If we’ve learned one thing about economic uncertainty during the COVID-19 pandemic, it’s that markets will always react to demand regardless of the conditions. As tissue and paper towel manufacturers have demonstrated over the last several months amid record demand, many businesses simply don’t have time to wait for what amounts to a subjective sense of certainty. Sources: Timberbiz, Forest2Market, Madison’s Lumber Reporter The solid wood sector was hit especially hard early in the pandemic due to slowed construction, primarily in states that deemed it to be non-essential. In April, primes sold better via the big box stores, but demand for construction-grade products was near anaemic. Mill curtailments are still in place across the continent as the lumber industry, like many other industries, has made adjustments to the “new normal.” But as state economies open back up and new-home construction resumes, the sudden surge in demand has caught many lumber purveyors off-guard and prices have skyrocketed as a result. As a follow-up to last month’s snapshot of what’s happening across the North American lumber market, we are providing a glimpse of the latest developments’ courtesy of fresh data from Madison’s Lumber Reporter and Forest2Market. Western Spruce Pine Fir (WSPF – US) WSPF lumber and stud purveyors in the United States described a “robust” market last week. Buyers came in volleys to shore up their depleted inventories, making peace with the fact that their shipments may not arrive for over a month in some cases when three- to four-week order files and occasional one- to two-week rail car delays were taken into account. Bread and butter items again sold with aplomb, but “everything was moving briskly.” Eastern Spruce Pine Fir (ESPF – Canada) Eastern Canadian producers kicked off last week with higher asking prices, sending buyers into a brief digestion-phase until midweek. On Wednesday, the dam seemingly broke and a surge of demand issued forth as customers frantically tried to cover their short-term needs after having their on-ground stocks quickly consumed by ramping-up construction activity on both sides of the border. Stud prices continued to climb – aside from 2×6-8’s, the perpetual “dog of the industry” due to persistent oversupply while dimension prices into both the US Great Lakes and Canadian Toronto markets also advanced. Resultant order files were into early June. Southern Yellow Pine (SYP) Building on two weeks of significant increases, southern yellow pine (SYP) lumber prices skyrocketed in mid-May to their highest level in nearly two years. Forest2Market’s composite SYP lumber price for the week ending May 15 (week 20) was US$460/MBF, a 12.2% increase from the previous week’s price of US$410, and a 20% increase from the same week in 2019. The last time the composite SYP price was this high was in July 2018, when prices began to recede from record highs achieved in June. Based on the price performance of these benchmark products, there is clearly demand for North American lumber in the current market. But is this an indication of things to come? It’s really difficult to predict what the housing market – the principal driver of lumber demand – will do in the near term. The NAHB/Wells Fargo Housing Market Index (HMI) reflects builders’ reactions to the virus-related shutdowns, and the HMI plunged 42 points in April (to 30), the largest single monthly change in the history of the index. It marks the lowest builder confidence reading since June 2012, and it is also the first time the index has been below 50 since June 2014. Housing demand is tied to employment and unemployment has surged over the last six weeks. The current unemployment rate is nearing 15% (the highest since the Great Depression era) and, while a bulk of those layoffs will be temporary, there will likely be some structural changes going forward that will result in higher unemployment numbers than we have seen over the last two years. Lingering effects of this pandemic-driven financial crisis are also looking increasingly probable. We’re simply not going to be able to lift the restrictions, snap our fingers and go back to the way things were in January; a well-defined “V”-shaped recovery is looking less and less likely at this point. Neel Kashkari, President of the Minneapolis FED, recently said that: “The V-shaped recovery is off the table” during a virtual roundtable conversation. As MarketWatch noted, “Kashkari said the recovery would likely be long and drawn out. While there will be a bounce after the worst GDP contraction in the April-June quarter, the economy will be ‘nowhere near back’ to where it was in December 2019, he said.” The good news for lumber manufacturers in the interim is that demand is still there. And judging by recent performance, it is poised to outpace supply in the very near term, especially as more and more state economies are coming back to life. The challenge for manufacturers in the coming months will be adequately matching their production to demand while maintaining margins in a highly fluid market.
