WoodWeek 5 April 2017
This week we have some comments on China’s wood markets from prominent market analyst Russ Taylor of International Wood Markets Group in Vancouver. He made the observations on a recent market visit. In China there have been moves by some government companies to purchase private firms to control log and lumber supply from source countries.
With the market running strong, there is continued interest within China in sourcing alternative, lower-cost logs and lumber (as opposed to more traditional supplies from Russia, the North American west coast and New Zealand). Alternatives being pursued include: squared logs from Siberia, Ukraine and Belarus; eucalyptus and taeda pine logs and lumber from Brazil and Uruguay; southern yellow pine lumber from USA; and sugi logs from Japan (expected to double or even triple in five years).
In British Columbia, forest contractors have banded together and made a successful case for bringing fairness to the business of forestry in the province. The Truck Loggers Association (TLA) represents over 480 forest contractors. The provincial government has just announced that a respected and experienced consultant will be appointed as an independent facilitator for a contractor sustainability review.
This week we have for you:
Champion Freight Log Export Report - AprilThanks to the great team at Champion Freight we've got the latest log export market activity update for you in a series of very clear and self-explanatory charts.
Click here to download the Champion Freight reports.
Source: Champion Freight
China Market UPDATEA key development of the last month or so has been a rapid, unexpected rise in container rates from the Baltic Sea area (affecting a wide range of exporting countries, e.g., Finland, Sweden, northwestern Russia, the Baltic States, Germany and some in Eastern Europe). Container rates from Finland and Sweden have essentially doubled from less than US$1,000 to ~US$2,000. It is even worse from St. Petersburg: it appears that container rates may have tripled in the last six months (from US$20/m3 to almost $60/m3).
These increases are tied to a number of factors, including a lack of containers flowing from China to the Baltic Sea area prior to the Chinese New Year, as well as reduced shipping capacity following the Hanjin Shipping Line bankruptcy. Most believe this is a temporary imbalance that could be resolved by June, but it is still likely that container rates are on their way up from the record lows of the last few years.
Other regions, including the North American west coast and most of the Pacific Rim, are less affected so far (although small increases have occurred). Thus, the freight advantage remains on the Pacific side to China, as well in the US South and South America.
There also appears to be some consolidation going on in the Chinese supply chain. Some government companies are buying private firms to control log and lumber supply from source countries. In many cases these purchases include processing assets in China, allowing for a supply chain of logs flowing directly to domestic Chinese sawmills.
There is continued interest within China in sourcing alternative, lower-cost logs and lumber (as opposed to more traditional supplies from Russia, the North American west coast and New Zealand). These alternatives include the following:
• Squared logs or cants from Siberia, Ukraine and Belarus;
• Eucalyptus and taeda pine logs and lumber from Brazil and Uruguay;
• Southern yellow pine lumber from the U.S.; and
• Sugi logs from Japan (expected to double or even triple in five years).
Interest is quite high in the first southern yellow (taeda) pine breakbulk shipment to China from Uruguay, for which the delivered cost was well under the price for radiata pine logs. Pine from Brazil is also enjoying strong interest (although the recent strengthening of the Brazilian real may slow some growth). Squared logs or cants from both the Ukraine and Belarus continue to be new developments — a natural response to the log export bans that have taken place in these countries.
Following a torrid rise in housing prices in 2016 (especially in tier 1 cities), housing prices are likely to be cooler in 2017. The construction market — by far the largest end-use segment for logs and lumber — will show similar growth rates to 2016, e.g., 5%–6% (close to GDP). The furniture/decoration markets grew at about twice the rate of the construction market last year, and a similar trend is expected for 2017, propelling growth in higher grades of kiln-dried lumber for the furniture and decoration markets.
By Russ Taylor, President (following a one-week China market trip)
Source: International WOOD MARKETS Group Inc., www.woodmarkets.com
Contractor sustainabilty under reviewIn British Columbia forest contractors have been successful in making a major step towards bringing fairness to the business of forestry in that province. The Truck Loggers Association (TLA) represents almost all forest contractors there.
Following through on a commitment given by BC Premier Christy Clark at the TLA’s 74th Annual Convention & Trade Show, the provincial government has just announced that a respected consultant George Abbott will be the independent facilitator overseeing the Contractor Sustainability Review.
