Vietnam – According to Trieu Van Luc, deputy director of the Department of Forestry and the most recent data available at press time, some of Vietnam’s main wood product export markets (EU, US, Japan, South Korea) still face economic difficulties; product protection policies, strict implementation of regulations on illegal wood exploitation, reduction of greenhouse gas emissions, regulations on deforestation and forest degradation of European Union (EUDR), anti-dumping and anti-subsidy investigations of the US and South Korea.
The world situation continues to face geopolitical risks, complex and unpredictable economic fluctuations. In addition, the impact of high sea freight rates leading to an increase in prices of imported raw wood (some imported wood increased by 40 percent compared to 2023), is causing production costs to rise while importers require a reduction in prices.
The refund of value-added tax (VAT) for enterprises producing wood chips and plywood products still faces many difficulties because verification procedures for forest owners takes a lot of time.
In addition, there are difficulties in damage caused by storm No.3. This storm caused severe damage to property, crops, livestock and socio-economic infrastructure, in which the forestry production sector also suffered great damage. An area of nearly 170,000 hectares of planted production forests was damaged which will significantly reduce the source of raw materials for the wood processing industry. Many wood and forestry production and export establishments in northern mountainous provinces were damaged and need to be repaired.
In order to achieve the export target for wood and forest products in 2024 of 15.2 billion USD, of which wood and timber products are over 14.2 billion USD, an increase of about 6 percent in exports is required compared to 2023.
Trieu Van Luc said that the entire forestry sector is currently focusing on overcoming consequences caused by storm No.3 promptly supporting units and enterprises in forestry production, wood processing and export of damaged forest products to quickly stabilize production.
The Department will deploy solutions according to the direction of the Prime Minister in Official Dispatch No.470, dated May 26, 2023, on continuing to resolutely and effectively implement tasks to remove difficulties for production and the business of enterprises and people.
United Kingdom (UK) – Against the background of a slow economy, with 2024 GDP growth forecast at just 0.7 – 1.1 percent and particularly contracting construction output, UK timber imports fell in the first half of the year.
According to the latest figures available at press time from the UK timber trade body Timber Development UK (TDUK), timber and wood product imports overall were down 3.6 percent in volume from January to June compared to the same period in 2023, to 4.9 million cubic meters.
The sharpest contraction came in wood panel products, with volumes 6.1 percent lower over the six months. Solid wood imports (hardwood and softwood combined) were down 1.2 percent.
The TDUK said that in most months during the period, overall import figures ‘closely matched the volumes of 2023’, however there was a significant fall in March. More positively, imports in June 2024 rose 0.5 percent on the same month in 2023, helping keep the year-on-year deficit for the first six months overall at 3.6 percent. That compared with a 4.3 percent volume fall for January to May on that period last year.
Temperate and tropical hardwood imports altogether in the first half of 2024, were 7 percent lower in volume than the first half in 2023 at 225,000 cubic meters and 6.2 percent lower in value at £174 million. A 10,000 cubic meter fall in imports from Latvia was the main factor.
Tropical hardwood imports were 2.7 percent lower in volume at 44,000 cubic meters, and 3 percent in price at £41 million. The Republic of the Congo increased its sales to the UK in the first half of 2024 by 24 percent, giving it a 30 percent share of the UK’s total tropical imports. This put it ahead of Cameroon, which supplied 4 percent less, giving it a total UK tropical import market share in the six months of 28 percent.
The UK’s tropical timber imports from the Democratic of Congo and Malaysia also both fell in the first six months, by 30 percent and 22 percent respectively.
Poland’s sales of tropical timber to the UK rose to give it an import market share of 6 percent. That compared to 1 percent in the first half of 2023. The main species it re-exported were Virola, Imbuia and Balsa, but TDUK did not have access to details on the countries of origin.
UK temperate hardwood imports in the first half of 2024 compared to the same period in 2023 were 3.3 percent lower in volume at 133,000 cubic meters and 3.1 percent in value at £112 million. Besides Latvia, import volumes from the US, Germany and Croatia were all down.
