Wood From Finland Conference 15.2.2018

Published: 

18.04.2018 - 13:21

Wood From Finland Conference was organized by Finnish Sawmills Association and it continued the tradition of Agents’ Day. The conference attracted over 200 participants.

The chairman of Finnish Sawmills Association, Mr. Pekka Kopra, opened the day and introduced the chairman of the seminar, Mr. Pauli Aaltonen, from JPJ-Wood.

Mr. Pasi Kuoppamäki, Chief Economist from Danske Bank gave an economic outlook. Mr. Kuoppamäki told that the cycle is good at the moment and there are positive sights for year 2018. All big economies (US, China, Russia) are growing and there are positive expectations in BRIC countries and in Europe as well. Finnish economy is to grow but it will remain still under its previous peak (in 2007). The employment situation is better and wages are growing but still all the other Nordic countries are doing better than Finland.

Senior Manager, Mr. Tuomo Neuvonen, from FOEX Indexes, introduced shortly the new Sawn Softwood Price Indices. There are two main indices for sawn softwood (pine and spruce) and six sub-indices for both main indices. Planned launch date is 27.3.2018.

Mr. Erkki Verkasalo, Research Professor from Natural Resources Institute Finland gave an outlook on wood supply opportunities and limits. According to the statistics of Natural Resources Institute Finland forest growth continues to increase during next decades in Finland. It is possible to increase sawing volumes but regional differences and differences between species (pine and spruce) are large. If 90 % of domestic log potential can be mobilised and log import and export stays at the current level, there should be left a domestic log potential of 1,7 million cubicmeters. There have already been three bad winters in a row from the logistical point of view so wood mobilisation problem is present. It should also be noted that there has to be more markets to by-products.

USA and China were the focus points of Mr. Russell Taylor’s, Managing Director of FEA Canada, presentation. China’s domestic demand will need sawn softwood exports. Russia has increased its sawnwood exports to China because of the log export tax. More exports from Europe to China to be expected. In US market less Canadian and more European export to be expected because of the “lumber wars”. Final tax to Canadian lumber is about 20 %. US softwood prices are record high and it has allowed Europeans into the market. There are some market options for planed lumber in US. Sawmill margins are high in USA (45%) and Canada 30% but low in Finland (10%). Finland has been left behind in profitability. Finland is one of the higher cost suppliers, especially in raw material (logs) and freight. In addition, by-products price is low and it is part of the problem.

Managing Director of Finnish Sawmills Association, Mr. Kai Merivuori, gave an update on the Finnish sawmill industry. The production of sawn softwood has grown in Finland and all of it has been exported because the domestic demand hasn’t grown. Export to Asia has increased and export to Europe has decreased since 1990s. TOP3 export countries of Finnish sawn softwood are China, Japan and Egypt. China is the softwood markets driver at the moment. It should be a supercycle but not for Finns.

Mr. Yogesh Jain, Director of Sitaram Ferozilal Jain Pvt Ltd, gave a short presentation of softwood in India. Softwood knowledge is limited in India. In southern India knowledge is limited to hardwood but north of India knows something of softwood. A couple of states are using Pinus sylvestris (redwood) because they have a similar species, Blue Pine, there. Demand is growing for Pinus sylvestris in India.

Marketing and Communications Managing Director of Ilim Timber, Mr. Sviatoslav Bychkov, introduced the Russian sawmill industry. In 2017, Russia exported 11,5 million cubicmeters of softwood and 7 million cubicmeters of hardwood. It was 10 % more than the previous year. More than half of the exports goes to China, 58 % in 2017. Growth was 21 % compared to year 2016. Exports to Europe increased 3 % and to MENA decreased 9 %. Wood From Finland program has been a success and it has opened prospects for Russians too. Finns have done valuable education in where wood can be used. Mr. Bychov sees that demand will be in China for decades. China remains the main market for Russian log and lumber.

Head of Road Brokerage and Business Development Finland, Mr. Harald Knaapinen from DB Schenker, spoke about trailer transports in Europe. Road freight in Europe has grown steadily since 2012. There is a driver shortage in Europe, for example there is a shortage of 1,5 million drivers in Germany. Solutions to driver shortage are for example trailers, shortsea container shipping, platooning and reducing waiting hours to minimum.

Ms. Niina Liljekvist from Port of Helsinki introduced shortly Port of Helsinki. In the light of statistics, Port of Helsinki was the busiest passenger port in the world last year, beating Port of Dover which is a big passenger port. The freight sector of Port of Helsinki has been a success last year as well.

Market discussion ended the conference and the traditional dinner was afterwads.

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