"We’re pleased to have an independent facilitator with so much experience working with industry and communities,” said David Elstone, TLA Executive Director. “The Contractor Sustainability Review is the most significant piece of work to affect timber harvesting contractors in almost 20 years and George Abbott is the kind of experienced person we need take on this challenge.”
Abbott has had a long and distinguished career in politics and public service, serving in many ministerial positions. During his term in the Ministry of Sustainable Resource Management, Abbott worked with industry, environmental, and First Nations groups to complete the Great Bear Rainforest agreement.
“George Abbott’s experience working with the forest industry through developing the Great Bear Rainforest agreement means he has the on-the-ground experience needed to facilitate the Contractor Sustainability Review,” said Jacqui Beban, TLA President.
Timber harvesting contractors are the economic backbone of BC’s rural communities. Working to achieve contractor sustainability will allow independent timber harvesting contractors to earn a fair rate of return so they can continue to provide steady, well-paying jobs in BC’s rural communities.
About the Truck Loggers Association (TLA) - It represents 480 independent forest contractors and their suppliers operating on the coast of British Columbia. Our membership supports thousands of workers and, along with other independent contractors, accounts for close to 90% of the trees harvested on the coast. The TLA promotes a thriving, sustainable coastal forest industry in BC.
Farms benefit from forests says practitionerForestry is in a good space with attractive prices for all log grades and could be a good earner for hard-pressed farmers, says a farm forester.
Bulls farmer and farm forester, Denis Hocking said forestry returns, net of harvest, of up to $40,000 and even $50,000 per hectare had been quoted, for 25-30 year old stands of radiata pine on poorer land.
He said many farmers had financially benefited from the harvesting of farm woodlots.
Feilding is the site of the national farm forestry conference next month and the theme of the challenge of diverse land forms will cover the roles of trees on land ranging from high value terrace country round Feilding to the coastal sand country and the highly erosion-prone west Pohangina hill country.
Source: Stuff News
Forestry's social license revokable at any timeSince the terrible experiences people in forestry endured during 2013 we have learned how fragile our social 'licence-to-operate' can be with a public that finds the issues hard to understand. The media often don't aid that effort either. For people with industry experience it is well known that attitudes to safety culture are changing much faster than those in farming. Despite this the media are quick to pounce on an opportunity to name and shame given half a chance.
FISC CEO Fiona Ewing came under media scrutiny this week following the release of accident rate statistics earlier this week. Below is the update and audio link to the interview on Newstalk ZB.
Part of the problem we face in these situations is that many reporters in the mainstream media want to make the story simple and find someone to blame - then peppering them with questions to underpin that more should be done, etc, etc. The reality, as people leading crews in forestry know, is that changing safety culture is challenging and safety improvements are not instant - the statistics change over longer periods of time than just a single year.
After declining in 2015, injuries began creeping up again last year.
More than 173 forestry workers were severely injured in 2016, and the rate of serious injuries per 10,000 workers rose nearly 11 percent over the year before.
Forestry Industry Safety Council national safety director Fiona Ewing told interviewer Rachel Smalley it could take time for the legislation to make an impact.
"It's not good as I say. It's not what we want. Our aim is to get towards zero. The new legislation is pushing us in the right direction which is good.
"The trend is not what we want it to be but overall the trend has improved since 2013."
Ms Ewing said there remains a compliance mentality within parts of the industry.
This is where health and safety is focused around ensuring companies have the paperwork needed to protect them from prosecution if someone gets hurt.
She said that has to change to a focus of caring for people and doing the job professionally.
Click here to listen to the interview
Source: Newstalk ZB
NZ Logger - Wheels of FortuneTwo Volvo wheel loaders star in the April issue of NZ Logger magazine, each representing a first in their respective roles in New Zealand. The Volvo L120H of S&R Logging, currently working in the Taharoa Forest, east of Taupo, is the first of this model to go to work in the bush, while larger Volvo L250H operated on contract by McCarthy Transport in the log yard of the Tangiwai saw mill was the first L250H to be used for log work anywhere in the world.
More than 400 people packed out the Distinction Hotel conference centre in Rotorua for the 2017 Safety Summit – a record total and a sure sign that the industry continues to take the subject very seriously. Some interesting new ideas were discussed, as reported in magazine conference coverage.
Plus much more, in the April 2017 issue of NZ Logger, now on sale at selected service stations, or to subscribe for either the printed version and/or the digital version, visit www.nzlogger.co.nz.
