|
Report
from
Europe
Slow European demand for plywood balanced by
reduced supply
European demand for hardwood plywood is very slow.
The UK market is slightly more buoyant than elsewhere
on the continent. Importers report that slow European
consumption is matched by reduced availability in China
due to labour and log supply shortages.
Apparent supply shortages are partly the result of
European buyers becoming more selective in their choice
of plywood suppliers since enforcement of the EU Timber
Regulation (EUTR) after March 2013.
FOB prices for Chinese hardwood plywood products on
offer to European buyers have remained stable in recent
months. Although exporters are keen to raise prices to
cover rising costs, importers have been strongly resisting
this tendency due to the low level of European
consumption.
Some European importers are already reducing prices
below replacement cost in an effort to offload their
existing landed stocks.
In addition to weak consumption, a recent sharp increase
in freight rates is discouraging importers to place new
orders for Chinese plywood.
Rates on the Asia to Europe route were falling during the
first six months of the year, declining to around $1000 per
40 foot container in June 2013.
However rates have rebounded dramatically since then, to
over $2500 per 40 foot container by mid-August. This has
added around $35/m3 to the cost of shipping plywood
from China into the EU.
The EUWID trade journal reports that German buyers are
increasingly switching their standard grade of Chinese
poplar plywood from 21mm to 20mm.
In an increasingly cost conscious and highly competitive
market, the 5% price advantage offered by the 20mm
product has been sufficient to encourage the switch.
EUTR and CPR driving changes in EU plywood market
EUTR continues to drive changes in the market for
Chinese plywood products. European buyers are focusing
on a smaller number of exporters considered better able to
provide the legality assurances required.
European companies are preferring suppliers with which
they have long term relationships to help ensure products
are supplied with appropriate technical and environmental
documentation.
This trend is driven as much by the new demands of the
Construction Products Regulation (CPR) as by the EUTR.
Since 1 July, CPR has imposed mandatory requirements
for CE marking of all plywood for structural use in the
EU.
One important implication of both the EUTR and CPR is
that importers now need very precise information on the
species content of veneers used to manufacture plywood.
Strong emphasis is placed on species considered to be low
risk of illegal harvest to replace those considered higher
risk. Information on species content is also obviously
necessary for determining product strength and durability
for CE marking purposes.
African sapele is increasingly preferred over bintangor
from Papua New Guinea for face veneers. There is some
FSC availability of sapele and greater European
confidence in legality documentation from Cameroon
which is engaged in the FLEGT VPA process.
On the other hand sapele veneer is a relatively expensive
option. Increased demand has already driven a significant
rise in prices for sapele logs, particularly those that are
FSC-certified.
As a result other African species, lesser used in the past,
are also being tried, such as lotofa (Sterculia rhinopetala)
from Cameroon.
There is also rising European interest in plywood faced
with dyed poplar reconstituted ¡°fineline¡± wood veneer.
China¡¯s share of EU plywood market dips in 2013
The latest trade data shows that there was a sharp fall in
EU imports of hardwood plywood in March 2013 (see
figure below). This was almost entirely due to a dip in
imports from China. Imports from China rebounded a little
in April, but then weakened again in May.
In the first five months of 2013, EU imports of all
hardwood plywood from China were 367,000 m3, down
15% from 434,000 m3 in the same period in 2012. China‟s
share of total EU hardwood plywood imports fell from
45% in the first five months of 2012 to 42% in the same
period of 2013.
It‟s still too early to say whether the decline in China‟s
share represents a significant structural shift in the EU
plywood market, or a short term response to Europe‟s
weak consumption.
China expected to maintain leadership position in the
EU market
Looking ahead, there are reasons to believe that China‟s
large and globally dominant plywood sector will maintain
a leadership position in the European market. Chinese
manufacturers remain highly price competitive and some
manufacturers are already adjusting well to the new
market requirements.
In addition to switching species, some Chinese plywood
manufacturers supplying the European market have been
taking steps to cut out middlemen in China and importing
their own logs or veneers with the necessary
documentation.
On the other hand, European importers also report that
those Chinese mills capable of supplying to the EUTR
standard are already oversold leading to delayed
shipments.
