{"id":83256,"date":"2022-11-20T10:29:07","date_gmt":"2022-11-20T10:29:07","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/emerging-hardwood-market-challenges-opportunities-europe\/"},"modified":"2025-09-19T08:58:56","modified_gmt":"2025-09-19T08:58:56","slug":"emerging-hardwood-market-challenges-opportunities-europe","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/emerging-hardwood-market-challenges-opportunities-europe\/","title":{"rendered":"Emerging hardwood market challenges and opportunities in Europe"},"content":{"rendered":"
\n

The sawn hardwood trade in Europe experienced a period of unprecedented demand and good margins in 2021 and the first half of 2022. Growing recognition of the environmental benefits of hardwoods, particularly with a rising focus on zero carbon commitments, also implies strong long term prospects for hardwood products in the region.<\/p>\n

However short-term market prospects are clouded with uncertainty against the background of sharply rising inflation and declining business and consumer confidence.<\/p>\n

There are also serious concerns about long-term supply, particularly of oak, due to the volatile geopolitical situation, impact of climate change on European forests, and rising log exports to other regions.<\/p>\n

These are the main insights from the International Hardwood Conference held on 28th of October in Lyon, France, and organised by the French National Wood Federation (FNB), the European Organisation of the Sawmill Industry (EOS) and the European Timber Trade Federation (ETTF). This event gathered around 100 industrialists, traders, and experts of the sectors to discuss market trends, with a focus on the shortage of raw material availability and impact of skyrocketing energy costs for hardwood industries in Europe.<\/p>\n

Maria Kiefer-Polz, President of the Hardwood section, presented the point of view of European hardwood producers. The EOS Hardwood members expect a sawnwood production decline of at least 3% this year following a double-digit increase in 2021. After a good 2021 and a bright first half of the year 2022, demand has slowed over the last few months and production has adapted to weakening sales, both in home European markets and in overseas markets.<\/span><\/p>\n

The situation at present is quite challenging with high energy prices taking a toll on the industry, particularly in the more energy-intensive beech sector. Hampered by high inflation and increasing mortgage rates, demand from European consumers is now much weaker. Stocks at sawmills are high and many producers expect a difficult few months ahead. Lack of labour is also reported by many countries.<\/p>\n

According to Ms. Kiefer-Polz, this challenging situation is compounded for European sawmills by increasing export of oak logs, particularly to China. Exports of European oak logs to China have been increasing for many years and that China\u2019s appetite for European oak sawlogs continues to grow. This is particularly the case now that Russia has implemented a log export ban, increasing China\u2019s reliance on imports from Europe.<\/p>\n

Of China\u2019s total imports of oak logs of 1.35M cu.m in 2021, 52% derived from the EU. China\u2019s imports of oak logs from the EU increased from 561,000 cu.m in 2020 to 702,000 cu.m in 2021. Imports from EU in the first nine of this year were 689,000 cu.m, a 30% increase on the same period in 2021. So far this year, over two thirds of total Chinese imports of oak logs have been sourced from the EU.<\/p>\n

Ms. Kiefer-Polz suggested that the current level of oak log exports from Europe is unsustainable. As a result EOS together with the European Furniture Confederation (EFIC), the European Panel Federation (EPF), the Italian umbrella association Federlegno , and the European Parquet Federation (FEP) have joined forces to form a coalition with the advice of a legal study to consider options to reduce oak log exports.<\/p>\n

The coalition is working with DG Trade of the European Commission. However, according to Ms. Kiefer-Polz the EC is reluctant to put in place any formal trade restrictions for several reasons. First, there is concern about a risk of retaliation as China could impose measures in response to such action by the EU. Second, the EU has itself challenged at the WTO and in bilateral discussions log export bans introduced by many neighbouring countries. If the EU put in place a similar log export ban, that would be inconsistent with its own actions on this issue.<\/p>\n

DG Trade has also pointed out that the rise in European log exports is a market outcome that, while bad for the European woodworking industry, is good for forest owners. By selling into a large global market, European forest owners achieve better prices for their logs. For these various reasons, EC DG Trade are advising the European woodworking sector to negotiate and find solutions locally with forest owners, according to Ms. Kiefer-Polz.<\/p>\n

The presentation by Aymeric Albert of the French Forestry Office (ONF), which focused on the impact of climate change on French hardwood resources, strongly implied that rising log exports and obstacles due to the war in Ukraine are not the only reasons for declining hardwood log availability in Europe. There are also major long-term changes in the forest resource driven largely by climate change that imply long term reductions in hardwood log availability in some parts of Europe.<\/p>\n

The figures provided by Mr. Albert on declining availability of good quality logs in France were startling. During the five year period between 2017 and 2021, the total harvest volume of healthy hardwood trees in French forests fell from 7.8M cu.m to 6.6M cu.m, while harvest volume of sanitary products increased from 433,000 cu.m to 1.41M cu.m.<\/p>\n

The damage to hardwood stands is largely attributed to climate change, which is driving drought conditions that stress trees, making them more vulnerable to insect damage and leading to more frequent wildfires.<\/p>\n

