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From Russia's Lesprom, and Russian Forestry Review

Wood products set to take off after 2009

Moscow. Mar 26, 2009. /Lesprom Network/. The year will be a tough one for manufacturers of engineered wood products, but the market should grow quickly after that, says an Australian research company.

BIS Shrapnel's report, Structural Engineered Wood Products in the Pacific Rim and Europe 2009-2013, was released and analyses the global outlook for production, consumption, trade and prices for laminated veneer lumber (LVL), I-joists and glue laminated beams (glulam).

The cheaper LVL and I-joists will likely capture a much more significant share of the floor, wall and roof framing market over the next decade as cost and building efficiencies become increasingly important in the high priced building industry, the report said.

A synchronised upturn in global economic conditions and housing construction from 2010 should drive the recovery and consumption of engineered wood products should increase to new peaks by 2013.

In New Zealand there are 4 facilities producing LVL. A significant proportion of current capacity in New Zealand is non-structural LVL, and dedicated to export markets, suggesting there will be potential for capacity expansion. More than 80% of LVL produced here is exported and Japan and Australia are the largest destinations.

European dominance of the glulam import market in Japan is expected to continue and New Zealand producers would need to target a wider range of export markets to be successful at marketing glulam internationally. New Zealand producers would continue to export small volumes to Japan in niche market applications and could gain a larger share with new generation products.

BIS Shrapnel's report identifies North America, Australasia, Europe and North Asia (Japan and China) as the key players in this market over the next 5 years.

The report's author and BIS Shrapnel senior manager, Bernie Neufeld, warned the industry could be caught short during the next upturn due to recent manufacturing site closures, which could cause a stronger escalation of prices.

"The downturn has caused significant over-capacity in North America, which will need to be absorbed quickly during the forthcoming upturn if capacity is to be expanded further," he said.

Global LVL production peaked at 3.9 million cubic metres in 2006, a 14% increase in two years, but declined by 14% in the two years to 2008, while I-joist production declined by 35% in the 5 years to 2008.

These declines were concentrated in the United States. On the contrary, the production of glulam increased by 31% in the past 5 years and was concentrated in Europe. BIS Shrapnel predicted LVL production to increase by 52%, glulam by 25% and I-joists by 53% over the forecast period, 2009 - 2013.

"These increases will be driven by a strong recovery in housing construction in the United States, and a synchronised global economic and housing upturn," says Neufeld. "By the end of the forecast period, production for all three products should be well above historical peaks."

"Also, all of these products will increasingly be substituted for sawn timber, steel and other materials in the established markets of North America, Europe and Australasia, and increasingly in the newly developing markets in Eastern Europe, Asia and South America, giving more legs to the upturn," Mr Neufeld said.