November 2019 EXPORT GROWTH OPPORTUNITIES Photos courtesy of Red Stag FOR NEW ZEALAND Timber, New Zealand; 1) aerial view of the company’s mill in Waipa (background); 2) logs being harvested (inset top); PROCESSED WOOD and 3) boards being produced in mill (inset bottom) A market review of selected products +64 27 430 2889 [email protected] getfea.com © 2019 Forest Economic Advisors, LLC. All contents copyrighted. All rights reserved. Table of contents BACKGROUND AND SCOPE . 1 EXECUTIVE SUMMARY . 2 Current & Potential Global Market Factors. .2 Key Wood Products .......................................................................................................3 New and Evolving/Expanding Wood Products. 5 CURRENT & POTENTIAL GLOBAL MARKET FACTORS . 6 Bark Beetles in Central Europe ..............................................................................................6 US–China Tariffs ..........................................................................................................7 Annual Allowable Cut (AAC) Impacts in British Columbia, Canada ................................................................9 Emergence of Russian Wood Processing. 10 Chinese Wooden Furniture Exports. 11 Timber Industrial Parks in China. .12 Australian Market for Softwood Lumber. 13 Indian Market for Softwood Lumber ........................................................................................15 TARGET WOOD PRODUCTS . 18 1 Lumber (Sawn Timber). 19 2 Medium-Density Fibreboard (MDF). .27 3 Particleboard .......................................................................................................34 4 Oriented Strand Board (OSB). .41 5 Plywood ...........................................................................................................46 6 Laminated Veneer Lumber (LVL). 53 7 Laminated Strand Lumber (LSL) .......................................................................................58 8 Parallel Strand Lumber (PSL) ..........................................................................................61 9 Cross-Laminated Timber (CLT) ........................................................................................63 10 Wood Pellets .......................................................................................................68 EXPORT POTENTIAL OF NEW PRODUCTS . 74 Structural Products. 75 Thermal Insulation Products ..............................................................................................80 Durability Products ......................................................................................................81 Biobased Fuel and Chemical Products ......................................................................................83 Other Technologies ......................................................................................................85 DISCLAIMER: Forest Economic Advisors does not take responsibility for the accuracy of the sources of this information. This report’s contents are intended to be general information only. i +64 27 430 2889 [email protected] getfea.com © 2019 Forest Economic Advisors, LLC. All contents copyrighted. All rights reserved. List of tables, graphs and figures Table 1 Summary of Key Information from the Wood Product Templates ..................................................................................................... 3 Table 2 Summary of NZ Wood Product Exports Showing Percentage to Oceania/Asia.................................................................................. 4 Table 3 Summary of Key Investor Opportunities and Constraints in NZ ......................................................................................................... 4 Table 4 Summary of New and Evolving/Expanding Wood Products .............................................................................................................. 5 Table 5 China: Tariffs Imposed on Softwood Logs and Lumber from the US — 2019 ..................................................................................... 8 Table 6 China: Softwood Lumber Imports from the US by Species ................................................................................................................. 8 Table 7 China Exports: 2018 vs. 2017 .............................................................................................................................................................. 11 Table 8 China: Wood Furniture Exports by Destination ................................................................................................................................. 11 Table 9 New Zealand Structural-Grade Use .................................................................................................................................................... 23 Table 10 Market Mix for MDF in the US and Canada ........................................................................................................................................ 30 Table 11 Market Mix for Particleboard in the US and Canada ......................................................................................................................... 37 Table 12 Market Mix for OSB in the US and Canada ......................................................................................................................................... 43 Table 13 Market Mix for Plywood in the US and Canada ................................................................................................................................. 49 Table 14 ENplus Premium Wood Pellet Requirements .................................................................................................................................... 70 Graph 1 Central Europe: Spruce Bark Beetle Attack .......................................................................................................................................... 7 Graph 2 BC Interior Coniferous Sawlog Availability Versus AAC (Shown as Mill Log Demand) ....................................................................... 9 Graph 3 Estimated Product Mix from Australian Sawmills.............................................................................................................................. 14 Graph 4 Australian Softwood Lumber Imports from North America/New Zealand ...................................................................................... 14 Graph 5 Australian Softwood Lumber Imports: From Europe ........................................................................................................................ 15 Graph 6 India Industrial Roundwood Imports from 2000 to 2018 .................................................................................................................. 15 Graph 7 India Hardwood and Softwood Lumber from 2000 to 2018 ............................................................................................................. 16 Graph 8 Forecast of India’s Imported Logs and Lumber Demand and Wood-Fibre Supply Gap8 ..................................................................17 Graph 9 Global Softwood Lumber Imports ...................................................................................................................................................... 21 Graph 10 New Zealand Softwood Lumber Exports ............................................................................................................................................ 22 Graph 11 Global Softwood Lumber Exports ...................................................................................................................................................... 22 Graph 12 Moulding and Better Radiata Pine Prices ........................................................................................................................................... 24 Graph 13 Global Delivered Lumber Prices.......................................................................................................................................................... 24 Graph 14 China Softwood Log Prices, CFR China port ....................................................................................................................................... 25 Graph 15 Pruned Wood Availability Forecast .................................................................................................................................................... 26 Graph 16 New Zealand Clearwood Exports to Europe ...................................................................................................................................... 26 Graph 17 New Zealand MDF Exports ................................................................................................................................................................. 31 Graph 18 New Zealand MDF Imports ................................................................................................................................................................. 31 Graph 19 Global MDF Imports ............................................................................................................................................................................ 32 Graph 20 Global MDF Exports ............................................................................................................................................................................ 32 Graph 21 MDF 3/4” (South Central) ...................................................................................................................................................................