The volume of oaks designated for harvest in French public forests decreased from 2.1M cu.m at the end of 2017 to 1.8M cu.m in October 2022. In contrast the volume of dying oaks increased from 170,000 cu.m to 330,000 cu.m in the same period. Similarly for beech, the total volume designated for harvest in public forests decreased from 2.9M cu.m at the end of 2017 to 2.5M cu.m in October 2022 while the volume of dying beech increased from 155,000 cu.m to 580,000 cu.m in the same period.<\/p>\n

For hardwood species other than oak and beech, Mr. Albert explained that the level of die-back had strongly increased through successive droughts, rising from 283,000 cu.m in 2018 to 602 000 cu.m in 2021. Hardwood species such as ash are dying from a fungal disease of the same nature as Dutch Elm disease so they\u2019re expecting a complete die-back within the next ten years.<\/p>\n

On future prospects Mr. Albert said that the total hardwood harvest in France will remain \u201ccautious\u201d and that French forest policy is now focused on efforts to increase stand stability over time. The aim is to rely where possible on enhanced natural regeneration, while introducing new species or new provenances to increase forest resilience where necessary. He closed by saying that a decline in the availability of wood from French forests, both in terms in quantity and quality, will become the norm and the wood sector must adapt to it.<\/p>\n

With domestic hardwood supplies under pressure and strong demand on the consumer side, Ad Wesselink, Hardwood President of the European Timber Trade Federation noted that European imports of sawn hardwood were rising in 2021 and the first half of 2022. EU27+UK imports of sawn hardwood were up 6% at 1.15 million cu.m in the first 6 months of this year, after rising 13% to 2.2 million cu.m the previous year. There has been particularly strong growth in imports of sawn tropical hardwood.<\/p>\n

At the same time, Mr. Wesselink stated that about 22,000 tons of oak is missing from the EU27+UK market due to cessation of imports from Russia and Belarus. This combined with increased logistical and energy costs has led to sharply increasing prices. On the bright side, Mr. Wesselink echoed Ms. Kiefer-Polz in stressing the undeniable recognition of wood as an environmentally friendly construction product. Increased market share for wood might help compensate the expected slowdown in the construction market.<\/p>\n

Michael Snow, presenting from the vantage point of North American producers, reported a slowdown in economic growth in China, with a housing market that is rapidly declining having a direct impact also on the selling of furniture. Mr. Snow commented as well that the new deforestation free products Regulation, discussed right now at EU level, if introduced in its current form, \u201cwould effectively eliminate American Hardwood from the EU markets, due to extreme challenges of implementing the geolocation requirement in those situations where forests are both highly diverse and in the hands of numerous smallholders\u201d.<\/p>\n

While AHEC is very supportive of this new EU legislation, since it targets agricultural products which are by far the main drivers of deforestation, it is advocating that the geolocation definition be adjusted in the final legislation. According to Mr. Snow, products should be identified to a specific low risk jurisdiction, rather than to an individual real-estate property which is the current requirement, when dealing with diverse hardwoods from smallholders.<\/p>\n

James Xu showed that neither the US nor Europe is the leading hardwood lumber exporter to China because other regions took advantage: China now imports large volumes of wood from Russia and Thailand due to lower costs. At the same time, Mr. Xu, stressed that not only costs influence consumers\u2019 decisions, but \"fashion\" is also a key factor.<\/p>\n

Business opportunities might instead be found on the Indian market, as highlighted by Dr. Michael Adams: \"The Indian economy grew at a stunning 13,5% year on year in the second quarter of 2022. Growth prospects remain sound and the large companies are continuing to invest while the building material market is expected to grow in the coming 5-6 years\".<\/p>\n

The European parquet market, as presented by Mr. Lorenzo Onofri, was good in 2021 (+6.2% compared to the previous year) but already started to decline in 2022 reflecting decreasing consumer confidence (war, energy prices, and lack of affordable oak and birch plywood - mainly coming from Russia).<\/p>\n

The EU parquet producers (represented at EU level by FEP) alongside other associations, is calling for limits to be placed on oak log exports from the EU. Due to the lack of oak and birch plywood, the parquet industry is searching for new sustainable raw material substitutes, while they continue investing in the REAL WOOD initiative to convince the consumers to use real wood flooring and not artificial products that pretend to be made of wood. Sharing the same challenges of the parquet industries, the European furniture sector, as reported by Mr. De Jaeger, is expecting a further market slowdown in 2023 with increased challenges for raw material procurements and prices expected to increase.<\/p>\n

To conclude, as emphasized by most speakers, the hardwood industries can benefit from the positive environmental value of wood products as increasingly recognized by European policymakers and consumers alike.<\/p>\n

At the same time, the sector needs to find new markets and opportunities: some hardwood species are under-utilized, and forests will potentially supply more of the species which are \u2018minor\u2019 at present. In this sense, research and the development of standards for new applications of hardwood products will be key for the sector in the coming years.<\/p>\n<\/div>\n

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The sawn hardwood trade in Europe experienced a period of unprecedented demand and good margins in 2021 and the first half of 2022. 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