Food forestry intentionally integrates food-producing trees and shrubs in built environments to bolster community resilience (Clark and Nicholas 2013). Examples include public orchards and community food forests (Figure 1; Figure 2). Food trees as part of urban blue-green infrastructure enhance important ecosystem services such as providing shade, reducing runoff by stabilizing soils, and increasing biodiversity while simultaneously providing access to nutrients that are absent from many American diets (Lafontaine-Messier et al 2016; Clark and Nicholas 2013). In the last two decades, there has been an increase in urban agroforestry projects primarily in large metropolitan areas in North America and Europe (Bukowski and Munsell 2018; Hübner et al 2018; Clark and Nicholas 2013), but little is known about its use in smaller towns.
Mongabay senior editor Morgan Erickson-Davis joins this special edition of our podcast to provide the interesting context for the 2018/2019 special series she produced on the potential ‘Bsal’ salamander pandemic in the United States. With host Mike Di she dives into the truly unique salamander biodiversity of the United States: what makes it home to […]
Around 2008, a mysterious disease started killing off the fire salamanders in the Netherlands, and three years later, 96% were dead. That disease, Batrachochytrium salamandrivorans (Bsal), is a relative of the chytrid fungus – (Batrachochytrium dendrobatidis or ‘Bd’) that has been implicated in the decline or extinction of 200 frog species around the world – and which […]
What is a brown bear? Candid Animal Cam explores the lives of some of the largest bears in the world
The brown bear (Ursus arctos) is the most widespread species of bear ranging from North America to Europe and Asia. Due to this, they live in all sorts of habitats: temperate forests, coastal areas, meadows, grasslands, tundra and even semi-deserts. Brown bears are omnivorous and opportunistic. They feast on all types of fungi, plant matter, […]
Australasia’s newest fibre packaging and paper company was launched on 1 May 2020 after Nippon Paper Industries confirmed it had successfully completed its $1.72 billion acquisition of the Orora Fibre Businesses that have been combined with Australian Paper to form Opal. Source: Timberbiz Nippon Paper Industries and Paper Australia, a wholly owned subsidiary of Nippon Paper Industries, completed the purchase of Orora Limited’s paperboard and fibre-based packaging business in Australia/New Zealand. The business is incorporated into a new trading entity, and together with Australian Paper, will form the “Opal” group of companies. Opal will expand the packaging solution business from upstream (manufacturing/converting of renewable packaging products) to downstream (packaging-related materials and associated services) to customers in Oceania and the global market. Nippon Paper Industries will appoint its director Mr Masanobu Iizuka as the CEO of Opal effective June 25, 2020. Opal has more than 4500 employees spread over more than 80 sites and offices in Australia, New Zealand, Asia, Europe and North America and is one of the largest and most diverse fibre packaging and paper companies in the region. “Nippon Paper Industries is committing to a long term, strategically integrated approach to growth in the Australia and New Zealand packaging markets,” said Mr Tomo Koyanagi, Opal’s CEO. “Especially with current challenges, Opal’s businesses will continue to support our customers by providing an essential service of supplying recyclable packaging for the Australian and New Zealand food and grocery supply chains. Products like Reflex from Opal Australian Paper are also vital to many businesses which rely on office paper to keep their operations running.” Nippon Paper Industries is one of the world’s 10 largest paper and packaging companies and Opal is its largest investment outside of Japan. Opal is vertically integrated from base paper through to end packaging products and provides Nippon Paper with global scale in the converting of fibre packaging. “Nippon Paper is focusing on packaging as one of its key strategic growth areas and Opal provides an ideal platform to secure a strong position in the Oceania region. By working closely with our customers, Opal will deliver innovative packaging solutions,” said Mr Koyanagi. In addition to a comprehensive network of packaging converting operations, Opal operates the Botany Mill in Sydney which is Australia’s an advanced facility for recycled for brown packaging. Opal Australian Paper’s Maryvale Mill, one of the largest employers in the Latrobe Valley, is part of the Opal Group. Opal’s head office will be in Melbourne, Australia. As part of this change Australian Paper has a new website at https://opalanz.com/ where Australian Paper is listed as one of the company’s six divisions, Australian Paper has been renamed as Opal Australian Paper on the website but no mention was made of the change in other materials.
