UN/ECE TIMBER COMMITTEE

Chapter 1

Highlights

• ECE region forest products consumption increased in 1997, in some cases to record levels.
• European sawn softwood markets, both within Europe and export, increasingly to Japan, were strong in 1997.
• North American housing construction and furnishing drew increased quantities of sawnwood and wood-based panels.
• Globalization of forest products markets was demonstrated in late 1997 and in 1998 as the economic crisis in Asia disrupted trade with the ECE region.
• European consumption of wood-based panels, mainly particleboard, increased close to North American levels, which are increasingly made up of OSB and MDF.
• Oversupply of some forest products in the ECE region has weakened prices.
• Some initial signs point to a slowdown in the decline of forest products markets in the Russian Federation.

A number of new and continuing trends are shaping the ECE region forest products markets, e.g. new markets for certified forest products, increasing substitution by engineered wood products for solid wood, and corporate restructuring.

Chapter 2  

2.1.General economic developments

1. Economic developments in 1997
2. Diverging performance and increasing instability: the global context in summer 1998
3. Economic crisis in East Asia
4. The short-term outlook for western  Europe and North America
5. The transition economies: economic pattern in the first half of 1998

1. The construction sector in Europe and the CIS 
2. The construction sector in North America
3. The construction sector in Japan

Highlights

• 1997 saw strong economic growth in Europe and North America.  Good growth conditions are expected to continue in 1998.
• Perhaps 1997 was the year when the Russian economy stopped contracting and started to expand. 
• Growth was satisfactory for many countries in transition, but negative or weak for others, notably in south-east Europe and central Asia.
• A major economic, financial and currency crisis affected Asia, with Japan in deep recession in mid 1998.
• New residential construction continues to stagnate in many European countries, but renovation is still growing strongly.  United States housing starts remain at a rather high level.  The Japanese construction sector plunged into recession in April 1997 and has not yet recovered.
• European furniture production fell slightly in 1997, but a small increase is forecast for 1998.

Chapter 3  

3.1 Introduction

3.2 Forest certification schemes

1. American Forest & Paper Association's Sustainable Forestry Initiative
2. Canadian Standards Association's Sustainable Forest Management System Standards
3.  International Organization for Standardization 14001 and 14061
4. Forest Stewardship Council

1. Marketing the environment 
2. Market access 
3. Image
4. Credibility
5. Premiums
6. Networking and improved marketing 

1. Supply developments

1. Buyers' groups 
2. Other sources of demand

1. Limited market demand 
2. Lack of supply
3. Limited industry involvement
4. Difficulty with premiums
5. Fragmentation and specificity of market demand

3.8 Literature cited

Highlights

• There are several active certification schemes in the ECE region and many more under development.
• The only third-party, performance-based scheme with products apparent in the marketplace is that from the Forest Stewardship Council.
• Offering certified products can increase access to markets.
• There appears to be little consistency in the ability to gain premiums.
• The majority of Forest Stewardship Council certified forestland is in Poland, Sweden, and the United States.
• Forest Stewardship Council certified land area has more than doubled during the past year to approximately 10 million hectares by June 30, 1998.
• Most demand for certified products is from a growing number of buyers' groups.
• A true picture of the marketplace is difficult to construct due to lack of statistics.
• Final consumers are not currently a significant influence in the marketplace.
• The industry trading in certified products is underdeveloped with key gaps in its infrastructure.

Chapter 4 

4.1 Global impact

4.2 Specific impacts on the ECE region

4.3 Impacts on the radiata pine trade and other forest products

4.4 Japan's forest products production and trade

1. Introduction
2. Sawnwood production and imports
3. Log imports
4. Plywood production and imports

4.6 Future

Highlights

• The Asian crisis is being felt worldwide, in many sectors, including the ECE region's forest and forest industry sector.
• The entire forest and forest products sector has felt the shocks and by necessity, made initial strategic adjustments.
• Industries dependent on Asian trade have found alternative markets and cut production.
• Structural changes in economic systems must precede recovery in forest products markets.
• Reduced forest products exports to Asia have created oversupplies and in some cases forced prices down.
• European sawnwood exports made up 17% of Japan's sawnwood imports in 1997, but in mid 1998, market share growth stalled with the downturn in demand.

