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Home  Newsletter Archive   March/April 2001


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Brazil Hardwoods IncUSA

Ligna A.S.Czech Republic

Pennsylvania Forest ProductsUSA

Will ChristopherUSA

John Bannerman LtdEngland

Vicente Gris, S.A.Spain

OU ImprestEstonia

Botanica Madeiras LtdaBrazil

MLD Ecorecycling & Trading SRLRomania

HBK Holz & Baustoffkompanie GmbHGermany

Paul Harris
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Market / Prices: US Hardwood
Resilience surprising as economy shakes

Latest News Highlights
The latest industry news

Laissez faire - traders mantra finds its voice . . .
Accents need work but the message is unmistakable

Timber tycoon jailed for corruption
Prison for President's former golf buddy

Japan: Softwood plywood production reduced
Soaring cost of Russian logs affects output

Controversy as lumber agreement ends
Softwood pact expires

One fifth of forests could supply all wood
Top 10 firms could lead way

Expect more bad news - Wall Street
Lower earnings estimates released

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"Blimey Alfie, they take their Sin Bin a bit seriously !"
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Just for a Laugh
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S. Silverman & Son (Importers)

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Resilience surprising as economy shakes

Hardwood Lumber: Considering the shaky state of the economy, the resilience in the hardwood lumber markets is surprising.

Prices of several products stand at a twelve-month peak, including dressed lumber, dimension lumber and Mahogany. Such products are used predominantly by furniture and cabinet manufacturers.

Mahogany is priced almost 12 percent higher than at the beginning of 2000 and a staggering 31.6 percent higher than five years ago. While the price index for veneer departed a bit from its temporary peak in September 2000, it still stands 2.7 percent above its year-ago level. All eyes are now focused on a US$45m three-year TV advertising campaign which has been launched across North America by a coalition of wood industry companies to promote wood as an affordable, safe and reliable building product.

Rough lumber has shown some weakness recently. This product is mainly used in the construction industry. While the housing market is still fairly strong in the United States, builders have already purchased - some six months ago - most of the wood needed for the houses now being erected.

However, in anticipation of an imminent deceleration in the housing business, they are refraining from buying more wood and - by implication - prices for rough lumber are dropping. They reached an intermediate peak in April of 2000. From there, prices fell continuously and are now standing 1.4 percent below the April peak. Nevertheless, on a year-over-year basis, prices are still 1.3 percent higher, and on a five-year historic basis they are almost 17 percent higher.

Engineered Products: For all the engineered wooden boards monitored, prices decline during the past six months. Particleboard suffered the steepest decline.

After a brief period of modest strength during the first half of 2000, prices of particleboard resumed their descent. In fact, they are almost 7 percent below year-ago levels. Even worse, prices are some 8 percent lower than at the beginning of 1996. The reasons for this demise are: industrial over-capacity, a sagging demand due to slowing end-user markets (mainly furniture and housing), and increasing competition from MDF which offers a number of superior product features.

Plywood targets the same end-users as particleboard, and therefore it is exposed to similar market forces. Like particleboard, plywood is fighting against a newer product - OSB. Plywood seems to be at the losing end of the battle. OSB is considered by many as a superior product and it has been consistently eroding plywood's traditional markets.

After reaching a temporary peak in July of 2000, plywood prices have declined significantly. On a year-over-year basis, prices are now 0.5 percent lower, however, the product remains with a 6.5 percent premium above its 5-year ago level.

MDF capacity is also larger than what the market can absorb. In view of the slowing business cycle, the capacity overhang may further grow this year. During the first nine months of 2000 prices firmed a bit but then declined for the remainder of the year. Nevertheless, the year-end price remained 1.4 percent above the beginning price.

However, from a longer-term - five-year - perspective, prices are more than ten percent below par. On a more positive note, MDF is well positioned to be a prime beneficiary once the economy improves. Furniture manufacturers are turning increasingly to this product, to the detriment of particleboard.

Finished and Semi-finished Wooden Products: As with raw-material prices, prices of finished products are still fairly strong and do not yet reflect the weakening state of the US economy.