North American softwood lumber prices have bounced from lows of two weeks ago. Whether they will remain there in the short term, or if restricted supply will drive another surge upward, remains to be seen. Sources: Timberbiz, Madison’s Lumber Reporter, Lesprom The upheavals of the past month or two are far from over. The wholesaler price of several benchmark softwood lumber commodities last week recovered losses from two weeks previous, to land at levels of early April. Prices of benchmark softwood lumber commodity item Western Spruce-Pine-Fir KD 2×4 #2&Btr (RL) kissed exactly those of the same week last year, at US$336 mfbm (FOB sawmill). In addition to the sudden changes in business and indeed life, brought on by this global virus pandemic, right now the northwest of Canada is experiencing some severe flooding. A late spring break-up has brought large volumes of snow-melt and ice down the immense rivers of northern Alberta and British Columbia. While the Canadian west coast sawmilling industry always welcomes with glee the spring freshet on the mighty Fraser River, there is a temporary lull in log hauling and lumber deliveries as the usual floods across highways and rail lines arrive. Improving on increases made the previous week, for the week ending April 24, 2020, benchmark Western Spruce-Pine-Fir 2×4 prices were US$336 mfbm, up +$20, or +6%, from the previous week. Last week’s price was down -$20, or -6%, from one month ago. Compared to one year ago, this price is up +$4, or +1%Canadian Western Spruce-Pine-Fir producers described a persistent upward price trend developing in most of their wares, while buyers were beginning to get spooked by the palpable lack of wood available last week. Swathes of sawmills remained shut down or heavily curtailed, and those that were operational were “running for Asia”. Two-week or more order files at sawmills emerged as the market tightened up with so much production taken out. Sawmills had trouble keeping stock of 2×4 #3/Utility R/L on their sales lists as demand for that item was apparently really hot into Texas. Spring breakup of ice on the mighty Fraser River in British Columbia was in full swing, halting most timber harvesting and log hauling operations for the time being. Recovering some of the losses of recent weeks, last week’s Western S-P-F 2×4 price is down -$39, or -10%, relative to the 1-year rolling average price of US$375 mfbm and is down -$79, or -19% relative to the 2-year rolling average price of US$415 mfbm.Eastern Canadian lumber and studs suppliers described a mixed market last week depending on the source, destination, and item. While pricing of #2&Btr dimension lumber into the American Great Lakes market held firm for the most part, that of delivered prices into the Toronto market aside from 2×4 which nudged up $5 to US$495 mfbm.
