On 28 October 2022, ATIBT participated in the International Hardwood Conference held at the Sofitel Hotel in Lyon. The conference was organised by the French National Wood Federation (FNB), the European Organisation of the Sawmill Industry (EOS) and the European Timber Trade Federation (ETTF). This event gathered around 100 industrialists, traders, and experts of the sectors to discuss market trends, with a focus on the shortage of raw material availability (mainly because of the war in Ukraine, and impact of skyrocketing energy costs for the hardwood industries). The ATIBT spoke about the advantages and disadvantages of the ban on log exports to Central African countries.
On the producer's side,
Maria Kiefer-Polz, President of the Hardwood section, presented the point of view of European hardwood producers. The EOS Hardwood members expect a production decline of at least 3% this year following a double-digit increase in 2021. After a good 2021 and a bright first half of the year 2022, demand tended to slow down over the last few months and production was adapted to weakening sales, both in home European markets and in overseas markets (in Asia supply chain disruptions because of the pandemic are still present). The situation at present is quite challenging with high energy prices taking a toll on the industry, particularly in the more energy intensive beech sector. Hampered by high inflation and increasing mortgage rates, demand from consumers is now weaker. Stocks at sawmills are high and many producers expect difficult few months ahead. Lack of labour is also reported by many countries. This complicated situation is compounded by increasing export of oak logs towards Asia and China.
Benoit Jobbé-Duval, Director of the ATIBT, spoke about the advantages and disadvantages of ending log exports in the CEMAC countries (Cameroon, Congo, Gabon, DRC, Equatorial Guinea and Chad). In the short/medium term, by ceasing log exports, the Central African countries are taking a primarily political decision, as the states would in fact lose tax revenues linked to log exports and the industrialisation costs of these countries. On 28 October, CEMAC announced the postponement sine die of the entry into force of the log export ban, citing the loss of revenue for the states.
It was pointed out that the notion of added value, which is dear to all producing countries, is also accompanied by certain losses of opportunities. It is therefore necessary to carefully weigh the pros and cons and, above all, to give companies time to prepare. The investments required by companies to process 100% of the logs are slowing down, equipment deliveries are suffering from major delays, and at the country level, special economy zones are still in the making.
On the importer's side,
The Hardwood President Ad Wesselink, on behalf of the European Timber Trade Federation, underlined an increase of imports about 15% of temperate sawn hardwood (EU27+UK, compared to the first 5 months in 2021), mainly oak and beech. On a positive trend also the imports of tropical sawn hardwood were reported. At the same time, Wesselink stated about 22,000 tons of oak missing due to the full stops of sawn activities in Russia and Belarus, a worrying increased inflation combined with increased logistic costs. On the bright side, he echoed Mrs Kiefer-Polz in stressing the undeniable recognition of wood as an environmentally friendly construction product – the increased use of wood might compensate the expected slowdown in the construction market.
On the user's side,
The European parquet market, as presented by Mr. Lorenzo Onofri, was good in 2021 (+6.2% compared to 2020) but has already started to decline in 2022, reflecting declining consumer confidence (war, energy prices and lack of affordable oak and birch plywood - mainly from Russia).
The EU parquet producers (represented at European level by FEP), together with other associations, urge the EU to put in place a tool to limit the export of oak logs outside the EU. Due to the shortage of oak, the flooring industry is looking for sustainable alternatives and is seeking to diversify its supplies by increasing the use of tropical wood.
Results 2021: species utilisation rate
Sharing the same challenges as the flooring industries, the European furniture sector, as De Jaeger pointed out, expects the market to slow down again in 2023, with increased difficulties in sourcing raw materials and prices expected to rise.