China has long been a country coping with the formidable challenges of deforestation and desertification. As a result of the Natural Forest Protection Program, which restricts timber production from natural forests, and a tree plantation program, the country has regained some forest cover in recent years – but the challenges it faces are still serious.

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After the particleboard and MDF boom of earlier years, OSB production is gaining momentum in the Southeast Asian wood-based panel market. Confirming this trend is the first continuous OSB plant in Thailand, being constructed for the Vanachai Group, one of the leading Asian particleboard and MDF manufacturers.

As part of the plant, Vanachai has ordered from Dieffenbacher a 32-meter long, 6-meter diameter drum dryer, a wet strand bin and automation of the front-end from the debarker to the strander.

In the past five years, Dieffenbacher has sold nearly 30 drum dryers worldwide. With three particleboard and two OSB dryers, Southeast Asia accounts for five of these orders, making Dieffenbacher the sole supplier of drum dryers to every OSB plant in the region.

 

Image: Project meeting in Bangkok. From left to right: Holger Ries (Sales Manager, Dieffenbacher), Phumsakdi Chullavallibha (Assistant Managing Director, Vanachai), Apichai Boonsawang (Project Engineer, Vanachai), Pitsanupong Ruxpakawong (Project Engineer, Vanachai), Alexander Hoffmann (Managing Director, Maier).

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The recent run on lumber prices has put big smiles on the faces of sawmill operators and lumber traders. 

Mill prices for all lumber species in North America have been trending higher since preliminary U.S. import duties began in February 2017, and especially after permanent duties (averaging 20.2 per cent) started in late December. While the implementation of U.S. import duties on Canadian lumber was expected to push prices up somewhat, the interaction of several factors — the seasonal impact of summer forest fires in 2017, severe winter weather followed by railcar shortages in 2018, and continued strong demand in export markets — has created an almost perfect storm. 

As a result, record-high lumber prices have been achieved in June for all species before deducting Canadian import duties on U.S. shipments. In addition, record prices have been seen in such other markets as Japan. One of the major exceptions, however, has been in studs: U.S. prices have languished in comparison to dimension lumber but they also hit record levels.

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During the first half of the year, the European Pallet Association (EPAL) significantly expanded its activities in Asia compared to the previous year. According to Xiaowei An, EPAL representative for Asia, the number of pallets produced or repaired under EPAL licenses in the region increased by 45% year-on-year to approximately 700,000 units.

Currently 79 EPAL licences are granted in Asia, 74 of them in China, two each in Indonesia and India and one in South Korea. According to An, EPAL is currently in the process of significantly expanding its service network in China. The regional focus is on the coastal provinces and the provinces of Hebei, Shanxi, Henan and Anhui.

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Framing lumber trading hit its fastest stride in more than two months, and the market finished the week with a firm tone. Wildfires in Western Canada and the West were a catalyst sparking sales, firming mill quotes, and lifting futures prices in last week.

Structural panel prices posted moderate gains amid slower trading. Prices of OSB continued to trend higher in most regions, although the pace of sales moderated. Western Canada was among the most active regions. Southern Pine plywood prices pushed higher throughout the week amid steady sales. Buyers covered their most pressing needs last week at a more frenetic pace, but many returned this week to bolster inventories. In western Fir plywood, a sales turnaround evident last week carried through.

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Novopan del Ecuador, the leading producer of medium density particleboard (MDP) in Ecuador, will increase its production capacity in Quito with a new plant from Dieffenbacher. 

The scope of supply includes a forming station with conveyor system that begins at the glue blenders, a forming line with prepress, an 8 ft wide by 20.5 meters-long CPS+ press system, a raw board handling system and a stack and transfer system.

Dieffenbacher subsidiary Maier will contribute its wood yard and chipping technology. Novopan has ordered the storage cross chain and rectifying conveyor for feeding of logs as well as a chain bed conveyor for loading slab bundles, which is followed by a special cleaning section. Maier will also deliver a vibration dosing table to be loaded with short-piece wood assortments; a drum chipper feeding belt conveyor with metal detector; and waste belt conveyors. The key machine for the new chipping line is a Maier Drum Chipper HRL 1600 with a clamping plate rotor. Three MRZ 1400 knife ring flakers with FlowOptimizer complete Maier´s scope of supply for the wood chip and wet flake preparation.

“We are happy to work with Dieffenbacher once again,” said Cesar Alvarez, CEO of Novopan del Ecuador, at the contract signing in December 2017. “With our existing plant, Dieffenbacher proved they can help us produce high-quality panels very efficiently. That’s why we trust Dieffenbacher will be the right partner for our new production line, too.”

Novopan’s current MDP plant in Quito produces up to 1,000 m³ MDP per day. In 2010 and 2013, Dieffenbacher modifications to the forming station and an extension of the raw board handling system helped to expand plant capacity from 400 m³ per day. “In 2014 and 2015, we installed a new prepress and EVOjet P glue-saving system from Dieffenbacher to increase plant efficiency,” added Alvarez.

