Global Trade of Wood Products

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1 Global Trade of Wood Products By Ed Pepke Forest Products Marketing Specialist UNECE/FAO Timber Section Geneva, Switzerland

2 Subjects I. Overview of developments II. Global forest products market trends (for roundwood) III. Trade flow trends IV. Flooring market trends V. Market drivers VI. Future prospects VII. Questions and discussion

3 Acknowledgements China National Forest Products Industry Association, especially Mr. Zhang Senlin Mr. Wu Shengfu Organizers and participants of this conference Reviewers in UNECE/FAO Timber Section, Geneva

W W W W W W W W W W Main sources of information UNECE/FAO Forest Products Annual Market Review, 27-28 UNECE/FAO TIMBER database FAO Statistics

4 W W W W W W W W W W Main sources of information UNECE/FAO Forest Products Annual Market Review, UNECE/FAO TIMBER database FAO Statistics State of Europe s Forests 27 by Ministerial Conference for the Protection of Forests in Europe/UNECE/FAO State of the World s Forests 29, FAO W W

5 Main sources of information, continued UN Comtrade validated by European Forest Institute US Foreign Agricultural Statistics Chinese Customs State Forestry Agency, China International Wood Markets Group European Federation of the Parquet Industry

6 I. Overview of developments

7 Globalization of forest products trade Increasing affecting local economies, governments and organizations Positive for consumers Negative for importing countries manufacturing

8 Global, with emphasis on major trade North America (Canada and US) Latin America (Central and South America only) Europe CIS (mainly Russian Federation) Asia (mainly China)

9 UN Economic Commission for Europe region Europe 42 North America 2 Commonwealth of Independent States, 12

10 II. Global forest products market trends

11 25 2 Export Value of Wood and Paper Products Where do exports originate? +52% Billion $ 15 1 $12 billion Europe CIS North America Europe Asia Africa Latin America Oceania Source: FAO, 28.

12 N. America s dramatic downturn US housing starts 2,5 2, 1 houses 1,5 1, Single family 1987 Multiple family Source: National Association of Homebuilders, 29.

13 US housing starts 2,5 2, 1 houses 1,5 1, -33% Single family Multiple family Source: National Association of Homebuilders, 29.

14 US housing starts & unsold new houses US New Single Family Homes: Starts & Inventories SF Housing Starts SF Unsold New Homes I SF Monthly Housing Starts (Bar) Months Supply (Line) Sour ce : USCB Source: US Census Bureau, via International Wood Markets Group, 29.

15 (Millions of Units) Housing starts: N. America vs. Europe Housing Starts: North America vs. Europe * Europe North America Sources: Canadian MNC, Source: N. American Homebuilders CMHC / Assn., Euroconstruct, NAHB / via International Wood Euroconstruct Markets Group, 29.

16 1,4, Japan s housing starts 1,2, 1,, 8, 6, 4, 2, Non-wooden Post & beam Prefabricated 2 x 4 Source: Ministry of Land, Infrastructure and Transportation via Japan Wood Products Information and Research Center, 29

17 Russian wood and paper exports Million m Roundwood exports falling with taxes, forest sector reorganization Roundwood Sawnwood Market pulp Paper and paperboard Source: UNECE/FAO TIMBER database, 28.

18 Import Value of Wood and Paper Products 25 Where are importers? Billion $ China imports roundwood and waste paper Europe includes intraregional trade CIS North America Europe Asia Africa Latin America Oceania Source: FAOStat, 28.

19 Trade Value Development by Major Region Asia Europe North America CIS Latin America 1996 Exports Imports Source: FAOStat, 28. Billion $

20 China s Wood and Paper Products Exports Billion $ Skyrocketing trend slowed in 28 in volume, but increased 6% in value due in part to RMB appreciation Note: Includes sawnwood, panels, paper. Source: International WOOD MARKETS Group, based on Chinese Customs, 28.

21 China s Wood and Non-Wood Furniture Exports 3 25 $ billion * Total furniture Wooden furniture * 28 estimated Source: IBISWorld, 28, and Tan, X. et al., 27.

22 China s Forest Products Consumption 7 6 Million m3 or m.t Paper and paperboard Sawnwood Wood-based panels Sources: FAOSTAT, 28 and Tan, X. et al., 27.