Farm forestry role in erosion challengesThe use of drones in forest harvesting and the control of some "spectacular" erosion will be subjects in the 2017 New Zealand Farm Forestry Association conference in Feilding this week.
Horizons Regional Council staff will discuss the complexities of farm forestry at the New Zealand Farm Forestry Conference, to be held in Feilding from April 6-10. The annual conference is hosted by the Middle Districts Farm Forestry Association and will cover the theme of ‘the challenge of diverse land forms’. Forestry is doing well at present, with a single hectare of 25-30-year old pines worth up to $50,000. The theme of the conference is "the challenge of diverse land forms" and it ranges from the terraces around Feilding, out to the coastal sand country and inland to eroding Pohangina hills.
Farm forestry options to be presented at annual conference
Horizons Chairman and Accelerate25 Lead Team member Bruce Gordon, who will open the conference, says Land Use Optimisation is one of the Manawatu-Whanganui Economic Action Plan’s nine identified opportunities.
“Building on the Region’s natural advantages, specific activities have been outlined to help unlock potential increased productivity, profitability and sustainability. This in turn will add strength to key industries to allow for more resilience in cases such as global price shocks,” says Mr Gordon.
On the first afternoon Grant Cooper, Horizons land manager, will present on farm forestry, outlining how it can be made more successful in today’s environment.
Mr Cooper will discuss the issues affecting forestry in the Region including the emissions trading scheme, Horizons’ One Plan and the benefits of the Sustainable Land Use Initiative (SLUI).
“Over half our Region’s land is classified as hill country. At Horizons we want to support farmers to plant trees on erosion prone areas where they will see the greatest benefits, not only to protect vulnerable land, but also to lead to increased productivity.”
As part of the SLUI programme to date, over 647 Whole Farm Plans covering 481,000 hectares of the Region’s hill country have been created by Horizons. Each of these plans has farm scale soil and land resource information that farmers can use to optimise production in a sustainable way.
“We can help farmers find the optimal use for their soil, and also look at potential grants to plant vegetation on this land. We’re looking forward to the discussions,” says Mr Cooper.
Horizons staff will be hosting a field visit to Goulter’s Gully in the Pohangina Valley on Sunday 9 April to look at an impressive historic erosion feature. Mr Cooper says the gully has suffered from severe erosion, until the 1970’s when forestry trees were planted.
“One full cycle of pine was harvested on this block in 2003 and a second rotation is now growing. The effects of planting and harvesting on the land will be presented while there.”
To find out more about the SLUI programme, land owners can contact Horizons’ land management staff on 0508 800 800. To register for the New Zealand Farm Forestry Association Conference, visit www.nzffa.org.nz/conference.
Guess who's teaching tall timber to ChineseWhile export logs to China from New Zealand predominate - check this out:
On February 21st, 2017 China’s Ministry of Housing and Urban-Rural Development (MOHURD) issued “Technical standard for multi-storey and high-rise timber buildings (GB/T51226 – 2017)”. In line with a global push towards taller wood structures, the code aims to broaden the scope of application of timber structures beyond the current 3-storey limit.
The new code allows wood structures up to 5-storeys. Moreover, on a case-to-case basis, structures up to 56 meters or 18 stories may be approved for construction in the lowest seismically rated zone in China (6 degree seismic) subject to local authority approval and expert endorsement. The code officially takes effect on October 1st, 2017.
Barriers remain for wood - While the code marks another step forward in the Chinese market, it is unlikely to result in a tall wood construction boom. Several barriers remain:
A lot of work remains to be done with fire code authorities to enable larger buildings in height and area. Local fire bureaus may need education to understand the new TWB code.
University of British Columbia’s Brock Commons student residence (see photo) is the first mass wood, steel and concrete hybrid project taller than 14 storeys in the world at 18 storeys. With this leading edge building as an example, Canada is increasingly recognised as an expert in tall wood
Thanks to this wood-based residence building at UBC in Vancouver, Canada is widely viewed as a leader in tall wood. Accordingly Canada Wood is a member of the TWB code committee.
CW China provided Canadian research findings and best-practices to support the code development process. Canadian experts also collaborated with the Tianjin Fire Research Institute on joint fire safety research.
Source: Canada Wood Today
Bigger Stronger Faster! - A jet boat exampleDelegates to last month's Forest Industry Safety Summit series will recall Richard Lawler's explanation of the endless loop of equipment manufacturers' developments for their demanding customers in competitive markets.
