| ¡¡ Minor changes in veneer HTS Classification
There have been some slight changes to the US Harmonized Tariff Schedule (HTS) found in
the HTS Supplement 1 effective 1 July 2006. The HTS is updated every six months in January
and in July. In January 2007, some reclassifications at the HTS six-digit level will be
enacted after amending by the World Trade Organization. A preview of those changes can be
seen at www.usitc.gov/tata/hts/other/rel_doc/fr/index.htm,Appendix B of Chapter 44. Also
in early 2007, the US Congress will begin its five-year review of duties and tariffs of
HTS codes.
European suppliers retreat from US lumber market
European softwood lumber producers have retreated from the US market, arguing lower prices
and the euro¡¯s continued strength against the US dollar, according to Random
Lengths. Robust demand within Europe has also contributed to the trend, as many European
suppliers have focused increasingly on taking advantage of stronger returns in domestic
markets, notably in Germany. Part-time European suppliers have withdrawn entirely
while larger suppliers have limited shipments to filling contracts. Some European
producers reportedly plan to cut shipments 25-40% in coming months.
Exchange rates also have contributed to a decline in US imports from Brazil, which are
down 21% through April compared to the first quarter in 2005. Brazil has been losing
market share in 2006 due also to higher domestic log costs. Chile has filled some of the
gap, with export volume rising 14% through April.
USA denies Brazil´s petition for duty-free plywood
The office of the US Trade Representative (USTR) announced that pursuant to a federal
ruling in late June 2006 denying a petition from Brazil, US imports of certain southern
yellow pine plywood from Brazil (HTS 4412.19.40) will continue to be subject to an 8% duty
in effect since July 2005.
In 2004, Brazil supplied 52% of all US imported softwood plywood, measured by value,
surpassing the Generalized System of Preferences¡¯ (GSP) competitive-need
limitation and triggering the duty. That percentage rose to 54% in 2005. But through April
2006, Brazil¡¯s share of imports by value dipped to 47% (61% by volume).
Analysts think that the duty, the weak US dollar, higher log costs in Brazil and the crack
down on illegal logging will weigh on Brazil¡¯s plywood exports to the US for
the reminder of 2006.
Renewal of US GSP in jeopardy
Opposition by key Capitol Hill chairmen to renewing the General System of
Preferences (GSP) continues after Doha Round talks between WTO trade ministers ended 1
July in a stalemate, IWPA informed. Senate Finance Committee Chairman Charles Grassley
(R-IA) and House Ways and Means Committee Chairman Bill Thomas (R-CA) have been using the
threat of nonrenewal to force good faith negotiations from large developing countries such
as India and Brazil. GSP will expire on 31 December 2006 and its expiration will mean the
end of duty-free imports from selected developing countries.
US plywood imports - Part II
This is the second part of an analysis o imports. This article focuses on tropical plywood
(HS 441213) or any plywood with at least one outer layer of tropical wood. In fact, most
imported tropical plywood has an inner core of non-tropical plies, such as birch,walnut,
cedar and other non-tropical woods. But it excludes veneered panels with a core of MDF,
particleboard, hardboard or a similar substrate.
About 3.34% of 5.33 million m3 of the US imports of tropical plywood is meranti, white
lauan, sipo, limba and similar species (¡¡ămeranti et. al.¡¡À). Another 0.74%
is mahogany plywood while the remaining 96% is a wide variety of different tropical
species not specified in the US Foreign Agricultural Service (FAS) statistics.
The share of mahogany plywood used to be twice as high earlier this decade and ranked
above meranti et. al. In fact, US mahogany plywood imports fell 29% from 15,032 m3 ($7.94
million) in 2001 to 10,689 m3 ($5.55 million) in 2005. Brazil was the most important
source of mahogany plywood with 5,711 m3 ($2.19 million) and at an average price of $383.8
per m3. Canada followed with 3,527 m3 ($2.48 million) of higher added-value mahogany
plywood with an average price of $702.3 per m3. China was a distant third but its mahogany
plywood exports to the USA are growing at above average rate.
All other US tropical plywood imports experienced a growing trend between 2001 and 2005,
both in volume and value. This was particular the case of meranti et. al. imports, whose
volume and value went up by 136% and 228%, respectively. During this period, the share of
meranti et. al. doubled to 3.34%. However, meranti et. al. plywood has lost some ground
both its volume and value in early 2006.
Almost two-thirds of all US meranti et. al. plywood imports (29,782 m3) came from China
in 2005 and this share continues to grow rapidly. However, since Chinese meranti et. al.
plywood is relatively inexpensive (average $232.9 per m3), its value ($6.94 million)
accounted for only 41.3% of all US meranti et. al. imports. About one quarter of US
meranti et. al. plywood imports (10,066 m3 worth $3.96 million in 2005) came from Brazil.
Taiwan PoC is an insignificant supplier of meranti et. al. plywood in terms of volume
(2,191 m3 in 2005) but its above average price ($1,887.3 per m3) placed it second after
China in import value ($4.14 million).
There are considerable price differences between the various tropical plywood products.
The average price for meranti et. al. plywood rose 38.9% from $250.9 per m3 in 2001 to
$348.5 per m3 in 2005, but has declined during the first few months of this year. In
contrast, average prices of mahogany plywood fell slightly (1.7%) from $528.2 per m3 in
2001 to $519.3 per m3 in 2005. The price decline accelerated in 2006. Nevertheless,
mahogany plywood still claims a considerable price premium (approximately 50%) over other
product categories, but it is generally subject to quite erratic price fluctuations.
The average import price in the USA for all other (combined) tropical plywood products
(except mahogany and meranti et. al.) surged 27% from $282.4 per m3 in 2001 to $358.7 per
m3 in 2005. Prices for these plywood products have eased slightly so far this year.
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