Global forest products market trends

Transcription

1 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. Conclusions 1

2 Main sources of information Forest Products Annual Market Review, UNECE/FAO Importance of China s Forest Products Markets on the UNECE Region, UNECE/FAO UNECE/FAO Timber Database, UNECE/FAO FAO Statistics database UN Comtrade database I. Introduction 2

3 World shaped by political boundaries Source: Worldmapper, 29 World shaped by population Source: Worldmapper, 29 3

4 As shaped by forest products production Sources: Worldmapper & FAOStat, 29 Shaped by wood and paper consumption Sources: Worldmapper & FAOStat, 29 4

5 As shaped by forest products exports Sources: Worldmapper & FAOStat, 29 As shaped by forest products imports Sources: Worldmapper & FAOStat, 29 5

6 UNECE/FAO Forest Products Annual Market Review Structural change in forest sector 4 underlying reasons 1. Downturn in demand forcing rationalization of production capacity 2. Climate change policies: escalation of wood energy production, consumption and trade 3. Globalization of forest products markets, e.g. China s rise as a major provider of forest products in the global markets 4. International control of origins of wood to ensure sustainable and legal production. 6

7 II. Global market drivers Global market drivers a. Recovery from global economic, financial crisis b. Increasing consumption of wood products, including China c. Green building wooden construction, interiors d. Certification and public procurement policies e. Fight against illegal logging & trade FLEGT, EU Timber Regulation, US Lacey Act Amendment f. EU renewable (wood) energy policies g. Japan s reconstruction from March 211 earthquake and tsunami 7

8 a. Economic and construction developments Recovering from the most severe financial shock since the Great Depression Deepest economic downturn since World War II Debt crisis continues in the Euro-zone Sluggish recovery despite massive intervention High unemployment restrains recovery 2.4 Housing Starts: North America vs. Europe (Millions of Units s) *11** Europe North America Source: CMHC / NAHB / Euroconstruct 21/11 - Forecast Source: WOOD MARKETS Monthly Newsletter, 21 8

9 1 house es United States housing starts, ,6 1,4 1,2 1, Single Family Multifamily Source: National Association of Home Builders, 211. Peak 1,6 2.2 million new houses per year in 25 1 house es United States housing starts, But 21: 58, new houses; 211 6, 1,4 forecast 1,2 Huge 1, inventory unsold new and used homes + Shadow 8 homes (owned by banks, not on market) House 6 prices down at 23 levels Problems 4 grew 2 Sub-prime mortgages with little down payment Mortgage value greater than house value Economic downturn foreclosures Single Family Multifamily Source of problem / source of recovery 9

10 b. Globalization and increasing consumption International trade doubled in last 1 years (more later) China s domestic consumption doubled over last 1 years for sawnwood, panels, paper and paperboard Developing countries consumption increasing with improved standards of living, in part due to international trade Chinese consumption of wood & paper products %/year forecast to 215, without roundwood Million m 3 or tons 8 Panels Sawnwood Paper & paperboard Roundwood 75-8% production is consumed domestically. Link with GDP Note: Forecast by Wood Markets International, 21. Sources: FAOStat, UNECE/FAO estimates, 21. 1

11 c. Green building Energy efficient Considering construction materials environmental impacts Wood frame construction for residences, businesses Wood used in interior applications d. Certification and public procurement policies 11

12 Certified forest area 4 35 Million hectares May 29 May 21 PEFC FSC CSA SFI ATFS MTCS Source: UNECE/FAO, , Chain of custody certificates ificates Number of CoC cert 2, 15, 1, 5, May 29 May 21 FSC PEFC Source: UNECE/FAO,

13 Certification drivers Procurement polices by governments, organizations, corporations Business-to-business (not by consumer demand) Minority of companies that have chain of custody Considerable potential for development EU FLEGT and Timber Regulation USA Lacey Act Amendment Corporate responsibility programs (trade associations and companies) e. Fight against illegal logging & trade EU FLEGT Action Plan EU Timber Regulation US Lacey Act Amendment 13

14 f. Wood energy The only market sector that grew during the economic crisis Photo source: Metsaliitto. Wood energy drivers European Union renewable energy targets: 2% renewables by 22 Rising fossil fuel costs Energy security independence from imports Environmental concerns with fossil fuels Countries phasing out nuclear energy Forest sector development by governments and industry Industry-driven diversification 14

15 European wood pellet production capacity m.t. 1, Germany Sweden Austria Portugal France Poland Latvia Finland Others Source: Ljungblom, 21. Major European pellet importing countries and their suppliers, 29 m.t. 1, Netherlan Denmark Sweden Belgium Italy ands k Source: Eurostat, 21. US Canada Germany Russia Sweden Estonia Finland Latvia Austria Other 15

16 Modern wood energy Production is efficient, economical and environmentally sound Beneficial for some parts of the forest sector Presents competition for low-grade, small- diameter timber with other parts of the sector Generated global trade of low unit-value wood. Photo source: M. Fonseca. g. Japan s recovery from earthquake and tsunami Temporary wood shelters Earthquake-resistent wooden houses and buildings Concrete forming (panels and sawnwood) 16

17 III. Global trade trends 7 Global trade of all forest products 6 Doubled in 6 years -17% $ Billion Roundwood Sawn-Softwood Sawn-Hardwood Panels Pulp Paper Value-Added Source: UN Comtrade,

18 Global value-added imports 25 2 Doubled in 1 years -16% $ Billion Asia CIS Europe North America Oceania S & C America Africa Source: UN Comtrade, 211. Value-added forest products exports Doubled in 1 years Source: FAO Statistics. Source: UN Comtrade,

19 7 6 Chinese forest products exports Doubled in 4 years 5 $ Billion Primary Value-Added Note: 21 value-added estimated. Source: UN Comtrade, 211. Chinese consumption of wood & paper products 12 1 Million m 3 or tons 8 Panels Sawnwood 6 Paper & paperboard 4 Roundwood Note: Forecast by Wood Markets International, 21. Sources: FAOStat, UNECE/FAO estimates,

20 IV. Conclusions Conclusions (1 of 2) Structural change in forest sector requires innovation in products, processing and marketing Global trade Doubled in years preceding economic crisis Now rebounding Recovery dependent on US housing market, remains weak China suffered less than other countries, in part from increasing domestic consumption 2

21 Conclusions (2 of 2) Forest sector negatively effected by illegal logging and trade FLEGT, EU Timber Regulation, US Lacey Act Amendment to ensure legality, sustainability Other market drivers Certified wood and paper products Public procurement policies Green building Wood energy Japanese recovery Thank you! Dr. Ed Pepke Senior Timber Trade Analyst EU FLEGT Facility European Forest Institute 21