European importers are also being much more selective in
the plywood products they procure from China, with many
now buying only plywood manufactured from plantation
grown poplar and eucalyptus, which are considered low
risk.
For specialist grades of marine and other high quality
tropical hardwood plywood, EUTR is expected to
encourage greater efforts by European importers to shorten
their own supply chains by buying direct from tropical
countries.
Still no rise in demand for direct imports of tropical
plywood
However, with consumption in Europe still low, there is
yet to be any significant rise in direct imports from
tropical countries. European demand for South East Asian
plywood remains restricted.
Despite the recent sharp rises in freight rates, prices for
South East Asian plywood on offer to European buyers
have risen only slightly. 18mm BB/CC plywood from
Indonesia is currently selling for between INDO96+38 and
+40. Prices for the same grade from Malaysia are between
INDO96+25 and +30.
Supply of South East Asian plywood is reported to be
sufficient compared to current levels of demand and new
orders may be shipped promptly within no more than
about four weeks.
European demand for African okoume plywood also
remains very slow due to weak construction activity in the
main French and Dutch markets. There was some
increased purchasing by importers and distributors in the
first quarter of2013 in preparation for the summer
construction season and in anticipation of rising prices.
However, poor weather delayed the start of construction
season and consumption remained low even as the weather
improved over the summer. Supplies from French
manufacturers are readily available and can be dispatched
promptly. Deliveries from Africa are less certain, taking 2
to 3 months with frequent delays.
The downturn in the European okoume plywood market is
clear from the recent financial statements of French-owned
Rougier which operates large concessions and plywood
mills in Gabon.
In their financial report for the first quarter of 2013,
Rougier note that their plywood sales in Europe were
down 15% compared to the same period in 2012. Within a
cautious market context, the quarter was marked by delays
withindustrial production in Gabon and the high level of
competition on temperate timber plywood in Europe.
Birch plywood diverted away from the EU market
European and Russian birch plywood manufacturers are
reporting good sales and have been forcing through price
rises.
Finnish birch plywood is selling quite well in Germany
and the UK. However consumption in other parts of
Europe has been disappointing and weaker than last year.
Demand for Russian and European birch plywood is now
coming from markets outside Europe, notably in Russia
itself and in the US, the Middle East, and North East Asia.
Russian manufacturers are increasingly focusing on these
markets, with the result that European buyers often
struggle to obtain product from Russia at consistent prices
for prompt shipment.
Lead times for Russian filmed birch plywood is typically
over four weeks and may be longer for other grades.
Finnish birch plywood manufacturers are also making less
product available to the European market and selling
almost exclusively to regular customers under long-term
contracts.
EU imports of softwood plywood remain stable in 2013
The latest EU import data suggests that the softwood
plywood trade is being less affected by the recent
construction downturn and EUTR than the hardwood
trade.(chart 2).
Total EU imports of softwood plywood in the first 5
months of 2013 were 655,100 m3, down only 0.5%
compared to the same period in 2012.
A rise in imports from Brazil offset falling imports from
Chile and Russia. Imports from China remained stable at
around 65,000 m3 in the first 5 months of the year.
Substitution of hardwood plywood products
Substitutes are making more inroads into applications
previously dominated by hardwood plywood in the
European market.
For example, Medite based in Ireland has been producing
Medite Tricoya ¡°Extreme Durable MDF¡± since the end of
2011 in a joint venture with the British company Accsys
Technologies. Tricoya is now selling into several
European countries including Germany, Ireland, the
Netherlands and the UK.
According to Medite, sales in all markets in which Tricoya
has been launched ¡°has met or surpassed expectations,
with customers willing to pay a significant premium over
conventional MDF material due to the greatly enhanced
properties of Medite Tricoya¡±.
At present Tricoya production is limited and dependent on
acetylated material supplied by Accsys. However Medite
is planning to greatly expand their own acetylation
capacity in 2016 with the introduction of a new continuous
production process developed by Accsys.
The plant will have an initial annual capacity of
approximately 42,000m3 of Tricoya MDF panels.
¡¡
| 
