North American Lumber Market

16-30th June 2006

While separate limits were established for different composite wood products, hardwood plywood’s formaldehyde emissions would be capped at 0.09ppm (parts per million) effective 1 July 2008 and decreased to 0.03ppm by 1 July 2010. IWPA indicated that the proposed levels are significantly below any existing emissions standards for hardwood plywood (including
HUDs 0.30ppm standard). In addition, ATCM requires compliance testing, third-party certification and imposes new product labeling requirements for manufacturers. Importers are specifically identified in the proposed rule and requested additional record-keeping requirements.

ATCM covers particleboard, MDF, hardwood plywood and finished products made from these materials, inclusive of cabinets and furniture no matter where manufactured or imported.

US plywood imports – Part I
This is the first part of an analysis of US plywood imports from 2001 to February 2006. This article overviews all US plywood imports classified under HS 441213 (plywood, outer ply of tropical hardwood, ply<6mm), 41214 (plywood, outer ply of non-conifer wood n.e.s. ply<6mm) and 441219 (plywood, all softwood, each ply<6mm). The next two articles will focus on tropical plywood (HS 441213). Excluded are veneered panels with a core of MDF, particleboard, hardboard or a similar substrate.

The USA imported 5.3 million m3 of plywood worth $1.79 billion in 2005, with an average price of $336.1 per m3. Between 2001 and 2005, the quantity of American plywood imports increased by 106%. As average prices rose 8.3% during that period, the value of plywood imports climbed 123%.

In the previous decade, about half of US total plywood import volume were tropical woods. However, due to growing concerns about endangered tropical species, this share declined from 42% in 2001 to 27% (29% of the import value) in 2005. The bulk of imports volume was accounted for by softwood plywood with 39.4% (31.6% of the import value), followed by hardwood with 33.4% (39.4% of the import value). The average price of imported hardwood plywood exceeded the average prices of both, tropical and softwood plywood. In 2005, hardwood plywood was priced at $396 per m3 compared with $360 and $269 per m3 for tropical and softwood plywood. That explains why hardwood plywood accounts for the largest share of the total import value.

Between 2001 and 2005, there were some noticeable changes in US plywood imports. Prices of imported hardwood and softwood plywood increased moderately (about 6%) while those of tropical plywood went up steeply (26%) during the same period. Prices for tropical plywood, however, fell slightly (-5.6%) between February 2005 and February 2006. The fast price escalation of tropical plywood till 2005 was partially responsible for the sluggish growth of US imports of this product which surged only 35% in volume but 70% in value, compared with 93% and 103% for hardwood and 257% and 283% for softwood, respectively.

On a volume basis, the most important plywood suppliers to the USA are Brazil with 1.6 million m3 (market share of 30.4%), followed by China with 1.3 million m3 (share of 24.2%). On a value basis, China is ahead of Brazil with $421 million (share of 23.5%) as Chinese products are priced higher on average, while Brazil supplied $394 million (share of 22%). China’s exports of plywood to the USA have been growing at a phenomenal rate, increasing by approximately 1,400% (on a volume and value basis) between 2001 and 2005. China is expected to secure the first position in 2006, both on a volume and value basis. Some 80% of Brazilian plywood exports to the USA is softwood plywood. In the case of China, softwood plywood accounted for less than 3% while tropical plywood accounted for 30% and temperate hardwood plywood accounted for about two-thirds of the total.

Canada follows as US third largest plywood supplier with 700,000 m3 worth $3.1 million in 2005 (market shares of 13.4% and 17.5%, respectively). Canada has been loosing market share in the period under review as its growth rate was far below average (4.6% for volume and 26.8% for value). Well over half of Canada’s plywood exports to the USA is softwood and less than 3% is re-exported tropical plywood. Brazil, China, and Canada account for a combined market share of about two-thirds. Other suppliers include Malaysia, Indonesia, Russia, Chile, Ecuador, Finland and Taiwan PoC. The three top suppliers of tropical plywood to the USA (Malaysia, Indonesia and China) account for a combined share of over 80%. Other tropical plywood suppliers include Brazil, Canada, the Philippines, Ecuador, Taiwan PoC and Guatemala. The top suppliers of temperate hardwood plywood to the USA are China, Russia and Canada with a combined share of over 80% of USA’s total hardwood plywood imports.

Abbreviations

LM        Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS         Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR            French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down