The volume from France rose 1 percent to give it a 22 percent share of UK temperate hardwood imports. That put it ahead of the US, with its share falling from 22 percent in the first half of 2023, to 21 percent in the period this year.
The UK’s imports from Romania increased in volume by 23 percent, taking its share of the country’s total first half temperate hardwood imports up from 9 percent in 2023, to 11 percent this year. The UK’s first half of mixed hardwood imports declined by 20.2 percent in volume from 2023 to 2024 to 48,000 cubic meters and by 24.1 percent in value to £21 million.
Turning to engineered wood products, UK imports of laminated veneer lumber were 21.4 percent lower in the period and cross laminated timber 15.3 percent at 14,000 cubic meters. But imports of glulam rose 12.2 percent to 23,000 cubic meters.
The timber trade attribute virtually across the board fall in UK timber imports chiefly to the continuing slowdown in construction and consequently in the building products market.
The Builders Merchants Building Index (BMBI), produced by the UK Builders Merchants Federation, showed merchants’ sales increase in the second quarter of 2024.
However, on a like for like basis, they were down 8.8 percent on the second quarter of 2023. Sales of builders’ merchants’ two biggest product categories, timber and joinery products and heavy building materials (such as bricks and blocks) were down 7.4 percent and 8.4 percent respectively.
Germany – The business climate in the German wood industry remained clearly negative in September 2024 according to the most recent data available at press time. The current business situation and business expectations for the wood industry as a whole are equally negatively assessed by companies. However, business expectations for the next six months are worse than the assessment of the current situation in four out of six sub-sectors. In view of the numerous negative economic reports recently, companies seem increasingly pessimistic about a rapid economic recovery.
From the German Woodworking Industries Association’s point of view, this is mainly due to the declining demand for construction as a result of high construction costs, poor financing conditions and inadequate funding for new construction. The number of approved single- and two-family houses fell by 26.5 percent in the first seven months of 2024 compared to the same period last year and the number of multi-family houses fell by 23.2 percent. The significant drop in the inflation rate in Germany could have a positive effect in the coming months. The propensity to save, which rose recently, had a dampening effect on the recovery in the consumer climate. The slight improvement in the consumer climate is likely to have a positive effect on the development of the consumer-related segments of the wood industry in the coming months.
Central/West Africa – The Azobe market in the Netherlands is buoyant, especially for large sizes used in dragline mats. Prices are rising due to stronger demand, partly driven by wind turbine installations across Europe. Elsewhere in Europe, the market remains quiet according to the most recent information available at press time. Chinese Azobe demand has slightly increased, possibly due to flooding damage and demand in the Philippines also remains strong, as the country needs wood for reconstruction and housing projects.
Regional markets and operations
Both Cameroon and the Central African Republic were experiencing heavy rains at press time, affecting timber operations. The Okoume peeling market is stable at low levels. Plywood production is hindered by frequent electricity disturbances. In Libreville, Gabon, power cuts are significantly disrupting production. Some companies have reduced their workforce due to machine downtimes. Some Chinese owned mills have closed due to insufficient orders and challenges in sourcing alternative species.
In the Republic of Congo operations are running smoothly without disturbance. The country continues to supply Okoume and red hardwoods to China and the Philippines.
Gabon – Export contracts with China remain limited, but the local timber industry in Gabon continues to experience demand for Okoume wood and there has been a slight increase in prices.
Significant improvements in infrastructure are underway, with China funding repairs for 3,000 kilometers of roads, upgrading them to tarmac surfaces. Container availability is adequate, ensuring smooth logistics for timber exports.
Market demand and orders
Market demand presents a mixed picture. China experienced a previous drop in orders but there is a slight resurgence in demand, particularly for species like Belli, Okan, Okoume and Movingui. The Philippines continues to show steady demand, especially for reconstruction and housing projects.
The Middle East market is improving, with increased Inquiries and growing demand for species such as Andoung, Iroko, Padouk and Okoume. Inquiry levels in Europe remain stable, with continued interest in various timber products.
