ISC 2016: European lumber suppliers upbeat about 2017 export market

Softwood lumber

The 64th International Softwood Conference held in Paris over October 13 and 14 had one of the highest attendance ever – almost 200 participants.

This year’s conference opened with the traditional market analyses with experts suggesting that 2016 is set to be a record year for the highest volume of sawn softwood traded globally. Furthermore, moderate growth observed in 2016 is expected to continue into 2017. From 2011 to 2015, softwood production grew by 14%. North America and Europe remains the biggest producers and are the main drivers of the rise in global production. Consumption in Europe is showing positive signs of stability while the availability of raw material is overall encouraging. Some challenges persist however and on average 2017 may see lower log availability.

“The economic recovery that is taking place will continue into 2017 and will have a positive impact on the timber market in the EU. The demand for timber product is expected to grow but it is linked with and dependent on the construction market. At the moment wood in construction is spreading everywhere. A continuous balance and stability in the market is appreciated by all players in the market,” Mr von Möller, president of the European Timber Trade Federation, stated.

The Middle East and North African region presents a very relevant export market for several European countries. However, years of political instability have seen softwood consumption stagnating. It is likely that the present challenges will affect exporters in the years to come.

China and Japan will remain strategic markets for European exporters while India has a big potential because of its favourable demographics and rapid real estate growth, coupled with relatively easy conditions of market access.

Commenting on the Brexit vote, European Organisation of the Sawmill Industry President, Sampsa Auvinen, stated that the effects are still unclear, rendering it difficult to make realistic forecasts. Nevertheless business activity has been vibrant in the first eight months, with housing starts being very strong. However in an uncertain environment, the industry will remain influenced by currency fluctuations which can redirect trade flows in unpredictable ways.

Evaluating wood availability, Mr Auvinen stated that “in Europe there is an ongoing threat of overcapacity in pulp logs, bark and sawdust.  In Finland forest chips are being subsidised, putting pressure on sawmills’ by-products”. Moreover, the situation has worsened also due to cheap fossil fuel prices and a couple of warm winters. Other country representatives also expressed similar concerns.

The next edition of the International Softwood conference will take place in Hamburg next year.