23 S. American forest products exports, 26, $ million Peru Columbia Uruguay $237 Argentina $552 $187 $252 $147 Other $3,157 Chile Brazil Brazil $5,653 Source: FAO, 28.

24 III. Trade flow trends

25 Industrial Roundwood Trade Flows Million m Europe to Europe CIS to Asia +3% Asia to Asia CIS to Europe Oceania to Asia Latin America to Europe Source: UN Comtrade, FAO, 28.

26 4 Industrial Roundwood Trade Flows 35 Index (1996=1) Europe to Europe CIS to Europe CIS to Asia Oceania to Asia Asia to Asia Latin America to Europe Source: UN Comtrade, FAO, 28.

27 Global industrial roundwood vs. fuelwood Over half used as fuel Domestic heating Cooking Mostly in developing countries Low value Modern wood energy Small international trade Growing market Policy push in Europe

28 IV. Flooring market trends

29 Factors affecting demand and trade Economic conditions, mortgage (home loan) rates Housing starts Remodelling Demand for wood flooring vs. other flooring options

30 China's engineered flooring exports, value 7 6 $ million * US Japan Taiwan PoC Korea Rep Hong Kong Israel Spain UK Canada Other * Note: 28 data is January to November, only 11 months. Source: Chinese Customs, 29.

31 China's engineered flooring exports, volume 1,4 1,2 1, 1 m * US Japan Taiwan PoC Korea Rep. Hong Kong Israel Spain UK Canada Other * Note: 28 data is January to November, only 11 months. Source: Chinese Customs, 29.

32 China s laminated flooring exports, value $ million Could shipments to Canadian ports be destined for US? * US Korea Rep. Russia Canada Turkey Ukraine India Thailand S. Africa Other * Note: 28 data is January to November, only 11 months. Source: Chinese Customs, 29.

33 China s laminated flooring exports, volume 1,2 1, 1 m * US Korea Rep. Russia Canada Turkey Ukraine India Thailand S. Africa Other Converted from ton to m 3 by 75kg/m 3. * Note: 28 data is January to November, only 11 months. Source: Chinese Customs, 29.

34 China s solid wood flooring exports, value $ million Could shipments to Canadian ports be destined for US? Other Hong Kong Korea Rep. Japan UK Canada 1 US * * Note: 28 data is January to November, only 11 months. Source: Chinese Customs, 29.

35 China s solid wood flooring exports, volume 1 tons * US Canada UK Japan Korea Rep. Hong Kong Other * Note: 28 data is January to November, only 11 months. Source: Chinese Customs, 29.

36 China s wood flooring production Million m Laminated Engineered Solid Bamboo Source: State Forestry Administration, China, 29.

37 Exporters of wood flooring and shaped wood 2 $ million Africa Asia Europe South and Central America Note: Includes much more than flooring. China & Hong Kong CIS North America Other Source: UN Comtrade, 29.

38 Importers of wood flooring and shaped wood $ million Africa Asia Europe South and Central America Note: Includes much more than flooring. China & Hong Kong CIS North America Other Source: UN Comtrade, 29.

39 European parquet production and consumption m 2 Source: FEP, 29.

40 European parquet consumption per capita Source: FEP, 29.

41 European parquet production, 27 Total parquet production per type Percentages for 27 Lamparquet 2% Solid 19% Mosaic 3% Multilayer 76% Source: FEP, 29.

42 European species used, 27 Source: FEP, 29.

43 European construction sectors growth rates, 27-2% -1% % 1% 2% 3% 4% 5% 6% overall construction industry new renovation re sidential non-residential civil eng ineering ne w residential residential renovation new non-residential non-residential renovation ne w civil e nginee ring civil engine ering renovation Source: Euroconstruct, reported by FEP, 29.

non-residential renovatio n 13,% new nonresident ial 18,7%

44 European construction market shares, 27 new civil engineering 13,8% civil engineering renovation 7,2% new residential 24,5% non-residential renovatio n 13,% new nonresident ial 18,7% residential renovation 22,8% Source: Euroconstruct, reported by FEP, 29.

