WoodWeek – 20 January 2010
See more articles on wood market prices which are firm, with volumes exported from NZ slightly lower in November - this is a good trend that the volumes appear to have backed off to match market demand - borne out by the indications that prices are still holding, if not continuing to increase. In the past we have seen volumes continue to skyrocket while prices took a dive, so this is a nice change. Of course China is still the big consumer of both imported logs and lumber and readers will see what the Russians have decided about their export log tariffs - read on and enjoy the good news! FICA SILVICULTURE MEMBERS - please note you must call the FICA office to register for the 4th February dinner meeting - it's FREE! Finally, we have been inundated with ACC/FICA competition entries from many of the PF Olsen and Rayonier Safe-Start-Up Breakfast events in early January - watch this space - the winner of the chainsaw and safety accessories will be announced RIGHT HERE next week! Subscribe a friend
This week we have for you:
Contractors' Key Indicators
After a four cent per litre jump in the price of diesel at Kiwi pumps last week, Shell yesterday led a price decrease with a three cent drop in diesel prices. The Automobile Association criticised last weeks price rise saying oil companies were unjustified in the hikes due to a strong Kiwi dollar and a drop in international oil prices. The AA stated tha in such conditions the price of petrol and diesel should have corrected itself.
*Note:The LCI has been re-expressed on a June 2009 quarter base (=1000).
World Class Plywood Mill Proposed for Myrtleford
Carter Holt Harvey (CHH) Woodproducts Australia has announced a significant plywood mill upgrade at their Myrtleford (VIC) integrated plant, to create a world class plywood mill utilising state of the art manufacturing equipment. This major investment demonstrates Carter Holt Harvey’s commitment to the future of the Australian wood products industry and the employment that it supports in regional Australia. The Myrtleford facility commenced sawmilling and pulping operations in 1975 as Australian Forest Industries. Plywood manufacture began at the site in 1981. CHH purchased the facility in 1995. Under CHH ownership the site has operated as a sawmill, plymill, treatment plant and pulpmill. The pulpmill was decommissioned in 1999.
Industry Experts Add Impact to Industry Finance Conference
Recent speaker confirmations for the New Zealand event will boost interest the conference programme. Jacob Kajavala, director of Kajavala Forestry, and Pat Coley, Financial Services Manager for Cable Price, have been jointly confirmed to speak on the issues of the bankability of contracts for forest contractors. Forest contractors regularly invest millions of dollars in major and specialised capital plant for logging and transport and there is a growing need for better and longer-term contracts to ensure stability in investments in this part of the forestry sector. George Asher of Lake Taupo Forest Trust and Bill Liley of Poyry have also been confirmed to speak on Maori aspects going into the future for the forestry sector. Both speakers have considerable experience with Maori stakeholders in the forest industry. The conference in Auckland will held on 4-5th March 2010 will focus on strengthening ties between the finance and forest products industries in New Zealand. Many of the countries that are key wood export markets are now rebounding from recession. Forestry is now poised to capitalise on potential new rules for the next Kyoto Protocol commitment period which could make for huge change and growth. “Forest products opportunities are set to grow massively in bio-energy and carbon credit markets– and finance company risk managers would benefit from a local and international market update.” says conference organiser John Stulen of the Forest Industry Engineering Association (FIEA). Key note speakers include: Eva Greger of GMO Renewable Resources, Boston, USA – speaking on international forestry investment comparisons to Australia. Russell Taylor of International Wood Markets Group, Vancouver, Canada – speaking on international wood markets and future competition from Russia and China. Bob Flynn, RISI – speaking on international biomass and woodchip markets and future competition from South American forest industries. RISI is the leading information provider for the global forest products industry. Registration details and further information on the Auckland or Sydney programme is available from the event website www.forestryfinanceevents.com EARLY BIRD DEADLINE HAS BEEN EXTENDED UNTIL THIS FRIDAY, 22nd JANUARY.
FICA Members Meetings and Workshops in February/March
BUSH-BASED WORKSHOP “Practical Cable Logging – ‘Tricks of the Trade’ ” – We plan to run our first bush-based regional one-day workshop in mid-February or mid-March (depending on registration numbers) in Whangamata.
