WoodWeek – 25 November 2020
Click to Subscribe - It's FREE! Greetings from your favourite wood news team. Wow, what a fantastic response from you, our conference delegates at ForestTECH in Rotorua last week. With our combined audience of silviculture and forest inventory specialists, both in-person and online, we received our highest satisfaction ratings ever! Thanks to our great line-up of speakers for bringing such innovation and exciting new developments to our audiences.The technology is moving as fast as ever at our forest technology conferences. At the end of our first day, Session Chair Corrine Watson of Remsoft remarked, “Wow, when I came here today, I didn't expect to be told to ’turn my planting spade on’ before going tree-planting (to activate the GPS system in it)!” There you go, more technology with every FIEA conference (see Henry Fear for more); with or without a pandemic. If your business is connected to carbon forestry, mark your new diary with these dates: 15 &16th June - FIEA Carbon Forestry Conference in Rotorua. With change once again coming to the Emissions Trading Scheme and carbon budget plans being delivered by the Climate Change Commission, there will be plenty to discuss at our carbon forestry business sessions. We are working closely with MPI and others to arrange pre-conference workshops and post-conference information sessions to make your travel as efficient as possible. Why not make a week of it by visiting Fieldays at Mystery Creek after the conference as well! Moving to the market where PF Olsen reports A grade prices for New Zealand pine are currently about 123 USD per JASm3 and expected to increase for December deliveries. Softwood log inventory in China has reduced by approximately 17% over the last month to 3.6m m3. Daily log use in China is now back to the 100k to 105k m3 range after peaking at over 120k m3 at the end of October. The CAIXIN manufacturing PMI index rose to 53.6 in October. This shows the sector remains healthy. (A PMI above 50 indicates expansion and 53.6 is the highest since January 2011). Meanwhile in Wellington, the political pot-shots continue. This week they were pointed at forest owners, resulting in a direct response. The Forest Owners Association says the National Party vote at its Wellington party conference was “a hopeless muddle of emotive contradictions on climate change biology and economics.” Finally, with Australia's wood exporters currently getting the cold shoulder from China, comments from New Zealand last week were observed by Government officials here. Commenting on NZ’s backing Five Eyes criticism of China’s undermining Hong Kong citizens’ rights, a senior MFAT official said the New Zealand-China relationship is mature enough to withstand any friction, but exporters also need to diversify. He added that China is a ‘crucial’ market for New Zealand exporters, thanks to strong growth and good prices, but underlined the need for diversification in our markets.
This week we have for you:
Log export market update
Export Log Market Update (courtesy of PFOlsen Wood Matters): The CFR prices have increased for
New Zealand pine logs due to solid demand, reduced supply, and lower inventory levels. The price for A
grade New Zealand pine is currently around 123 USD per JASm3 and expected to increase for December
deliveries.Softwood log inventory in China has reduced by approximately 17% over the last month to 3.6m m3. Daily log use in China is now back to the 100k to 105k m3 range after peaking at over 120k m3 at the end of October. The CAIXIN manufacturing PMI index rose to 53.6 in October. This shows the sector remains healthy. (A PMI above 50 indicates expansion and 53.6 is the highest since January 2011). China has banned logs from the Australian states of Queensland and Victoria, stating they have detected live pests. The supply chain for spruce from Europe has increased in cost due to an increase in container costs. The price for new arrivals of spruce has increased to 110 EUR. The longer-term supply situation may be beneficial for New Zealand logs with forecasts that 2021 will be the peak of spruce availability from Europe and a proposed Russian ban on export logs starting in January 2022. India - Manufacturing and construction will be relatively quiet in India until late November due to the Diwali festival. Economists suggest this may be the most important Diwali festival in over 10 years. Consumption makes up 60% of the GDP in India, and an economic revival in India requires an increase in consumer spending which usually occurs in the festive season. The Diwali season usually accounts for 25- 40% of all domestic sales of consumer durables. Log supply will likely increase as log volume from Queensland that would have been sold in China has been diverted to Kandla in break bulk and Tuticorin in containers. This is additional to the regular two-three vessels from Uruguay and two vessels from New Zealand per month. Some volume from Uruguay may be sent to China if China log prices continue to lift faster than Indian prices. Kandla lumber prices are steady at INR 471 levels. Log and lumber demand are forecast to increase after the Diwali period. More >> Source: PFOlsen Wood Matters .jpg)
PF Olsen Log Price Index Basis of Index: This Index is based on prices in the table below weighted in proportions that represent a broad average of log grades produced from a typical pruned forest with an approximate mix of 40% domestic and 60% export supply. Due to the increase in export log prices the PF Olsen Log Price Index increased by $1 in November to $120. The index is currently $1 below the two-year average, $4 below the three-year average, and $3 below the five-year average. Since September, the index had tracked along the same path as the corresponding period last year but is now $1 below the November 2019 index. More >> 
Wairoa: Log trains resume
