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British Columbia Government Changes to the Manufactured Forest Products Regulation (MFPR)

British Columbia Government Changes to the Manufactured Forest Products Regulation (MFPR)

GDF-2x4-and-logs-5year-AUG 2020

The British Columbia government announced Thursday changes to the Manufactured Forest Products Regulation (MFPR) around export requirements for sawn-wood products and lumber made from western red cedar or cypress go into effect Sept. 30, 2020. These changes are intended to increase the amount of processing of wood products done within British Columbia, leading to more B.C. jobs, rather than having that processing done after export.

Under the current MFPR, logs that are squared off up to a maximum dimension of 0.2 square meters (17 x 17 inches) are classified as sawn-wood product and can be exported without further manufacture.

Under the amended MFPR, the maximum dimension of lumber to be considered a sawn-wood product will be 0.1 square metres (approximately 12 inches by 12 inches). This will require further domestic processing of lumber prior to being eligible for export. Additionally, the regulation amendments will require that in the Coast area, lumber that is made from western red cedar or cypress must be fully manufactured.

“The additional information provided by the Government includes the application of a tax on Western Red Cedar and Cypress exported from the Coast of British Columbia within 3,000 miles from British Columbia. The amount of the tax varies depending on the extent of processing applied to the lumber before it is exported.” — Western Forest Products press release

Products that do not meet these new criteria will require a provincial export permit and payment of a fee in lieu of manufacture to be eligible for export.

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MFPR, introduced in 2003, defines the criteria that products must meet to be considered manufactured under the Forest Act. Under the current regulation, logs that are squared off up to a maximum dimension of 0.2 square metres (approximately 17 inches by 17 inches) are categorized as a sawn-wood product and may be exported without further manufacture.

Positive trends in the global softwood lumber markets

Despite the COVID-19 pandemic and its bad consequences on trade, there are more positive signals to notice in the global lumber markets: a huge surge in demand in China, a booming demand and record lumber prices in US, while the European sawmills are taking advantage of both cheaper damaged logs, which make them more competitive, as well as of the surging demand in the US and China. 


In the 2Q 2020, China increased importation of softwood lumber by 42% quarter-on-quarter, reaching 7.1 million m3. This large increase followed a quarter where import volumes had fallen to a four-year low.

However, for the whole first half of the year, the imported softwood lumber to China was 12,478,800 cubic meters, worth 2.16 billion US dollars, and the unit price was 173 US dollars per cubic meter, down 11.6%, 16.1% and 5.1% respectively.

Chinese imports from Russia and Canada, the two main source countries of imported softwood lumber, both dropped sharply in the first half of the year, down 12% and 45.6% respectively year-on-year; imports of European softwood lumber increased by 35.4%, of which Belarus saw the largest increase of 147.9%. Mainly because of pests and diseases, Europe has increased the output of softwood lumber.

Finnish and Swedish softwood lumber producers in Northern Europe were forced to lower prices in the first half, and their unit prices also fell sharply, down 17.1% and 20.3% respectively. Imports of Finnish softwood lumber fell by 16.7% in the first half of the year, while imports of Swedish softwood lumber increased substantially by 50.1%.


The good news for lumber producers in North America has been the increased usage of wood products in the repair and remodeling sector.

US softwood lumber prices have risen spectacularly this year. Market prices for commonly traded grades have more than doubled from May to August.

Record high lumber prices in the US and slightly lower costs for sawlogs moved 2Q 2020 gross margins for US sawmills to some of the highest levels seen since 2005.

Several major lumber mills cut back on their production when COVID-19 arrived in the U.S. earlier this year. Mill officials cited concerns of a worsening economy and the health and safety of their employees, but didn’t foresee demand rebounding as quickly as it did.

Lumber producers both in the U.S. and Canada curtailed operations to a great extent in March and early April, both because there were lockdown orders and they forecasted that plunge in demand.

But months-long quarantines enacted throughout the country caused a spike in do-it-yourself projects, with Americans heading in droves to their local home improvement store to purchase construction supplies.

Lumber producers didn’t anticipate the resurgence of the housing sector being as strong as it has been, and the massive increase in this do-it-yourself demand.

Both softwood lumber and treated lumber are difficult to find right now, and producers have been able to hike up the prices because the wood is in such high demand. Treated and untreated framing lumber have risen in cost by at least 50 percent since the beginning of the year.


The acceleration of the spruce bark beetle infestation in Europe has provided mills with low-cost logs, a higher proportion of production being directed to export markets such as China and now the U.S. European sawmills have gained market share in the U.S. at the expense of higher-cost Canadian and U.S. producers. From a European exporter’s perspective, the U.S. market also has the advantage of being accessible by both break-bulk vessels and containers.

German and Swedish exports to the US increased by 54% and 82% in the first half of the year.

The prices of exported lumber from Europe to the United States has doubled for European suppliers since mid-April. With a weekly gain of 44 € / m³, the previous week reached an average of 408 € / m³ for 2X4.

The price level achieved in August is the highest ever for European exporters with a currency ratio of 1.18 US $ / €. Such price highs were not even reached in the early summer of the record year 2018.

Lumber exports of German sawmills can currently be estimated at around 360 € / m³. The current price level is a 160 € / m³ higher than at the same time in 2019. All prices apply to delivery free US east coast for 2X4 SPF (KD) # 2 & better.

The U.S. looks to be a very good fit for central European mills in an era of spruce bark beetles, but it will depend on net lumber returns and prices relative to other markets. Lumber exports to China are also expected to continue rising.

