Instigated in 1953 the European Softwood Conference has been transformed for 2006 into the first International Softwood Conference (ISC). Hosted by Canada, the Québec Wood Export Bureau (Q-WEB) managed and staged the event at the spectacular Château Frontenac Hotel in Québec City last month.
Twenty-one delegations from 19 countries, representing more than 80% of the global market in sawn softwood, were present for the opening of the conference by Guy Chevrette, honorary president and chief executive officer of the Québec Forestry Industry Council. Notable by their absence were the UK and Denmark – in fact surprise and disappointment were expressed by many who had expected to see the former attending such a major event, especially given the recent growth in interest for wood from Canada.
Sustainable production
A full agenda covered past, present and future development in international markets for sawn softwood and related products and discussed key issues affecting the sector. The good news is that, according to figures from the Timber Committee of the United Nations Economic Commission for Europe, we can be assured of the sustainable nature of the global softwood reserve as harvest of softwood logs remains below long-term sustainable production, with North American felling at 80% of the net annual increment and western Europe 62%.
The annual statistical survey showed that European ISC countries remained a net exporter of sawn softwood in 2005 with 7.7 million m3. For 2006 – and similarly in 2007 – the average net export is forecast to be in the region of 8.2 million m3 from an expected production in Europe as a whole in 2006 of 129 million m3. There is stable growth in Russian production and a forecast of a significant rise of 13.2% in German production owing to installation of new capacity; Swedish production, which rose in 2005 by 5.4%, is forecast to increase again in 2006 by 3.8% and then to fall back in 2007 once most of the windthrow wood from the 2005 storm has been processed. Production in North America reached a peak of 128 million m3 in 2005 but will fall back in 2006, reflecting the deteriorating market in the US.
Consumption in the US is expected to decline to about 106 million m3 following the high of 110 million m3 in 2005. Conversely, demand in Europe is expected to increase by 2.6% to 110 million m3 over the same period.
The statistical analysis also showed the inexorable growth of China as both importer and exporter of wood products. It has become the largest wood products exporter by value and the second largest importer of logs and sawn wood after the US.
Final 2006 housing construction forecasts in the US predict a decline to 1.8 million units, down from the all-time high of 2.2 million units, with further reductions to between 1.56-1.68 million units starts in 2007. The opposite situation prevails in Europe with growth in many markets, especially in central and eastern European countries, of 4% in 2006 and estimates of 6% and 10% in 2007 and 2008 respectively.
Japanese recovery
The Japanese economy has recovered and is now showing signs of growth and remains an important market for producers in the ISC region; there is a growing emphasis on the use of engineered wood products, especially glulam. Australian softwood production, forecast to be in the region of 4.2 million m3 in 2006-2007, is now exceeding the country’s consumption such that some volume is now being exported.
With many Canadian mills closing as a consequence of the North American situation, it is impossible to say how much ‘spare’ Canadian lumber there will be. Reduced availability from the Baltics and Scandinavia that has had the long overdue effect of pushing up prices, if sustained, should see an increasing flow of lumber from Canada to Europe. How this will develop will become clear over the next year or so. The main interest in Canada currently appears to have an eastern emphasis, although coastal BC producers are also seeing more interest of late.
Problems shared
Common challenges to the global softwood industry were dealt with during workshop sessions. To achieve better results in the promotion of wood the importance of collaboration between industry in different regions was highlighted, similarly working proactively with government to avoid and overcome trade barriers was also identified. It was agreed that future softwood conferences should serve as a forum for industry to prepare for such activities. The panel discussion on the market development in China highlighted existing collaborative initiatives, the issue of fire codes used as an example of how cross-continental co-operation can enhance the efficiency of marketing initiatives.
Work aimed at convincing policy makers that specifying increased use of wood products will help in resolving some of the consequences of climate change was the topic of another session. Green building initiatives in North America and “wood in sustainable development” progress in Europe were reviewed, together with public procurement policies in various countries. The last session displayed ongoing wood promotion activities in both Europe and North America with the objective to learn from experiences across different regions.
The new approach for the event debuted in Québec City is to be adopted for future International Softwood Conferences, with the next one scheduled to be held in Geneva during the week of October 8, 2007. This will link to the annual UN-ECE Timber Committee meeting.