Regulations, labor, health and safety
Ongoing developments in the Convention on International Trade in Endangered Species regulations are having an impact but there are no new government policy changes affecting the timber industry. Similarly, no additional changes have been reported regarding government fees beyond increased port charges and customs duties.
In terms of health and safety, some cases of COVID-19 have been reported, mainly manifesting as heavy flu due to the rainy season. Additionally, two cases of Mpox (Monkeypox) have been announced in Gabon. The situation is being monitored, but there are no significant health alerts affecting industry operations according to the most recent data available at press time.
Cameroon – Harvesting activities in Cameroon have been affected by the return of heavy rains, with the rainy season expected to continue until December and stock levels are impacted accordingly. Transportation remains a concern due to weather conditions. While roads are generally in an acceptable condition, laterite-based roads are managed with barriers and no traffic is allowed when it rains. No major rail disruptions are reported.
Container availability is not an issue in Cameroon, with enough empty containers in stock to meet export demands. Port operations are running smoothly, with no significant disruptions in dispatch or overall activities. Non-governmental organization surveillance continues but is limited to monitoring activities without significant interventions.
Switzerland – The economic situation of Swiss sawmills worsened in 2024. In addition to the weakening European construction industry, this is also due to the appreciation of the Swiss franc.
While the current supply of roundwood and the continued high-capacity utilization of timber manufacturers are positive, the sales market for Swiss sawn timber remains challenging in view of the strong Swiss franc and the resulting price differences to the euro.
The Swiss timber industry does not expect the situation in the European construction industry to improve significantly in the coming months. The cost pressure in Switzerland will continue unabated in the coming months.
North America – In August, monthly imports of hardwood flooring fell below 5 million USD for the first time since February 2021. Imports fell for the third straight month, dropping 20 percent from the previous month to a level 26 percent below that of August 2023. The decline came even though imports from top trade partner Indonesia rose 18 percent and other top trade partners also saw gains. Total imports of hardwood flooring are down 14 percent versus last year through August.
US imports of assembled flooring panels took a pause in August after rising in each of the previous four months. Imports fell by one percent in August but remained 34 percent higher than in August 2023.
Imports from Indonesia more than doubled from the previous month while imports from China gained 83 percent. Total imports continue to outpace those of 2023 by 32 percent through August.
Moulding imports slacken
US imports of hardwood moulding took a slight hit for a second straight month but continue to stay at a level well above that of last year. Moulding imports fell two percent in August but remained 34 percent higher than that of August 2023. Imports from Brazil continue to disappoint, falling 35 percent in August and down more than 50 percent for the year so far. Imports from Malaysia rallied 60 percent in August but are still down 7 percent for the year to date. Total US imports of hardwood moulding are up 26 percent versus 2023 through August.
Brazil – In September 2024, the total Brazilian exports of wood-based products (except pulp and paper) increased 20 percent in value compared to September 2023, from 260.9 million USD to 313.5 million USD.
Pine sawnwood exports increased almost 10 percent in value between September 2023 (41.4 million USD) and September 2024 (45.3 million USD). In volume, exports increased five percent from 182,000 cubic meters (September 2023) to 190,900 cubic meters (September 2024).
Tropical sawnwood exports increased 12 percent in volume, from 23,000 cubic meters in September 2023 to 25,700 cubic meters in September 2024. Export earnings decreased two percent from 10.2 million USD to 10.0 million USD over the same period.
Pine plywood exports decreased 40 percent in value in September 2024 (48.5 million USD) compared to September 2023 (68.0 million USD). In volume terms, exports increased 32 percent over the same period, from 153,400 cubic meters (September 2023) to 202,900 cubic meters. (September 2024).
As for tropical plywood, exports increased 33 percent in value and 35 percent in volume, from 1.2 million USD and 2,000 cubic meters in September 2023 to 1.6 million USD and 2,700 cubic meters in September 2024.
The value of wooden furniture exports increased from 47.1 million USD in September 2023 to 51.0 million USD in September 2024, an increase of eight percent.