Here is a NZ example:
New generation jet boat launches in Queenstown: An innovative new generation of jet boat has launched onto the Queenstown scene, able to carry almost double the number of passengers than an average river jet boat.
Joining the ranks of Queenstown’s fast-growing Thunder Jet fleet, the jet boat was designed and built by McKenzie Marine in Bluff and is the first of its kind to use the powerful Ford Raptor engine. Thunder Jet 4 can carry 34 passengers at a time, dwarfing the standard 20 passengers, but uses the same amount of fuel as a standard jet boat.
Jet boat pioneer and Thunder Jet owner Neville Kelly came up with the concept in 2015 when planning how best to manage the current increase in demand and future- proof the company, given expected tourism growth.
“We’ve operated Thunder 4 since Christmas Eve and have been blown away by its performance. It handles as well, if not better than our smaller boats,” says Neville. The boat is already proving a hit with large groups and families.
“One of the things we hear from groups and families is they don’t want to split up to do the trip, and families don’t want one of the parents to have to stay back with the smallest child. In our boats the whole family can go together from toddlers up. They just have to fit our life jackets!”
Thunder Jet 4’s unique interior hull design means it is unsinkable. With an impeccable safety record, all of the company’s drivers also hold higher maritime safety qualifications than the standard required for jet boat drivers. Each of the drivers has a Skippers’ restricted licence, their commercial jet boat licence, and a wealth of knowledge and experience.
“While safety is obviously our number one priority, our customers come away from their experience sporting huge grins,” says Neville. “Our ride takes people skimming across the lake and then weaves between the cliffs and along the braids of the Kawarau river, with a few famous Hamilton spins thrown in for good measure. Thunder Jet 4 also boasts a 600W sound system which massively adds to the whole adventure.”
The addition of Thunder 4 will allow the company to meet current and future demand. While Queenstown tourism is booming, Thunder Jet’s extraordinary success in its five years of operation has also been recognised with its award as a Deloitte top 50 fastest-growing company in 2013.
Tech specs of Thunder 4
• Next generation 6.2L Ford Raptor engines
• CAD designed and laser cut
• Length: 8 metres
• 600w Fusion touchscreen sound system with built-in subwoofers
About Thunder Jet: Thunder Jet offers an unforgettable 47km jet boat ride across Lake Wakatipu and along the Kawarau River. Get up close and personal with the dramatic alpine scenery surrounds as you power past towering cliffs, hugging the water’s edge from the comfort of the state-of-the-art jet boats.
For more information about Thunder Jet go to www.thunderjet.co.nz.
FICA members please note: As the contractor's favourite annual conference will NOT be in Queenstown this year, you may need to wait for awhile to experience this new power trip until we all vote to return to the deep south!!
Buy and Sell
... and finally ... he's back - little Johnny!!!
The teacher says, "OK class, I'd like you all to tell me what you need at home.”
He wanted to make sure they understood that the birth of Jesus occurred for real. He asked his class, "Where is Jesus today?"
Steven raised his hand & said, "He's in heaven."
Mary was called on & answered, "He's in my heart."
Little Johnny, waving his hand furiously, blurted out, "I know, I know! He's in our bathroom!"
The whole class got very quiet, looked at the teacher, and waited for a response.
The teacher was completely at a loss for a few very long seconds.
Finally, he gathered his wits & asked Little Johnny how he knew this.
Little Johnny said, "Well... every morning, my father gets up, bangs on the bathroom door, & yells, "Jesus Christ! Are you still in there?"
Their favourite joke is to offer Johnny his choice between a nickel and a dime. Little Johnny always takes the nickel.
One day, after Johnny takes the nickel, a neighbour takes him aside and says, "Johnny, those boys are making fun of you. Don't you know that a dime is worth more than a nickel, even though the nickel's bigger?"
Johnny grins and says, "Well, if I took the dime, they'd stop doing it, and so far I've made $20!"
"Why not?" his father asked.
"My friend just borrowed it. He wants to scare his parents."
“I never want you to use language like that again. Where on earth did you pick it up?”
“From my father.” said Johnny.
“Well, he should be ashamed of himself. And it’s no reason for you to talk like that. You don’t even know what it means.”
“I do.” said Johnny. “It means the car won’t start.”
Mom replies: “Yes. What about it?”
He says: “Well, the last generation just dropped it.”
Little Johnny said, "No it doesn't."
Have a safe and productive week.
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