European hardwood forests are now growing on softwoods, with climate change driving a major shift in the makeup of forests across the continent. However, despite the increase in available hardwoods and growing demand for timber (with 550 million cubic metres of wood harvested annually), local lumber manufacturers are being squeezed out by non-European competitors with the edge on labour and production costs.
“European roundwood is being exported, processed abroad, and re-imported back into Europe at lower prices, creating market distortions,” said Silvio Schüler from the Austrian Research Centre for Forests, who spoke at the International Hardwood Conference in Vienna, Austria.
It comes as Europe’s largest hardwood producers (including France, Germany, Romania, and Poland) struggle with slowdowns in the housing market, beefed-up regulations, surging production costs, and sluggish export markets. “Besides the Ukraine War, conflicts in the Middle East have affected global trade, restricting the export of hardwood lumber,” according to the German representatives at the conference, who added that reduced exports and sales opportunities have led to “production declining significantly over the past two years.”
The challenges are also being faced across the Atlantic, with Michael S Snow, the Executive Director of the American Hardwood Export Council (AHEC), revealing that the United States annual rate of hardwood production dipped to just 5,543,898,700 board feet last year—its lowest since 1960 and less than half its 1999 peak of 12,619,000 board feet.
According to Mr Snow, the slowdown can be attributed to a significant drop in domestic demand for hardwoods across all applications. Where the US market once swallowed 86% of all American hardwoods (in 1999), the local market (in 2018) accounted for just 56% of all hardwoods, with 26% now being re-routed and traded into China (up from just 0.4% in 1999).
As the world’s largest exporter of hardwood, the United States has offset declining local demand for hardwood with rapidly expanding trade in logs and lumber into global markets – not just through China but through India, the Middle East, Pakistan, South East Asia and Europe.
“People have moved to the cities, birth rates are falling, and housing speculation has cooled.”
Michael Snow, Executive Director of the American Hardwood Export Council, on the challenges faced by the Chinese economy over the next decade.
However, in his presentation, now available through the International Hardwood Council website, Mr Snow warned that Chinese housing demand, forecast to grow 8 million units per year from 2010 to 2019, would drop to just 4.6 million per year from next year – with Chinese demand for hardwood lumber cooling year-on-year from a 2017 peak of just under 2.5 million cubic metres.
- To learn more about the International Hardwood Conference and its impact on the global timber supply chain, click here to download all presentations.