Forests and forest relevant policies in Europe face a wide array of challenges in a rapidly changing world. Issues such as Brexit, the new European Parliament and European Commission, and the recent European Green Deal proposal are certain to affect policymaking, as are the as-yet unknown impacts of the coronavirus (COVID-19). Source: Timberbiz A new science-policy study from the European Forest Institute (EFI) provides a timely look at forest governance in Europe and offers insights into the potential way forward. Many of the forest-relevant policies currently in place have been targeted towards 2020, and while a final evaluation of their achievements is not yet possible, a look into the future is essential. Forest products and services are increasingly an inherent and integrated element of many other sectors, ranging from energy to food production to conservation and public health. This wide range of sectors and multiple interests, at different levels, leads to a complex multi-sectoral governance system. For example, within the EU, negotiations are currently ongoing on post-2020 EU policies on agriculture and rural development, biodiversity, climate, industry, food security, circular economy and new legislation on sustainable finance. All of them, and the EU Green Deal in particular, will have an important influence on forest related decision-making processes. A strategic and coordinated policy direction will be required after 2020, not least to support the implementation of globally agreed policy targets such as the Sustainable Development Goals, the Paris Climate Agreement and Convention on Biological Diversity. In the global policy arena, trade developments related to China, Russia and North America will also have important implications for the European forest sector. This report reviews significant developments in the forest governance framework including EU and international developments and discusses how coordination in other policy areas than forests can lead to policy integration. Based on evidence from a literature review, stakeholder interviews and workshop results, it outlines several potential pathways for future forest policymaking in Europe. “The European Green Deal puts the forestbased sector in a key position in climate change mitigation and biodiversity protection, and it is therefore important to emphasize forest policy integration and strengthen its implementation,” study coordinator Bernhard Wolfslehner said. The study can be downloaded at https://www.efi.int/sites/default/files/files/publication-bank/2020/efi_fstp_10_2020.pdf?utm_campaign=campaign_code&utm_content=category&utm_medium=email&utm_source=efi_newsletters
In contrast to the sharp plummets of recent weeks, most North American construction framing dimension softwood lumber prices either remained steady or dropped by smaller increments last week as distributors had decent demand from end-users. Sources: Lesprom, Madison Lumber Reporter Supply remained limited to tight, and sawmills held firm on price lists from the previous week as their order files grew out to almost two weeks. Prolific reductions in sawmill operations across the North American continent had the effect of stabilizing the lumber market further. Deep price corrections and significant counters began to evaporate as supply started to fall behind anaemic demand. Purveyors of Western S-P-F in the United States reported slow demand from the construction sector; but with reduced overall production volumes it was enough to get by. In week ending 16 April 2020, benchmark Western Spruce-Pine-Fir 2×4 prices were US$316 mfbm, up +$6, or +2%, from the previous week. Last week’s price was down -$90, or -22%, from one month ago. Compared with one year ago, this price is down -$20, or -6%. According to Canadian producers of WSPF lumber, sales volumes have been good since the beginning of April. Last week, buyers were active up until Thursday when they paused to allow inbound shipments to arrive so they could assess their strapped inventories. Availability of low grade WSPF has decreased significantly after both Canadian and American sawmills sent huge amounts of #3/Utility and #4/Economy wood overseas to China. Last week’s Western S-P-F 2×4 prices is down -$59, or -16%, relative to the 1-year rolling average price of US$375 mfbm and is down -$101, or -24% relative to the 2-year rolling average price of US$417 mfbm. Eastern Canadian producers and wholesalers, meanwhile, struggled to keep business moving. For their part, retailers described decent demand with contractors remotely ordering steady volumes of framing lumber. According to Canadian producers of WSPF lumber, sales volumes have been good since the beginning of April. Last week, buyers were active up until Thursday when they paused to allow inbound shipments to arrive so they could assess their strapped inventories. Availability of low grade WSPF has decreased significantly after both Canadian and American sawmills sent huge amounts of #3/Utility and #4/Economy wood overseas to China. Last week’s Western S-P-F 2×4 prices is down -$59, or -16%, relative to the 1-year rolling average price of US$375 mfbm and is down -$101, or -24% relative to the 2-year rolling average price of US$417 mfbm. Eastern Canadian producers and wholesalers, meanwhile, struggled to keep business moving. For their part, retailers described decent demand with contractors remotely ordering steady volumes of framing lumber.