Log trains are running again on the Wairoa-Napier line from this weekend. Services were
suspended earlier this year as a result of COVID-19's impact on the forestry industry. KiwiRail Chief
Operating Officer Todd Moyle said the first train ran last weekend. He said, "We're pleased to get the service up and running again, however, with the track now back in regular use, people travelling in the area will need to take special care around level crossings. Those crossing the tracks should expect trains at any time and from either direction.” "Initially there will be two return trains each weekend. Each train is expected to consist of 24 wagons, the equivalent of 24 truckloads of logs,” he added Over time, as log volumes increase, they expect to run trains daily as there are significant numbers of forests in the Wairoa catchment that are reaching maturity. Harvest volumes in the Hawke's Bay region are predicted to reach 3.3 million tonnes per annum in the next few years and remain at high levels until the mid-2030s, so we know there is a demand for rail. Rail infrastructure investment has multiple, long-term benefits, some of which are not immediately obvious. For example, moving more logs by rail instead of trucks reduces road maintenance costs and congestion and improves road safety - particularly on regional roads like those between Napier and Wairoa which were not designed for heavy trucks. Given trains have 70 per cent fewer emissions than trucks per tonne of freight, it also helps reduce transport emissions. The line was rebuilt with $6.2 million provided to the project through the Provincial Growth Fund. Source: Scoop .jpg)
FOA calls out National Party nonsenseThe Forest Owners Association says the National Party vote at its conference in Wellington over the weekend was “a hopeless muddle of emotive contradictions which manage to simultaneously deny; ecology, biology, how to effectively combat climate change and economics.”A remit to make it illegal to plant a pine forest, if it is unlikely ever to be harvested, was passed by a delegate vote. The remit was seconded by the unsuccessful candidate for the Wairarapa seat in the recent election, Mike Butterick. Forest Owners Association President, Phil Taylor says the remit called for commercially viable large-scale native forest carbon sinks. “The only way this can be deciphered is the National Party wants a National government to subsidise growing large areas of native trees. Viable indigenous tree planting and subsequent ongoing maintenance is very expensive – there is a lot of management required.” “These trees are also far behind pines, eucalyptus and Douglas-fir, in their rate of carbon dioxide sequestration. If they are planted now, the contribution of native trees to fighting climate change won’t be substantial until next century.” “The remit also wanted to make it illegal to plant pine forests if they might not be harvested. This is again difficult to understand. It seems to have something to do with displacing food production. But the most logical places for carbon forests are on land so steep and erodible that food production isn’t any more viable than harvesting trees is. Food production is not displaced.” “The natural evolution of a pine forest, if the landowner chooses to leave it unharvested, is to transform into an indigenous forest. The delegates appeared to be unaware of this.” Phil Taylor is also critical of other claims about pine forests. “Fundamentally if the National Party delegates object to inconsequential methane emissions from decaying trees, they should be much more interested in the massive methane emissions from sheep and cattle. Livestock add to harmful greenhouse gas emissions – forests do the opposite. Trees of any forests – indigenous or pine – if left, will eventually all die. Pines don’t have a monopoly on rotting.” “The claim of pest plants breeding in pine forests is also quite odd. The 50 Shades of Green movement, in which Mr Butterick has been active, has run television advertisements claiming nothing else grows in pine forests. He seems to want it both ways. Again, forests do not have a monopoly on weeds, such as gorse – or on rabbits and possums. They are the curse of farmland too.” “The most fundamental point, which surprises me about a National Party resolution, is the fact that average hill country farming doesn’t compete with production forestry over the long term. That was the conclusion reached by BakerAg last year and even more convincingly by Pricewaterhousecooper earlier this year in a report to MPI.” “While the main target is carbon farming, the National Party conference has in effect just told landowners that they should not be allowed to farm their land and produce what they want on it, be it food, wool, wood or carbon. They are only going to be allowed to use their land for what the National Party tells them to do at the time.” Phil Taylor says on the other hand he is relieved the new Forests Minister, Stuart Nash, appears to be more open-minded about restricting landowner choice about what they do on their own land. “Stuart Nash hasn’t backed off the pre-election policy of restricting forestry on better land, but at least in our engagement so far with him, he is open minded on how to get the best productivity off our land. He is aware of the feeling about governments telling landowners what to do.” Source: NZ Forest Owners Association Forest carbon credits cleared for airlines
Airline industry clears forest carbon credits for takeoff - In a historic announcement, the global civil
aviation industry has paved the way for airlines to help neutralise their climate footprint by protecting