45 US hardwood flooring exports to Canada 8 and US exports Mexico, to Canada and value Mexico 75 $ million Some shipments to Canada may be re-shipped out of North America Source: USDA FAS, 29.

46 US hardwood flooring exports to non- 3 North America, value $ million Oceania SE Asia S. Asia Sub-Saharan Africa N. Africa Middle East E. Asia CIS Other Europe EU-27 S. America C. America Caribbean Source: USDA FAS, 29.

47 US softwood flooring exports, value 35 3 Note softwood flooring 1 times less than hardwood Oceania SE Asia S. Asia 25 Sub-Saharan Africa N. Africa $ Note softwood flooring exports to N. America may include re-export Middle East E. Asia CIS Other Europe EU-27 5 S. America C. America Caribbean N. America Source: USDA FAS, 29.

48 US hardwood flooring imports, value $ million Oceania SE Asia S. Asia Sub-Saharan Africa N. Af rica Middle East E. Asia CIS Other Europe EU-27 S. America C. America Caribbean Source: USDA FAS, 29.

49 US softwood flooring imports, value $ million Oceania SE Asia S. Asia Sub-Saharan Africa Middle East E. Asia CIS Other Europe EU-27 S. America C. America N. America Source: USDA FAS, 29.

50 US hardwood flooring exports to Canada and Mexico, volume m Source: USDA FAS, 29.

51 US hardwood flooring exports to non- 1 m North America, volume Oceania SE Asia S. Asia Sub-Saharan Africa N. Af rica Middle East E. Asia CIS Other Europe EU-27 S. America C. America Caribbean Source: USDA FAS, 29.

52 US softwood flooring exports, volume 1 m Oceania SE Asia S. Asia Sub-Saharan Africa N. Af rica Middle East E. Asia CIS Other Europe EU-27 S. America C. America Caribbean N. America Source: USDA FAS, 29.

53 US hardwood flooring imports from 25 Canada and Mexico, volume 2 1 m Source: USDA FAS, 29.

54 US hardwood flooring imports from non- North American countries, volume 1 m Oceania SE Asia S. Asia Sub-Saharan Africa N. Africa Middle East E. Asia CIS Other Europe EU-27 S. America C. America Source: USDA FAS, 29.

55 US softwood flooring imports, volume 1 m Oceania SE Asia S. Asia Sub-Saharan Africa Middle East E. Asia CIS Other Europe EU-27 S. America C. America N. America Source: USDA FAS, 29.

56 Russian flooring market Parquet demand forecast to increase 84% by 21 From 5.7 million m 2 in 27 To 1.5 million m 2 in 21 Market shares in 27 Tarkett (Germany) 17% Grabo7% Woodpecker 7% Source: Delovoi Petersburg, September 28, as reported by Maskayu, of the Malaysian Timber Industry Board, September 28.

57 IV. Market drivers Socio-economic factors Currency rate variations Green building programs Public procurement Social responsibility Environmental consciousness Climate change Deforestation and afforestation Alternative demands on forests

58 V. Future prospects Increased environmental consideration Wood-based energy Promotion of wood and paper products as sustainable, recyclable materials Continued long-term growth of forest products markets

59 V. Future prospects (continued) CE marking for European Union flooring March 21 Certifies that product has met EU consumer safety, health and environmental requirements Attention producers in EU and exporters to the EU!

60 V. Future prospects (continued) Laws, duties, tariffs, taxes, regulations Raw material costs Labour costs & benefits Manufacturing costs Goal: Raise standard of living and domestic consumption of wood products

61 Greater harvests V. Future prospects Economic and trade recovery Alternative demands on forestlands Competition based on marketable attributes other than price, for example corporate responsibility for Social aspects Environmental aspects, including certification of sustainable supply sources More research and development

62 VI. Discussion & questions

63 Ed Pepke Forest Products Marketing Specialist UNECE/FAO Timber Section 448 Palais des Nations CH-1211 Geneva 1, Switzerland Tel Fax

Global forest products market trends

Global forest products market trends by Dr. Ed Pepke Senior Timber Trade Analyst FLEGT Facility European Forest Institute Contents I. Introduction II. Global market drivers III. Global trade trends IV.