• News

Sawn softwood imports continue to tumble

Latest trade data shows that despite the strength of domestic sawn softwood sales, imports continue to fall, albeit looking as though they may have reached the bottom of what has been a two year long slide. For the year-ended July 2017, imports of sawn softwood totaled 565,821 m3, down 7.6% on the prior year. However, the signal imports may have bottomed is that in July 2017, imports totaled 52,455 m3, up 4.8% on July 2016.

The chart, from FWPA’s soon to be launched new data dashboard, shows the experience since the beginning of 2010.

fig 33

After the incredible peaks of late 2015, imports backed off quite quickly, in part because of the Australian Dollar’s depreciation making imports more expensive. 

We can see in the chart below that sales of several grades have been declining quite sharply over the last three years. Note that the grades selected are those for which imports were above 5,000 m3 for any one of the years.

fig 34

The chart shows that the major grade – 4407.11.10.40, shown in orange and being untreated dressed sawn softwood in pine other than Radiata pine – has experienced very sharp import declines. Over the period depicted, the average rate of decline of what is essentially a commodity grade, has been 22.3%, or in total, 39.6%. For the year-ended July 2017, imports totaled 161,427 m3.

The other large volume grade – 4407.11.99.04, shown in light green is the equivalent undressed or roughsawn product, other than Radiata pine. The decline in imports for this grade has been an average 9.8% per annum since July 2015 and a total 18.7% over that period. Imports totaled 128,382 m3 for the year-ended July 2017.

Drilling into the main volume of imports, we can see that despite the overall declines, the Estonians have grown their position, mainly at the expense of Austrian, Finnish and Swedish suppliers.

fig 35

Estonian producers delivered 77,176 m3 of the dressed sawn softwood in the year-ended July 2017, a rise of 15.8% on the prior year. Meanwhile, the Austrian supply slumped 55.9% to 9,661 m3, the Finnish supply declined 14.4% to 16,911 m3 and the Swedes were similarly disrupted, with their imports collapsing 72.3% to 15,359 m3.

The other country to experience growth was Lithuania, its supplies grew 29.4% to 34,588 m3 over the same period.

What this data demonstrates is that the decline in imports of dressed sawn softwood has also churned the suppliers, towards the lower cost European producers, and away from the traditional suppliers.

If sawn softwood imports rebound at some point in the future, there is no guarantee the traditional suppliers will be able to re-enter the market.

 

Posted Date: October 3, 2017

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