nature. This week, the International Civil Aviation Organization (ICAO), an agency of the UN that sets global aviation standards, approved two forest-carbon programs from which airlines can buy carbon credits. The purchase of these credits represents a reduction of climate-warming carbon emissions to compensate for emissions made somewhere else. These “nature-based” credits — under the UN framework known as Reducing Emissions from Deforestation and forest Degradation, or REDD+ — fund protections for forests that absorb and store carbon from the atmosphere. Despite significant improvements in efficiency in recent years, aviation remains one of the world’s top carbon-emitting sectors, and experts who have been following the ICAO proceedings hailed this week's announcement. “The science is clear — the world cannot meet its climate goals without significantly scaling up the protection of nature,” said Maggie Comstock, a senior director of climate policy at Conservation International, who contributed technical advice to ICAO throughout the process. “Carbon credits generated through the conservation and restoration of forests can provide high-quality emissions for airlines while protecting wildlife, keeping ecosystems intact and contributing to local livelihoods. “This is a win for the industry and a win for nature.” Under ICAO, countries agreed to cap emissions from global aviation at 2020 levels, requiring airlines to use more efficient aircraft, better operational practices and alternative jet fuels. However, even with these improvements, a large emissions gap will remain before the fast-growing sector — which was moving 4 billion passengers a year before the COVID-19 pandemic hit — can reach its stated goal of carbon-neutral growth. More >> Source: Bruno Vander Velde for Conservation.org 1.jpg)
Announcing Russ Taylor Global
Your WoodWeek team is pleased to provide an announcement from a veteran FIEA conference speaker
and one of our favourite Canadian wood export experts, Russ Taylor.We are pleased to bring you this formal announcement of the formation of RUSS TAYLOR GLOBAL, a “re- invented company” that features Wood Business and Market Consulting. Russ Taylor is going back to his roots when he started his first consulting company, RE Taylor & Associates Ltd, back in 1992. Russ’s return to consulting work, as well as selected strategic analysis areas, follows on from his 25 years of leading International WOOD MARKETS Group and then the completion of a three-year employment contract with FEA as part of the WOOD MARKETS’ sale agreement. Russ may have “retired” from FEA, but not from the wood business! Russ will now be working with his extensive global network of experts. As an independent third-party resource with no strings attached, Russ and his network are available for client needs when it comes to difficult-to-find information, for short industry/market perspectives, as well as in-depth analysis on specific topics. Feel free to contact Russ with any inquiries, or view the website (www.russtaylorglobal.com) for specific areas of specialisation and expertise: Russ Taylor, President, RUSS TAYLOR GLOBAL Wood Business & Marketing Consulting Vancouver BC Canada Website: www.russtaylorglobal.com Email: russtaylor@russtaylorglobal.com Mobile: +1 604 897 5666 More >> SnapSTAT - sponsored by COP  Source:  Carbon market update
Carbon Match: I don't know about you but I'm just going to sit - The NZU holders we
have spoken to appear to exhibit either whooping optimism about future carbon prices or
paralysing fear of selling too soon. We haven't seen the likes of it in the 10 years since we set up
a trading platform for the New Zealand carbon market. Whatever their camp, the effect is the same - there's very little supply being shown in spot. This last week has seen NZU prices firm on Carbon Match by $0.80 with a little volume offered at $35.90 and last trading at $35.80. This swift path upwards has coincided with a large climate conference in Auckland and with heightened media attention on climate change action as a result. Listening to the Green Party's James Shaw, who has retained the Climate Change portfolio, there's continuity of thinking and a strong resolve. And with Winston Peters/NZ First gone there's a lower chance of rain on the policy parade. Look straight ahead and it's nothing but blue skies? Not everybody is going to be happy. In an interview with Stuff yesterday Shaw highlighted his intention to consider putting forward a ban on the import of petrol and diesel vehicles in keeping with plans in the UK. More broadly, last week the Minister told attendees of the Climate Change and Business Conference that, although he is not yet privy to its contents, his sense is that people could find the upcoming advice of the Climate Change Commission confronting. Draft advice is to be shared in February when consultation opens. Final advice (including the first three emissions budgets and advice on how to achieve them) is to be provided to the Government in May. Then there's also the promise of news and the intrigue of the Government auctions, which will see the Government join the sell side. Some 19 million NZUs to be auctioned into the market next year - perhaps as much as half of the overall compliance demand you might expect in the scheme. The auction gig has been won by the NZX/EEX and they are reported to be on track for a first quarter auction on the 17 March 2021 - note that this is prior to the end of May surrender deadline for calendar 2020 emissions activities. When you look at the current secondary market, the Government's own auction floor price of $20 seems somewhat incongruous. Our point? These ideas, and the dialogue that builds naturally around them, do affect the sentiment of potential sellers. There's alot to digest and many, for the moment, are telling us they might just sit a bit. This is happening at the exact point that compliance entities are really seeing the writing is on the wall. The $35 fixed price option will soon be a thing of the past. With it, goes a sleep-easy safeguard on which compliance buyers have been able to rely for more than ten years. Auctions will be new and unfamiliar, for the moment spot supply is light, and not everybody is totally comfortable. NZUs - bid $35.60, offer $35.90 - Get in touch if we can be of help. Carbon Match - open every weekday 10am -5pm every weekday. More >> Gippsland: New Forest Hub