Some of the products' price indices stand at twelve-month highs. With labour costs being stable, most secondary wood product manufacturers could at least maintain their profit margins. In fact, manufacturers using much particleboard and/or plywood could probably enhance their profit margins, considering the falling prices of those inputs.

With the exception of cabinets, all other finished and semi-finished are now quoted at higher prices than one year ago. The steepest increase refers to chair frames with a year-over- year price advance of 4.4 percent.

Apart from chair frames, finished chairs and tables, all other products experienced only modest price increase, both on a year-over-year basis, as well as over a 5-year time horizon. We have already mentioned that prices of cabinets even declined by one percent last year. In view of falling corporate profits and curtailed investment budgets, it is understandable that prices of office desks advanced only by one percent since January 2000.

However, prices are now 14.5% higher than in January of 1996, the steepest long-term increase of all products in our observation basket. This is not surprising in light of the excellent business conditions during that time.

Article courtesy of ITTO the International Tropical Timber Organisation.

Timber News Highlights

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New Zealand: Forecasts tip 58 per cent jump in wood supply by 2003
Wood available from New Zealand plantation forests could increase by 58 percent to 28.6 million cubic metres a year by 2003, from 18 million cubic metres in 2000.

USA: Willamette will probably crumple - after squeezing money from suitor
Paper company Willamette Industries Inc, despite four months of fending off larger rival Weyerhaeuser Co.'s $5.4 billion takeover bid, will probably crumple - but only after squeezing more money out of its hostile suitor.

Norway: Norske Skog Canada buys Pacifica
Norwegian forestry firm Norske Skog said its Canadian unit would buy Pacifica Papers Inc to create North America's third largest newsprint and speciality groundwood papers group.

China: Imports of forest products up 22.8 per cent
Imports of forest products in 2000 were valued at US$ 9.862 billion - up by 22.8% over 1999 according to the latest statistics from China's Customs.

UK: HRH Prince Charles meets leading timber players
HRH The Prince of Wales met with leading timber industry players to discuss the role of independent certification in the future of the world's forests.

Australia: 'Nobel Prize' for timber research won by scientist
The world's most prestigious award for timber research has been won by an Australian scientist.

Nepal: Rampant tree-felling shrinks Nepal's forest cover
Mountainous Nepal's total forest cover has shrunk due to rampant tree-felling for fuel and to create space for farming, according to a report prepared by the U.N. and the government.

Canada: Weak market forces Uniforet to extend mill downtime
As the weak market for pulp continues, forest products group Uniforet has extended the downtime at its Port-Cartier pulp mill, in Quebec, until June.

Scotland: New system to help foresters unveiled
New geographical information systems that enable foresters to see on computer screens the likely effects of their management decisions have been demonstrated in Scotland.

Laissez-faire - free trade, free trade, free trade . . .

The French accents may need refining but that was the cry this weekend of US consumers and homebuilders, when it was confirmed the Softwood Lumber Agreement between the USA and Canada is coming to an end.

Unless the situation changes literally in the final few hours before the agreement expires on March 31, there will remain no consensus for either an export tax or a stop-gap deal to prevent trade action by the USA against Canadian lumber.

Members - Find out how by reading the latest reports about the Agreement on TIMBERWeb.

Timber tycoon jailed for corruption

A convicted timber tycoon - a former golfing partner of a President - sentenced for failing to carry out a forestry mapping project is to be incarcerated in an infamous Far East prison.

Japan: Softwood plywood production reduced
A Japanese timber company is to reduce production by 20 per cent until the end of March due to the soaring cost of Russian larch logs and stagnant prices for softwood plywood caused by a lack of demand.

The announcement was made by Hayashi Plywood Industrial Co., Ltd, one of the major softwood plywood manufacturers in Japan, said the International Tropical Timber Organisation.

Nisshin Corp. has also reduced output by 15% for March. Softwood plywood mills use Russian larch as a main raw material but prices have gone up due to the supply becoming very tight due to cold weather in Russia and due to competition from Korean and Chinese buyers.

