23 November 2018. Original language, German.

How is stock of sawn softwood timber at the moment in the sawmills and that of importing companies? What development do you see here?

The Q4 demand has slowed down a little due to normal seasonality meanwhile production at sawmills has stayed at similar level or increased a little. This has caused for the stocks to increase at sawmills but we must remember that stocks at sawmills have been very low during the course of the year.

Do you see possibilities to rise softwood production in Germany in the near future considering log availability and available workforce?

Raw material situation in Europe generally speaking is tight but as we have had storms in parts of Southern Europe and subsequently potential insect problems, we will have a higher availability of logs in the short and possibly medium term in affected parts of Europe. In a similar fashion, a series of windstorms have been also ravaging Central Europe, in particular parts of Austria, and Czech Republic. Raw material availability across Europe is the bottleneck to increase sawmills’ production but the workforce shortages has also started play a bigger role in this.

What development do you expect in terms of prices for sawn timber during the next months?

There has been softening of the market and prices during the autumn due the fact that stocks have risen as a consequence of the production being higher than demand. Production curtailments have been announced in some countries, particularly in Finland, to be implemented already this year.

The German state of Baden-Württemberg is going to implement a policy to give preference to timber as a construction material. At the moment 1/3 of single family houses in the state are built with timber. Is it realistic to expect much higher timber consumption in the construction sector in upcoming years considering diminishing log availability due to changes in the forest structure and competition for the raw material from other sectors such as cellulose for packaging? 

Science is predicting that climate change and increasing CO2 concentrations are expected to affect site suitability, productivity, species composition (increasing of hardwood species) and biodiversity. In general, forest growth is projected to increase in northern Europe and to decrease in southern Europe, but with substantial regional variation. Nevertheless, this element is not per se enough to make assumptions on how and if the use wood in construction will be affected. In 2017, the Indiana Hardwood CLT Project uses low-grade hardwood to create a high quality CLT product to be used in commercial projects. Technological innovation can be a strong factor in shaping the market.

How do you think the US-market for softwood will develop for German producers? On the one hand there is a big housing deficit, on the other hand the American Softwood Lumber Board is taking steps to promote the worldwide use of softwood. Is there a stable perspective for the US-market?

The underlying demand in the US is good and there is a need to build houses. But the labor availability in the construction is one of the bottlenecks in the US housing market and as a result the length of time is takes to build a detached house is taking longer than before. Subject the USD/EUR rate being stable the US market will remain an interesting market for the European companies that are present currently on the US market.

How do you see CLT with its relatively high raw material consumption per m² as a product in the future?   

The sawmills in Europe are currently investing in increasing efficiencies and also further processing. The general trend to be able to get more value from the expensive raw material the industry is working with. There is presently no reason to believe that the demand for CLT will not continue its stable and steep upward trajectory in the future.

Do you see promising product developments from hardwoods for applications in construction or packaging where traditionally softwood is used?

Currently the European sawn hardwood market is stagnating. This is aggravated by the growing logs export demand; for several years − in which 30% of the sawmill plants have been shut down in France, Germany and Belgium alone, European hardwood sawmills have been denouncing a lack of oak and beech due to the exports to China. In order to ensure that opportunities for industrial development are identified and pursued, it is important that trends in timber supply (including trade aspects) are carefully monitored. New, marketable and innovative applications of hardwood species − expected to be abundant in Europe − should be supported in the framework of European R&D funds. Engineered wood products such as glulam are currently made almost exclusively of softwood species. However, hardwood species (particularly beech) seem to have good potential in this respect. Glued laminated timber made of suitable broad leaf timber achieves extremely high strengths.

How do you think about joint public relations activities of forestry and wood processing industry regarding forest management, timber cutting and using? Are there promising initiatives? Do you see success in influencing on public opinion?

Although science has recognised that wood is one of the most sustainable and environmentally favorable construction materials available, negative perceptions persist about forestry, forest products and the forest products industry.  This is affecting not only the attractiveness of the industry as an employer for the youth but also the general public’ attitude about forest harvesting. The public perception is that the more paper or wood products are consumed, the more deforestation is going to take place. This assumption is wrong. Regretfully, the forest products industry has not been very successful in communicating with the public about their efforts to conserve and forest resources and use them sustainably, not only conserving existing resources, but also rehabilitating degraded lands and converting them into planted forests.

EU Member States and local communities should be encouraged to communicate with the public and young generation on the importance of the forestry industries while showcasing their correlated innovative and sustainable character.