Chapter 5 

5.1 Developments in Europe

5.2 Developments in North America and around the Pacific

5.3 Developments in Russia
 

Highlights

• European removals of roundwood rose in 1997 in accordance with higher demand from processing industries.
• United States removals fell slightly as logs normally exported to Asia were consumed in domestic markets.
• Roundwood removals in Russia sank to new lows, but exports recovered to near 1995 levels.
• Baltic exports of roundwood to Finland and Sweden continued to grow strongly.
• Roundwood markets in Asia, notably Japanese imports, fell sharply in 1997 and the first half of 1998, causing major shifts in the pattern of roundwood trade in the Pacific region.

Chapter 6 

6.1 Consumption

6.2 Production

6.3 Trade

6.4 North American developments

6.5 European developments

6.6 Russian Federation developments
 

Highlights

• European and North American consumption and trade move to record levels in 1997.
• Russian Federation production and exports decrease again.
• Baltic Countries continue to gain market share in Europe.
• Sawnwood prices continue cyclical trends and move up again in 1998 in Europe.
• Falling Asian demand threatens both new and established sawnwood trade channels.
• First exports of certified sawnwood occur in ECE region.

Chapter 7 

7.1 Consumption

7.2 Production

7.3 Trade--temperate zone

7.4 Trade--tropical zone

1. Consumption of tropical forest products by "consumer" countries
2. Imports of tropical forest products by "consumer" countries
3. Exports of tropical forest products by "producer" countries
4. Production of tropical forest products by "producer" countries
5. Apparent consumption of tropical forest products by "producer" countries
6. Tropical log trade
7. Tropical plywood trade
8. Tropical sawnwood trade
9. Trade in secondary processed wood products

Highlights

• Perhaps ending the long downward slide, European consumption of sawn hardwood rose slightly in 1997, due to increased imports.
• United States sawn hardwood consumption continued to climb in 1997 due to record production levels.
• United States sawn hardwood exports increased strongly in 1997 to both Europe and Asia.
• European imports of primary tropical products has been falling, but it reversed the trend in 1997.
• When secondary tropical forest products are added to the values of primary products, Europe and the United States become major importers.
• Since 1997, the Asian crisis drove down prices of some primary tropical products, by as much as half, by mid 1998.
• The Asian crisis was having a profound effect on the whole hardwood trade in 1998.

Chapter 8

8.1 Overview

8.2 Particle board

8.3 Oriented strand board

8.4 Plywood

8.5 Hardwood plywood

8.6 Fibreboard

8.7 Medium density fibreboard

Highlights

• European consumption of wood-based panels, mainly particle board, increased in 1997 to record levels. 
• In North America, consumption expanded slightly in 1997 at a much slower pace than in 1996.
• In the Russian Federation wood-based panels consumption has declined sharply by 70% since 1992, but thanks to active export markets, production showed an upturn in 1997. 
• Production of OSB continued to increase in North America;  as OSB capacity expands faster than demand the result has been a steep fall in prices.
• United States apparent consumption of plywood fell as a result of major production decreases and rapid substitution by OSB. 
• During 1997 developments in the tropical hardwood plywood sector have been dominated by the Asian crisis.
• Apparent consumption of MDF in Europe was 0.94 million m3 higher than in 1996

Chapter 9 

9.1 Paper and paperboard

9.2 Woodpulp

9.3 Pulpwood

Highlights

• Consumption and production of paper and paperboard grew strongly in 1997 and early 1998, except for Japan.
• Pulp production also rose in 1997, but the market was weakened by rising stocks.  Market pulp prices rose moderately.
• Record volumes of pulpwood were consumed in 1997 in Europe and North America.
• Removals of pulpwood rose moderately, while imports increased rather faster.  The trade between the Baltic and Nordic countries represents the largest single flow in Europe.
• In 1997, pulpwood prices ceased to fall everywhere.  They rose steadily in 1997 and 1998 in several countries, but not in all.

Annex tables

1. Sawn softwood, Apparent consumption
2. Sawn hardwood, Apparent consumption
3. Particle board, Apparent consumption
4. Plywood, Apparent consumption
5. Fibreboard, Apparent consumption