Meanwhile, ITTO reports that Japan's imports of glulam in 2000 have been reported as 444,591 cubic metres, representing a 64% increase over 1999. This is the second consecutive year of record imports.

The demand for glulam has increased due to the increased use of laminated products under the newly introduced Housing Quality Assurance Law.

Controversy as lumber agreement ends

America's big home improvement chains and house-builders welcomed the news that the five-year-old pact limiting Canada's shipments of softwood lumber into the United States expired at the weekend.

Members - to read the latest developments during a busy weekend of diplomacy click here and log on.

England: One fifth of world's forests could supply all future wood - report

One fifth of the world's forests could supply enough industrial wood and wood fibre to meet future projected needs, provided the harvesting was well managed and led by the globe's 10 largest processors and buyers of wood. That is the verdict of a ground-breaking new report 'The Forest Industry in the 21st Century'.

Members - to read the full story click here and log on.

Into the woods - expect more bad news says Wall Street

NEW YORK, March 26 (Reuters) - Money certainly doesn't grow on trees - at least not in the current economic climate - as Wall Street has made perfectly clear with lowered earnings estimates for the wood and paper products industry.

Members: What's New?
New - Publish your buying requirements free

Struggling to source an unusual requirement ? Supplier let you down at the last moment ?

You can find a solution by publishing your individual or grouped Buying Requirements on TIMBERWeb free of charge. The information will be linked to your own Members Page, driving new contacts to you.

All Full Members of TIMBERWeb are entitled to use this service, which is ideal for Buyers looking to find the right product quickly and easily.

Sellers can still publish their Stocklists using our popular service, with the information also linked to their Members Page.

S.Silverman & Son (Importers) Ltd
Leading UK timber supplier S. Silverman & Son (Importers) Ltd is celebrating its 50th year in business in 2001.

The company has come a long way from its humble beginnings in the East End of London, and today has branch locations across the South of England as well as a distribution centre in Manchester.

The business originally grew quickly in the veneered panels market, which established the company's name within the timber trade.

It has maintained this reputation to the present day and is recognised as the market leader in various sections of the timber trade, most notably veneered boards, flame retardant boards and marine plywood.

The key to the company's success has been its endeavour to operate at the top end of the quality of any given product range, to ensure that its customers receive consistency in the quality of their supplies.

Primarily suppliers of veneered boards, melamine faced boards, M.D.F., flexible products, blockboard, chipboard and plywood, in 1999 the company doubled its warehouse capacity in Basildon, Essex.

Last year, it increased its stock holding capacity in Borehamwood, Hertfordshire, when it moved its warehouse and sales department and more is planned this year.

The company is also broadening its product range and has introduced a number of commercial products aimed towards the building/construction trade. The company continues to be a leading UK distributor for veneered boards - selling 125 veneered M.D.F. products alone.

Just for a Laugh

You'll love this one . . . . ?

A man wearing hospital issue pyjamas hobbles into a pub.

He has a plaster cast on one leg, bandages around his head, with his arms attached to several tubes and a drip he drags on a trolley behind him.

He approaches the bar and asks a barmaid: "I'd like a triple scotch, 4 pints of beer, a rum and coke, a bottle of Guinness and a packet of peanuts please."

As the bemused barmaid starts pouring his drinks the man says to her: "Oh dear, dear, I'm dying for a drink. But you know I really shouldn't be drinking these today."

"Why's that ?" she replies.

"I've only got 30 pence on me."

This next one is even worse . . . .

A man was looking for a job.

He met up with a timber contractor in the pub and pleaded with him for a job as he was desperate.

After much persuasion the contractor agreed to give the man a try and explained to him he would lend him a chainsaw, but he would need to fell a 100 trees per day to make his wages.

The next morning they met up to start work and off went the man to begin felling the trees.

At the end of the day they met up again. "Well, I've worked really hard today, but I've only felled 50 trees, there must be something wrong with this saw!

The contractor picked up the saw and started it up.

The man jumped backwards, "Whatever's that noise?"

Send us your jokes (no rude ones please). All jokes published will receive a prize.

Email them today to: news@timberweb.com

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