Dieffenbacher began working with Novopan following the delivery by Metso of most of the original plant’s production line components. Metso sold its wood-based panel business to Dieffenbacher in 2008. Ever since, Dieffenbacher has serviced the original Quito plant.

The latest Novopan plant is Dieffenbacher’s sixth new plant project in Latin America in four years. Other projects include three plants in Mexico and two in Brazil. Numerous modernization projects, mostly the addition of EVOjet M, EVOjet P and PROjet gluing systems—all enabling significant glue savings, are also helping Latin America customers operate more efficiently. 

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According to SCOOP Business, New Zealand structural log prices rose to the highest level for 25 years as local mills compete with the export market to secure supply for the domestic construction market amid strong demand from China.

The average price for structural S1 logs increased to $135 a tonne this month, from $134 a tonne last month, and marking the highest level since 1993, according to AgriHQ's monthly survey of exporters, forest owners and saw millers. The average price for New Zealand A-grade export logs hit a four-year high of US$145/JAS from US$144/JAS last month, and US$132/JAS a year ago.

In New Zealand, sawmills are competing with the export market to source logs for local construction, at a time when demand in China has stepped up after Asia's largest economy clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market.

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New orders for furniture registered their biggest year-over-year increase in April, jumping 15 percent compared with April 2017, according to the latest Furniture Insights survey.

“We felt like business had picked up some going into the High Point Market but did not expect that kind of result,” said Ken Smith, partner at High Point accounting and consulting firm Smith Leonard, which conducts the monthly survey of residential furniture manufacturers and distributors. 

“One factor that likely had an impact was that the market was one week earlier this year, leaving more time for market orders to come in before month end. In addition, we did hear that there was more order writing this market than usual.”

A big order month in April – with 79 percent of survey participants reporting increases and several who were off pace down only a half or single percentage point – came on the heels of only 42 percent reporting increases in March.

With the large April increase, year-to-date new orders were up 6 percent over the first four months of 2017.

April shipments rose 10 percent compared with April 2017, when they were only up two percent over April 2016. March 2018 shipments were also only up 2 percent over March 2017. Year to date, shipments were up 3 percent over the same period a year ago. In the first quarter, shipments were only up 1 percent over the first quarter of 2017.

The jump in April orders led to a 6 percent increase in backlogs compared with March and 6 percent higher than April 2017.

Smith also noted that while housing starts are improving and new home sales have continued to pick up, “existing home sales are struggling with low inventories, higher prices and higher interest rates. We need people to be moving in these summer months to generate furniture sales.”

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Rising costs of lumber imported into the country could have an effect on home prices, especially in fast growing Hays County, News and Sports Editor, MOSES LEOS III reports.

While such an impact wouldn’t be felt in Central Texas for several months or more, Buda real estate salesperson J.D. Sanford believes consistent increases over time could lead to instability in the housing market.

According to a June 2018 New York Times article, tariffs imposed on lumber imported from Canada to the United States, along with supply and demand, as well as ecological factors, have played a role in the rise of home costs in the country.

Sanford said a rise in wood cost would be an “unnatural or inorganic” way to increase the price of home values.

In the Central Texas area, for example, increasing population pressures have led to a rapid rise in home values over the past decade. In Hays County, the average market value for homes rose by 7.1 percent from 2017 to 2018, while commercial and industrial value rose by nearly 13 percent, according to the Hays County Central Appraisal District.

The cause of that increase in the overall value was due to the 2,600-plus new homes and 83 new commercial units built in the area.

However, an increase in material could, in turn, lead to a rise in the cost of building homes. That could lead to instability in the housing market, Sanford said.

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On February 7, 2018, Chinese wood-based panel manufacturer Anhui Huaining County Kelin Wood Industry Co. Ltd. produced the first board on its new Dieffenbacher particleboard plant. Acceptance of the plant took place on May 4, two months prior to the contractually agreed date.

 

"The smooth installation and commissioning by Dieffenbacher enabled us to start full-load production significantly earlier than planned,” said Anhui Kelin chairman Zhu Jiake. "This early acceptance is a prime example of the good cooperation between Anhui Kelin and Dieffenbacher," added Dieffenbacher project manager Stefan Hellmich.

 

The new plant in Anqing, in the Chinese province of Anhui, is designed to produce almost 1,000 m³ of particleboard per day. It produces boards with a width of 2,100 to 2,480 mm and a thickness of 6 to 38 mm.

 

   

Image: Anhui Kelin's new particleboard plant in Anqing, China.

 

Markus Trame 

Marketing Consultant

Tel.+49 72 62 65-7931

This email address is being protected from spambots. You need JavaScript enabled to view it.

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