First published on Timberbiz, 7 July 2021

Australia will see an increasing need to import timber in one form or another for at least the next couple of decades. And there’s no great resource of this product available to suddenly ship to Australia, and neither is there any great enthusiasm for Australia among importers.

hn Halkett Australian Timber Importers Federation General Manager. Photo by Timberiz

John Halkett Australian Timber Importers Federation General Manager. Photo by Timberiz

That was the picture painted by Australian Timber Importers Federation general manager John Halkett to an industry webinar organised by WoodSolutions to discuss the timber supply issue.

Mr Halkett said that because the market sizes are different to Europe, and the demands around compliance in Australia many importers found that the Australian market was pretty tight.

“We know that the bushfires savaged something like 40% of the domestic plantation resource, and we also know that the establishment of new plantations has stalled in Australia over the last decade, so we’re 20 years away from having a net resource available,” Mr Halkett said.

The stimulus associated with building and construction in Australia as a way of moving the economy beyond Covid had been replicated across the planet.

“Most countries in the OECD see building and construction as an important part of the response to Covid,” he said.

“So, the sort of demand we’re seeing in Australia is replicated elsewhere, and that’s given, of course, rise to major problems on the supply side.

“The cheap money that’s available from governments has affected most countries and certainly structural timber products are in really tight demand.”

Mr Halkett said that from an import point of view, it needed to be acknowledged that any product that came into Australia had to be compliant with the Australian building code and must comply with phytosanitary regulations and illegal logging requirements.

“And that’s been a challenge in relation to some new sources of structural timber imports from parts of the Northern Hemisphere,” he said.

“One of the things that we have done as productively as importers is to try to develop new sources of supply for structural products that comply with the MGP 10 requirements.

“And that means sourcing products from the northern hemisphere from the natural forests of North America and from Europe.”

Australia had been quite successful through companies like CanFor sourcing significant amount of timber from Canada and by working with Stora Enzo, bringing in significant amounts of Baltic pine sourced from across Europe, and processed through sawmills in Lithuania and the Czech Republic and imported into Australia.

“The reality though, is that price increases have been really volatile, certainly in the Northern Hemisphere,” Mr Halkett said.

“We’ve seen an increase in Europe of log prices to AUD160/cubic meter at roadside and these prices, which are more than doubled, are likely to continue to increase.

“We’ve also we know that European sawmills generally have a shut down about September, and they are fully committed to supply existing customers.”

There was also the problem of a world-wide shortage of shipping containers which has caused their costs to go up, and port charges in Australia, between 2019 and 2021, had doubled.

“There’s no doubt that despite the best endeavours like Hyne and AKD that we are going to see an increasing requirement for structural products, whether they be solid wood, or whether they be of the engineered product.

“But there’s no silver bullet here. There’s no great resource of this product available to suddenly ship to Australia.”

The Australian Timber Importers Federation has been talking to several prospective additional northern hemisphere suppliers.

“We’re also talking to federal ministers and to officials about mechanisms that may be considered to improve the prospect of increasing the volumes of timber imported from the northern hemisphere,” Mr Halkett said.

Those discussions have included countries like Sweden, Lithuania, Russia and from Canada.

Russia in particular offered an opportunity.

Russia has announced a ban on log exports from 2022 from next year and Mr Halkett said it was anticipated that a lot of that product would be processed domestically.

“That should provide an opportunity to increase the volumes of some product coming into Australia,” he said. “So certainly, we are talking to the Russians.

“There’s no doubt that in the next decade and beyond, given the situation in Australia with domestic supply that the changes we’re now seeing in relation to housing approvals, and building additions and alterations, that there is going to be a need for increased imports of timber products.

“Otherwise, we’re all going to be living in steel houses.”

 Source: Timberbiz