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Finnish forest industry exports drop 18% in H1/2020

In the first half year the exports value of the Finnish forest industry products totalled in real terms EUR 5.18 billion (deflated using wholesale price index).

Compared to the same period previous year the exports value decreased by 18 percent. In June the exports value of forest industry products totalled EUR 0.85 billion.

In January-June the real exports value of Finland’s wood-products industries totalled EUR 1.18 billion and decreased by 19 percent from previous year. The exports value for both sawn goods and plywood decreased by 23 percent from previous year. The exports volume of sawn goods decreased by 19 percent and of plywood 24 percent.

The exports value for pulp and paper industries decreased in real terms by 18 percent to EUR 4 billion in the first half year. In the same period within the most important exports goods the exports values and volumes continued to decrease. Exports value of bleached sulphate pulp decreased by a quarter, but volume decreased only by seven percent.

The last price peak in real terms of bleached sulphate pulp was in September 2018 (682 EUR/t). This year’s price level has been a third lower. Both exports value and volume of magazine paper decreased by a third. The exports value of fine paper decreased by 28 percent and volume by 26 percent.

In January-June Finnish wood imports totalled 6.20 million cubic metres. Compared to same period previous year wood imports increased by 12 percent. In June 2020, wood imports totalled 1.13 million cubic metres.

Of imported wood in the first half year 52 percent was pulpwood and 36 percent chips. The share of logs was four percent. Compared to previous year the imports of chips ang logs increased by a fair quarter but the imports of pulpwood decreased by two percent.

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EGGER laminates its first particleboard panel at its new plant in Lexington

EGGER announced it has laminated its first particleboard panel at its new manufacturing facility in Lexington, North Carolina.

Employees gathered around for a signing ceremony where they signed the first board, celebrating the significant milestone as the first thermally fused laminate (TFL) board rolled off the press.

The signed board will eventually be displayed in the office building. Particleboard lamination with decorative surfaces will be a major production focus for the Lexington plant, as well as production of raw particleboard which will begin in the coming weeks.

The first board was laminated on one of two short-cycle presses installed at the plant. The state-of-the-art technology allows boards to be laminated on both sides, with deep, embossed-in-register (EIR) textures that create strikingly authentic reproductions of wood, stone or other materials.

“We are very proud to be celebrating this historic moment in EGGER history with the Lexington community,” said Bernhard Vorreiter, project manager for technical and production. “Despite the ongoing COVID-19 crisis, our project team, local employees, suppliers, contractors, local authorities and many others have managed to push through the challenges to build this 1.1 million-square-foot manufacturing plant from the ground up in less than two years. We are thankful for all the dedication and commitment to this greenfield project.”

Construction on the state-of the-art production plant, the company’s first in North America, began in late 2018. The first board lamination marks a key step to fulfill the company’s initial goal of beginning operations by the end of 2020. The $700 million facility enables EGGER to better serve its customers in the United States and improve access for architects, designers, wholesalers and furniture industry customers to EGGER’s wide range of wood-based products and cutting-edge designs.

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Sawlog prices fall in most regions of the world in Q2/2020

Sawlog prices fell in most of the major regions of the world in the 2Q/20. A strengthening US dollar, weaker log demand early in the quarter, and sufficient log supply in some markets contributed to the lower prices.

The Global Sawlog Price Index (GSPI) declined four percent q-o-q to its lowest level in over ten years, reports the Wood Resource Quarterly.

The European Sawlog Price Index (ESPI) has fallen 9.1% in the past year. The largest sawlog price decreases have occurred in Central Europe.

Global trade of softwood logs fell by approximately 15% y-o-y during the first half of 2020 as the consumption of lumber dropped throughout the world.

Global Pulpwood Markets

Wood raw-material costs fell for most pulp manufacturers throughout the world in the 2Q/20, which reduced WRI’s two fiber price indices for the fifth consecutive quarter. The Hardwood Fiber Price Index (HFPI) dropped to its lowest level since 2004.

The world’s two largest purchasers of wood chips, China and Japan, drastically reduced their chip importation in the 2Q/20, as the COVID-19 epidemic took its toll on pulp and paper consumption in the two countries.

Global Pulp Markets

Prices for hardwood market pulp (HBSK) have remained practically unchanged during the COVID-19 epidemic, despite short-term increases in demand for tissue and other paper hygiene products.

Prices for softwood pulp (NBSK) have inched up slightly this year from a threeyear low in early 2020.

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Tschopp Holzindustrie to invest in a new sawmill in Switzerland

Tschopp Holzindustrie to build a new sawmill in Switzerland. This will replace the existing plant, which has been operating at full capacity in three shifts for years. The building permit is expected in January 2021, after which construction work will start immediately.

All machines and systems have already been ordered. The company Springer from Austria supplies the log yard, the sawing line comes from USNR AB from Sweden, the sorting and stacking systems come from TC Maschinenbau from Austria and the disposal technology is supplied by Vecoplan from Germany. After a two-year construction phase for the 123 meter long and 20 meter high hall, as well as for the assembly of the machine and conveyor technology, commissioning is scheduled for spring 2023.

The heart of the new plant is high-performance Quadro band saws from USNR AB. A Quadro band saw consists of a unit of four band saws. Two Quadro units are installed, making eight band saws available. This innovative saw technology enables a very high cutting performance, flexibility in the cutting patterns and at the same time a large yield.

The new sawmill is vital for the future development of Tschopp Holzindustrie AG. The cutting capacity is so generously dimensioned that in addition to the requirements of the shuttering panel plant, sawn timber can be produced for new products without any problems. After a phase of commissioning, the cutting volume will be 135,000 m3 per year.

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