The COVID-19 pandemic is likely to cause a global economic depression. Many sectors are being and will continue to be strongly negatively affected. Many people will suffer both from the disease and from the economic fallout. The magnitude and reach of this crisis is huge and far reaching. This article will focus on how the pandemic will impact one small sector: the industrial wood pellet industry. The two primary pathways for the evolution of this pandemic are: (1) The pandemic accelerates uncontrollably and millions of people die; or (2) The pandemic is attenuated by policies and rules restricting contact with other people that limits the spread of the disease and greatly reduces the number of deaths. Both pathways will shock national economies. If policies are aggressive and people are compliant, and if the rules are enforced, pathway 2 will limit the medical consequences. But there is no avoiding the economic consequences. The economic consequences come from three directions. Most of the economic consequences will be caused by the demand side shock. That is, the typical commerce that takes place from the purchase of goods and services will be greatly reduced as a large segment of the population stops earning wages and rapidly reduces spending. The service sector now accounts for about 80% of all US jobs and many people in that sector are not going to work and earning a wage. Much of that population has limited or no savings to draw upon. Even those with savings or who are continuing to earn a wage will spend less and focus spending on necessities. The multiplier effect works both positively and negatively. A rapid drop in spending has a magnified negative impact on economic activity. For both humanitarian and economic reasons, governments are rightly contemplating fiscal stimulus polices that will bolster spending. It remains to be seen how effective they will be and how deep the economic slowdown will be. A demand side shock can also propagate into the industrial pellet industry (discussed below) via changes in the supply of woody feedstocks to the pellet mills. There is also the potential for a supply side impact within the manufacturing sector as certain industries may curtail operations to limit personal contact. Some factory and assembly operations that are not highly automated will likely cease while the pandemic rages. Finally, relevant to the industrial pellet industry, there is the likelihood of governmental interventions that could impair logistics and also possibly temporarily alter renewable power demand. As economic growth becomes negative, many sectors and industries will suffer from a drop in demand. However, the demand for industrial wood pellets is somewhat independent of drops in economic activity. Power demand may decline marginally in a slowdown, but the power generated by wood pellets in the major European, UK, and Japanese importing markets will have a place in the grid even if other sources such as natural gas have to turn down to meet lower aggregate electricity demand. The potential exception is South Korea. Backed by long-term offtake agreements, it is unlikely that fundamental demand for industrial wood pellets will decline in any significant way in the markets supplied by North American and European pellet producers as a result of the COVID-19 pandemic. However, as noted below, policy changes could impact demand. On the supply side, many highly automated wood processing plants such as sawmills and pellet mills, should be able to operate without compromising worker safety or the safety of their families and their communities. FutureMetrics has spoken with several sawmills and pellet mills that have already implemented protocols that allow operations to continue with no close personal contact and with comprehensive and continuous attention to working with and sanitizing at-risk surfaces. Lumber and wood pellet operations should be able to adapt to the requirements for social distancing, avoiding group gatherings, and the hygiene of people and surfaces with little impact on output and only a marginal increase in operational costs. The wood supply chain is dominated by machinery operated by single individuals in the cabs of harvesting machinery and trucks. Sawmills and wood pellet plants are highly automated. For the operations and maintenance staff, social distancing, not congregating in the control room or in the break room, and frequent hand sanitizing will be the new normal until the pandemic is quashed. Office staff may have to work remotely. In all cases, just as is the case with most of the population, normal routines that include close social interaction will have to be changed. But it is likely that production of pellet fuel for export can continue. While the in-woods and transport logging operations should be able to continue to meet demand, it is likely that sawmilling operations will slow as lumber demand falls. Some pellet factories that are highly dependent on sawmill residuals will experience higher costs for alternative feedstocks or will have to move to lower production rates (or both). A drop in lumber demand will impact the demand for sawlogs. Some of the roundwood on the upper part of the tree that is harvested for the sawlogs is not suitable for conversion to lumber and typically goes to pulp and paper mills or pellet mills. A drop in sawlog demand will likely change the dynamics of supply and the cost of feedstock for pellet mills that depend on roundwood by-products from sawlog harvesting. Most North American port operations for bulk cargo shipping are likely to continue operating. Keeping workers protected is critical, but, given the automation of the systems, close contact between people is not necessary. Imports and exports of all types of bulk goods and commodities are fundamental to social stability and for the support of those manufacturing sectors that remain active. There are many reasons to work out how to run bulk loading and unloading terminals safely during a pandemic and to implement and enforce those pandemic-related work rules. Container and breakbulk shipping may be impacted. Some container and breakbulk cargos will be quarantined and possibly subject to decontamination procedures […]