- Positive perspectives linked to the increase in the number of construction of wood dwellings.
- Growth led by Asia (despite the decrease in Chinese growth).
- Fiscal incentives in Europe (France, Germany...) for investment in the field.
- Depending on the state of the housing and construction market.
- Constraints imposed by environmental norms.
- A sector heavily exposed to climate conditions (storms, forest fires...)
Global market for wood pellets (millions of metric tons)
Wood consumption (industrial roundwood, sawnwood, wood-based panels and cardboard) for the North American and European markets saw a moderate growth in 2016. It was carried by the construction and housing sector, one of the primary outlets this sector.
On the other hand, there is sawnwood and panel consumption in the countries of the Commonwealth of Independent States (CIS). Consumption dropped by 4% in the context of the Russian embargo and a degraded conjecture.
In addition, currency volatility played an important role in the trade of forestry products. Wood product importations jumped by almost 10% in the United States in 2016, while exports diminished almost at the same pace, due to appreciation in the value of the American dollar. In the countries belonging to the CIS, a weakened rouble pushed exports toward record levels for all the major product categories. The Pulp and Paper sector continues to go through important structural changes. The growing use of electronic media and competitive constraints have led to a stagnation in consumption (0.2% between 2015 and 2016) and in paper production (-0.1%) on average in the United States, in Europe and in the EEC.
Global production for wood-based products will surpass its pre-crisis levels in 2017. In detail, paper production will always be in decline, while wood-energy production will remain vibrant.
In Europe, growth in global production in the paper industry stood at zero in 2016, but should slightly increase (by 0.5%) in 2017. In France, turnover in the paper and cardboard-making industries was stable in 2016, and should increase by 3% in 2017, according to Eurostat. Cardboard production drives this growth, in particular thanks to the momentum of sales over the internet. The production of pellets would be moderate in 2017 (0.6%, COFFI). Maintaining oil prices below $50 on average in 2016 slowed investment growth for granule pile equipment. If the European countries are the main global producers (more than 60% of production for 2016) and should remain that way in 2017, their offer level would not be able to cover demand in this zone. Europe should import 14 million cubic meters of granules in 2017, according to COFFI, representing 66% of their expected consumption. European companies in the wood sector have been growing in 2016, for example French company MOULINVEST, which specializes in bio-construction and wood energy in particular. This company cleared sales revenue which sharply increased over the year.
In the United States, cardboard production continued to decline in 2016, (-0.3%) and should continue to decrease in 2017, according to COFFI (-1%). On the other hand, wood granule production remains strong: it is expected to increase 4.6% in 2017, (6.3% in 2016).
Russia, which has a quarter of the planet's forestry resources (the world's largest forestry country), pursues investment projects seeking to provide more added value for its forestry products. We note however that Russian fibreboard production is 3 to 4 times lower than that of the United States and Europe. The UNECE predicts a growth rate for fibreboard production of 20% in Russia in 2016, and 14% in 2017.
The consumption of forestry products for countries in the UNECE (United Nations Economic Commission for Europe – Forestry and Industry Committee) should increase by an average of +1.1% in 2016 and +1.4% in 2017, according to the Committee for Forests and the Forestry Industry (COFFI). This growth must be driven by a strong drive for consumption of wood pellets used as fuel and in construction.
In Europe, the COFFI predicts an average increase in wood consumption by +1.6% in 2017 (compared to +3.0% in 2016). Despite a declining context, this growth is greater than that registered between 2011 and 2015 (+1.4% per year on average). In 2016, this strong growth always emerges from the consumer dynamic of granules in Europe (+4.8% compared with +6.3% in 2015) which usage is motivated by efforts to succeed as part of this energetic transition. But it has also been boosted by the growth in fibreboard panel consumption (+3.9%), used especially in construction projects. The residential construction market in Europe, and more specifically for new homes, profited from high demand in 2016, after a long period of sluggishness. After a very good year 2015, (+2.4% growth), and according to the European Construction Industry Federation, the growth from 2016 should increase to (+3.9%) and remain sustained in 2017. Spain and Italy once again produce at below pre-crisis levels, but that is not the case for France, Germany and the United Kingdom. Finally, demand for resinous wood should grow in Western Europe. The growth potential for consumption per capita is high, but right now it is further than that of mature markets (North America and Northern Europe).
In North America, Donald Trump's election reinforces uncertainty about U.S. growth in 2017. Nevertheless, according to Coface, the latter should increase to +1.8% in 2017, (compared with +1.6% in 2016 and 2.6% in 2015). In this context, growth in wood consumption for North America should be void in 2016 and can increase to +1% in 2017. The rate for the consumption of granules is expected to be 4% in 2017, while paper should continue to decline to -1.1% in 2017, (compared with -1% in 2016).
Japan, China and India remain in strategic markets for exporters of European wood. In India, rapid growth in the real estate sector encourages the market. Nevertheless, the modification of India's Central Bank prudential rules for the start of year 2016 should bring a tightening of credit access until the first half of 2017.
Last update : December 2016