New Gippsland Forestry Hub is ready to support industry - The Gippsland Forest
Industries Hub (GF Hub) has officially been launched and stands ready to contribute to the future
of the forest and wood products industry in regional Victoria.The Gippsland forest and wood products industry is a dynamic and sustainable provider of regional employment in the community, driving economic activity and delivering essential products based on a renewable resource that sequesters carbon. The Gippsland Region is home to some 1.43 million hectares of productive forests, including 90,000 hectares of plantations as well as native forests. The forest growing, harvesting, transport, processing and manufacturing sectors in Gippsland employ some 3,400 people directly. The GFHub, including members from the forest growing, timber processing, contracting, education and local government sectors, is the latest of 10 similar Hubs located in key forestry regions throughout Australia and established as part of the Commonwealth Government’s 2018 forest policy commitments. Mr Simon Gatt said he was humbled to have been nominated as Chair of the new hub and was looking forward to working with the committee as it focuses on three key goals for the next year: > development of a 30 year strategic plan; > facilitating the role of innovation and regional research to develop a framework for future skill needs; > identifying issues, needs, and opportunities for industry development. Mr Gatt has worked in the forest industry for the past three decades and is the operations manager for Hancock Victoria Plantation where he is responsible for the delivery of operations across their Gippsland estate. He has worked in both public and private sectors across a range of native forest and plantation settings. “We are looking to identify opportunities for a growing industry into the future to make the industry sustainable while supporting local regional communities to thrive and assist in the dissemination and promotion of strategies and solutions to industry and community for the benefit of regional towns in Gippsland. The effects of COVID19 have had a dreadful impact in Victoria, but at the same time have highlighted the importance of the forestry sector in domestic made products such as paper and packaging products and additional opportunities that could be developed. “To assist us in the delivery of this work, I am delighted to announce the appointment of Lesia Clark to the GF Hub With a wealth of experience in forestry, including education and training and stakeholder engagement, Ms Clark is the ideal candidate to drive the Hub’s important work,” said Mr Gatt. Ms Clark said she was looking forward to getting stuck into the essential job of promoting and growing the industry in Gippsland. “The GF Hub has been formed with a focus on constructively and effectively engaging the community, industry, educators and government. We plan to contribute to the development of a strong, deliverable strategy and action plan for sustaining industry growth in Gippsland” she said. China: Economic indicators positiveChina’s Gross domestic product (GDP) grew 4.9% year-on-year (yoy) in Q3 2020, following 3.2% growth in the second quarter. The government has rolled out measures that include more fiscal spending, tax relief and cuts in lending rates and banks’ reserve requirements to revive the economy and support employment. While the economy has steadily returned to growth, it missed the 5.2% forecasts by analysts in a Reuters poll.China’s manufacturing economy continued a strong growth momentum into September. The Caixin China General Manufacturing Purchasing Managers’ Index (PMI index), an important indicator of the strength of the Chinese economy, grew to 53 in September from 51.2 in June (where a reading above 50 indicates an expansion in activity). This indicates the post-COVID manufacturing recovery has improved and stayed strong. Buy and Sell
Jokes - T'was a month before Christmas ...
Yes, indeed, Christmas IS coming, I just don't see anything funny in that just yet. Neither will you when your
cute, innocent children ask if Santa has to do 14-days in quarantine!?! Otherwise he'd be the ultimate
super-spreader. Work out how to explain that one! Father – “I can’t understand it. You used to be as good as Billy Jones at arithmetic.” Johnny – “Yes I was Dad. But I don’t sit next to him anymore.” ---------------------------------------- Teacher – “Name three things that contain milk.” Little Johnny – “Cheese and two cows.” ---------------------------------------- A Cowboy rides into town and stops at a saloon for a drink. When he finishes his drink, he finds his horse has been stolen. He goes back into the bar, handily flips his gun into the air, catches it above his head without looking and fires a shot into the ceiling. “Which one of you sidewinders stole my hoss?” he yells. No one answers. “Alright, I’m gonna have anotha beer, and if my hoss ain’t back outside by the time I finish, I’m gonna do what I done in Texas! And I don’t like to have to do what I done in Texas!” He has another beer, walks outside, and his horse is back. He saddles up and gets ready to ride out of town. Before he leaves, the bartender wanders out of the bar and asks, “Say partner, before you go… What happened in Texas?” The cowboy turns back and says, “I had to walk home.” ----------------------------------------  Thanks for keeping up with the latest wood news with us! 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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