TTF’s managing director David Hopkins introduced the market discussion. Mr Hopkins emphasised several features of the current market which were echoed by many EOS Members.
Most European countries have seen a buoyant do-it-yourself market as people spent more time at home and invested in home improvements. The construction of temporary hospitals and major infrastructure projects added to demand for structural carcassing. The pallets and packaging sectors were also doing well on the back of a strong health and retail sector.
However, the coronavirus has impacted many sawmills across Europe. International trade, travel and business restrictions helped cause volatility in lumber markets which forced sawmills to reduce its production.
Anecdotal evidence seemed to indicate that the industry as a whole faces a 10% production slump in 2020 with by-product markets also facing an upheaval.
It was noted that there were significant regional differences in the impact of the virus. Northern European countries have navigated this crisis overall much better than Southern European countries.
The reduction of economic activity has been greater in the South. Also, the activity level of sawmills in the hardest-hit countries is only now coming back to normal, but there are many sawmills still operating at reduced levels of production.
In overseas markets, volumes and prices dropped significantly but both Asian and the US markets were doing better than expected. EOS members described the problems with low availability and increased freight rates.
Looking at the future, there is significant industry-wide uncertainty. The construction sector has, overall, held up better than initially feared, it seems that this is due to many projects and investments already in the pipeline being completed. In the coming months it is likely that the building sector will be subdued, and this could portend a longer crunch period.
While the coronavirus pandemic was the most visible challenge, bark-beetle outbreaks are a continuous concern for the industry. Many sawmills, especially in Central Europe, are bracing themselves for high quantities of damaged raw materials in 2020.
The future of spruce stands, in particular, seems especially endangered by climate-related disturbances. The European Organisation of the Sawmill Industry has tasked researchers to come up with an ambitious project, a real-time forest information system – which has already been presented to the European Commission.
This will provide accurate information to the wood processing industries in the context of a circular and sustainable Green Economy. At the same time, this tool will be beneficial to guarantee healthy and resilient ecosystems.
The EOS reported that from 2022 the Harmonised System will include codes for structural engineered wood products, such as glulam and cross laminated timber.
Finally, EOS announced that the Annual Report will be published in October 2020 to better reflect the impact of covid-19 on the market.