Ocean Freight Index
The BSI (Baltic Supramax Index), published by the Baltic Exchange, is the weighted average on 5 major time-charter routes. It is based on a 52,454 mt bulk carrier carrying commodities such as timber. (Source: Cotzias Shipping)
Forestry Product Prices Rise Alongside Aluminium and Dairy
An upbeat tone to start 2010 for commodity producers from the end of last year. The ANZ Commodity Price Index ended last year with a 2.6 percent increase in December. The cumulative rise over the calendar year was 30 percent, with the largest annual increases in commodity prices recorded in dairy, aluminium and sawn timber (up 50, 47 and 40 percent, respectively). The overall index remains at lofty levels, and is only 6 percent away from its record high, recorded in July 2008.
(Source: ANZ Commodity Index)
Global Softwood Lumber Markets Mixed in 3Q/09
Softwood lumber imports to China have increased by 81% in 2009. It is not inconceivable that China will import more lumber than Japan in 2009, a historical first. Canadian sawmills have been the major beneficiaries of this new fast-growing market, reports the Wood Resource Quarterly.
Te Hiku Forum Iwi Sign Agreement in Principle
The Crown and Te Hiku Forum, a group of five Far North iwi, signed an Agreement in Principle last week towards settling historical Treaty of Waitangi claims in the area. The Agreement provides for commercial redress of $120 million between the five iwi. It includes the transfer of Aupouri Crown forest along with accumulated rentals, and the transfer of seven farms in the region from Landcorp and Crown agencies. Te Hiku Forum chairman Haami Piripi said iwi were looking forward to managing iwi-owned forestry and farming, as well as investing in fishing, tourism, education and training.
Russian Government Postpones Log Export Duties Again
Decree number 1071 of the Russian government was signed by Prime Minister Vladimir Putin on 23 December, postpones the increase of round wood export duties once again by one year until 2011. The Decree is valid from the January 1, 2010, as reported by the Nordic Paper Journal. The export duty for wood will remain at the previous level, which means an export duty for softwood in 2010 of 25%, but not less than Euro 15 per cubic metre. From the beginning of 2011 the duty for softwood will be 80%, but not less than Euro 50 per cubic metre.
USA Papermakers like the Taste of Government Subsidies
Various paper companies are also getting government help to reduce reliance on fossil fuels, using state grants funded by federal economic-stimulus programs. Just this week, Maine awarded $2 million to Verso Paper's Bucksport mill and smaller amounts to five other paper companies for investments in such projects as heat recovery and biomass boilers. Last month, Wisconsin made similar energy-efficiency grants totalling about $5 million to four paper companies. Say hello to Uncle Same – US paper companies have historically avoided government entanglement. But after some left millions of dollars on the table last year by being late to the black-liquor party, they are definitely keeping an eye on Uncle Sam's wallet now. BCAP is nowhere near as generous as the black-liquor credits, and the benefits to paper mills and other buyers of biomass will be indirect and uncertain. Boosted by a $517 million appropriation for the first quarter of 2010, the program provides subsidies to suppliers rather than users of biomass. By being BCAP-approved sites, biomass users - such as paper mills that burn bark, limbs and sawdust to fire their boilers - will presumably be able to buy at less-than-market prices. As with the black-liquor credits, critics are already complaining that BCAP will distort markets in a way that unfairly hurts some businesses without doing much for the environment. (This article originally appeared at Dead Tree Edition (http://deadtreeedition.blogspot.com), written by a someone with the pseudonym D. Eadward Tree. The above comments are the opinion of the author and do not necessarily reflect that of the WoodWeek Editor or Innovatek Ltd.)
Border Taxes: Should New Zealand be Worried?
This Insight looks at whether New Zealand is in danger of having border taxes imposed on its exports if it is perceived as having a weak stance on climate change. It concludes that although New Zealand may not be explicitly targeted by border taxes in the short term, there remain some longer term risks to our exporters from the increased global focus on the environmental impacts of trade.
...and finally...the new recruit...
The Marine Drill Sergeant noticed a new recruit and barked at him, 'Get yourself over here ! What's your name?"
Buy and Sell
...and finally, finally..the out of office auto-reply...
"I am currently out of the office at a job interview and will reply to you if I fail to get the position. Please be prepared for my mood." And on that note, enjoy the rest of your week. Cheers. We welcome comments and contributions on WoodWeek. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.
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