global wood industry demand, supply, issues phill guay

Global Wood IndustryDemand, Supply, Issues

Phill Guay

Global Impacts

Effects• Less dramatic• Longer term• Larger

Response• Day to day– Run locally

• Investments– View globally

Sales• Consider offshore

Demand Drivers

• China• Bio energy• Carbon sequestering• Alternatives

US Supply

Drivers

• Costs– Currency – Tariffs & Duties– Taxes– Transportation– Political

China

Status• Largest importer• Globally flexible• Largest exporter

– Furniture– Flooring– Plywood

Round Wood Imports

China SourcesMillion m3

Logs 2002 2007

Russia 14.8 25.4

PNG 1.1 2.3

Malaysia 2.1 1.3

Other 6.3 8.1

Total 24.3 37.1

Sawn wood 2002 2007

Russia 0.5 2.4

USA 0 1.6

Canada 0 1.0

Other 7.6 4.8

Total 8.1 9.8

Russian Supply

Log Duty• 2006

– 6.5%• 2007

– 20%• 2008

– 25%• 2009

– 20 %• 2010+

– 80% ???

Issues• Duty• Value added• Legal logging• Foreign capital

Global PlantationsMillions of Hectares

PlantationsChina Share

Other Issues

Legal logging• Lacey Act• EU initiatives

Drivers• Who is questioned• Response

Bio Energy

Carbon Sequestering

Summary

• Canada has options– US – China– Japan – Korea

• Legal logging– Drives up stumpage

• Bio energy– Drives up pulp /small

diameter

China• Remains largest– Import– Exporter

• More self sufficient• Industry growth

subsides

Russia• Great unknown

Conclusions

Pricing• Recovers Supply• Moves globally• Shifts to plantations

Survivors• Diversity sources• Diversify outlets