, with six years left to reach the targets, 16 percent of the region's energy was derived from renewable sources. The Baltic Rim countries have been some of the most successful, with Sweden (49 percent), Finland (38 percent), Estonia (25 percent) and Lithuania (23 percent) already exceeding their shares. Denmark (30 percent), Latvia (40 percent), Poland (15 percent) and Germany (18 percent) are on trajectory to meet their targets, though they have yet to do so.
 
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Declining Electricity Prices in the Northeast Hinder Biomass Market

By Eric Kingsley

In 2015, New Hampshire set a record for biomass use: 2.6 million tons of low-grade wood was converted to electricity. In 2014, biomass accounted for roughly 22 percent of Maine's total harvest volume. Depending on local markets, biomass represents between 20-30 percent of the harvest volume in the Northeast, which equates to a significant amount of electricity produced from renewable resources grown in local forests.

 

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Fiber Shortage, Mill Closures Put Pressure on BC Wood Pellet Operations

By John Greene

Currently, a wood fiber shortage in British Columbia (BC) is impacting the forest products industry in the region and, on the surface, the shortage simply doesn't make sense. As one of the top-producing wood baskets in the world, the availability of high-quality wood raw materials in BC is widely known. As is often the case, the current situation stems from a combination of changing market conditions and entities with competing interests that have been hogtied by government regulation to the point of gridlock.

 

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Accurately Measuring Forest Sustainability

By John Greene

The biological sustainability of a forest can accurately be measured via two primary methods. The first method seeks to measure the volume of forest inventory; analyzing inventory changes over time is an effective way to gauge the balance of growth and removals in a specific geographic area. In this scenario, inventory increases indicate that biological tree growth outpaces removals, and inventory decreases indicate that removals outpace tree growth.

 

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By Daniel Stuber
Despite some disparate regional data, delivered prices for roundwood followed a general downward trend based on Forest2Market's 1H2016 data[1]. Favorable weather conditions and low fuel costs during the last four months have freed up supply and nudged prices lower. With the exception of the Northeast/East Canada region, supply has not been an issue on a national basis. The following data compares 1H2016 price averages to the same period last year for our four primary operating regions: US South, Pacific Northwest (PNW), Lake States and Northeast/East Canada. In addition, a comparison for conifer sawtimber between the US South and PNW (West-Side) is provided.
 
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By John Greene

In a recent announcement made from the North American Leaders' Summit in Ottawa, leaders from the US, Mexico and Canada said they will commit to an action plan boosting their use of wind, solar and other carbon-free sources of electricity. The goal is to generate at least 50 percent of North America's energy from "clean" sources by 2025. As ambitious as this goal is (since 2001, the European Union, for instance, has been working towards a clean energy goal of 20 percent by 2020), North American leaders feel that the continent has the "capacity, resources and moral imperative" to demonstrate global leadership on building upon the 2015 Paris Agreement on climate change.

 

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By John Greene
As traditional forest products companies continue to adapt under volatile market conditions that include shifting demand and increased regulation, new opportunities may seem elusive. Generally speaking, the foundational end-use products that the forest industry has been manufacturing for decades haven't changed; there will always be demand for logs and lumber, paper, biomass and tissue and towels, for example. Global growth in many of these segments is localized and limited. Improving the traditional forest products supply chain is a proven method for increasing profitability in a static market. As the old saying goes, however, there's only so much blood in a turnip.
 
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By John Greene
The Committee on Forestry (COFO) of the Food and Agricultural Organization of the United Nations (FAO) recently held its annual gathering in conjunction with World Forest Week in Rome-a series of meetings and events sponsored by the FAO as well as its partner organizations and institutions. World Forest Week is an opportunity for sharing state-of-the-art knowledge and major accomplishments and achievements in the forestry field on a global scale.
 
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By John Greene
As the pace of new technology quickens and continues to generate viable market opportunities for biochemicals, biofuels and other biobased products, wood raw materials will play an important role as an abundant, flexible and valuable feedstock. We recently reported on the breakthrough from Sweden's KTH Royal Institute of Technology in the development of wood-based windows and solar panels, and a recent report confirms that researchers at Clemson University are eying a totally new market for biomaterials produced from forest residues: auto parts.
 
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By Forest2Market
Later this year, the South Carolina Forestry Commission will host the 2016 Southern Forest Products Export Conference in Charleston, SC-one of the most important and productive ports cities in the US South. The two-day meeting will focus on uncovering and developing key global markets where Southern forest products can compete. A number of world-class speakers are lined up to address current market conditions in key countries, and share successful export experiences covering a variety of forest products.
 
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