Overview of Global Hardwood Market Rupert Oliver, Forest Industries Intelligence
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE Includes all logs, sawn, mouldings/ decking, veneer, and plywood 2
Hardwood supply-side trends Region Asia/ Oceania Africa S/C America N. America Europe/ Russia Endangered Rosewood Merbau Ramin Burmese teak Rosewood Afrormosia American mahogany Spanish cedar. Mongolian oak Mongolian ash Commercially limited Meranti, Keruing, Balau, Rubberwood Plantation teak Iroko, Khaya, Wawa, Ayous, Framire,Sapele, Sipo, Wenge Lesser known Amazonian species such as marupa, garapa, masaranduba, tatajuba Red alder Walnut European oak Growth potential Plantation poplar, plantation acacia Koto, okoume lumber Plantation teak Plantation Eucalyptus Plantation eucalyptus Birch, Maple, Oak, Tulipwood, Cherry, Cottonwood, Basswood, Willow, Hickory, Sap gum Birch, beech
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 5
Hardwood log trade 6
Source: FII analysis of FAOStat 7
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 8
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 9
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 10
Sawn hardwood trade 11
Source: FII analysis of FAOStat 12
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 13
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 14
Source: Analysis of Hardwood Market Report (HMR) 15
Source: Analysis of USDA GATS & Hardwood Market Report (HMR) 16
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Source: Analysis of USDA GATS 19
Source: Analysis of USDA GATS. Data shown is proportion of volume in m3 20
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Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 23
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE. *exports estimated from imports by major consuming countries 24
Source: FII analysis of Global Trade Atlas (GTA) & UN COMTRADE 25
European hardwood market Total production (10.9m m3) & consumption (8.6m m3) unchanged in 2017 Domestic market consumes 80% of production Weak construction sector growth Focus on European oak has led to supply shortages & high prices Strong demand for barrel staves Chinese operators buying logs Croatia 2 year ban exports of oak logs and green lumber ostensibly to control oak lace bug Number of operational hardwood mills declined 30% in last decade
Source: FII analysis of Eurostat COMEXT 27
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Thermally modified hardwood for decking & cladding 100+ operations worldwide volume still limited (<300,000m3) Ash most popular, others tulipwood, soft maple, red oak & birch Durability class 1 (very durable) like Ipe Enhanced machining & reduction in thermal conductivity Whole cross section modified allows machining after treatment 32
Hardwood market stasis No increase in value of global hardwood trade in last 15 years despite emerging market growth and natural advantages of hardwood Long term structural obstacles: Focus on limited range of species: oak, teak & rosewood Preference for logs in emerging markets (just beginning to change) Fragmentation at all levels: forests, trade & end-users Lack of investment in active forest management & efficient processing Inability to attract best personnel compared to other sectors Regulatory capture by special interests Existing certification frameworks add costs while market access and environmental benefits are debateable Substitute materials increasingly competitive on technical performance and neutralising the sustainability advantage 33
Hardwood opportunities Large & expanding demand in emerging markets (but must improve financial return) Economic growth in western markets (albeit slow and yet to translate into improved hardwood demand) Designers/engineers revived interest in real wood recognition for technical performance alongside sustainability Specific opportunities for greater use in structural applications and for wood modification to extend applications UNFCCC Paris Agreement: enhanced investment in hardwood forestry & market recognition of carbon content of harvested wood products? Sharper policy focus on illegal logging, due diligence, LCA and circular economy principles Modern technology to reduce costs of sustainability verification Increasing transparency and quality of industry data 34
Thank you! Rupert Oliver rupert@forestindustries.info 35