Record attendance and good news for market at ISC 2018 in Riga

This year's International Softwood Conference in Riga attracted a record attendance of over 200 delegates from around the world and they heard largely positive news for the international softwood sector.
 
The conference, the 66th ISC,  took place on Octobder 11 and 12 at the hotel Radisson Blu Latvija and was hosted by the Association of Latvian Timber Producers and Traders, and jointly organised by the European Organization of the Sawmill Industries (EOS) and theETTF.
 
Before the Conference, participants had the chance to visit four sawmills on the October 9 and 10 – Vika Wood, Kurekss, Smiltene Impex and Rigas Mezi (where participants could also visit the Norupe treenursery ).
 
The Conference itself opened with the traditional market analyses provided by authoritative experts in the sector. The development of production and consumption suggests that the good pace of growth, which was observed in 2017 and the beginning of 2018,  is expected to continue into the rest of the current year. For 2019 the picture looks less good, with some darkening clouds on the horizon.
 
In Europe most markets are on the rise, with strong demand across the continent. Mr Andreas von Möller, President of ETTF, provided a comprehensive overview of the construction activity in Europe, showing that the confidence index is going up and the production index has reached the highest levels since 2010.
 
The wood door sector is also doing well, whereas the window door sector is stable.
 
Mr Sampsa Auvinen, President of EOS, underlined in his presentation that the European demand has been very lively over the last few months and is set to remain so in the short run. Buoyant construction activity is in fact pushing up European demand to its highest levels this decade – and medium- term positive forecasts justify  moderate optimism. The financial performance of the European sawmilling industry is solid, reported Mr Auviinen, and investments in operation improvements are taking place.
 
As for the elements that may cast a shadow on an this relatively rosy picture, both presidents emphasized that the uncertainty surrounding Brexit could take its toll on the British economy, which could result in decreasing import volumes.
 
A fully-fledged trade war between the US and China is another potentially destabilizing factor and Mr Auvinen and Mr von Möller also stressed that there might be a risk of overheating in the construction sector. Even more importantly, there are challenges connected to raw materials. Supply problems are limiting the potential growth of production. In the short term, the availability of roundwood is indeed tight in many European countries. A very hot summer and a locally stormy autumn worsened the quality of supply, causing the presence on the market of many logs damaged by pests and storms. In addition there were record-high forest fires in many EU countries. In the long term many factors, including - but not limited to - climate change, may also limit the supply of softwood in many parts of Europe.
 
While lively European markets remain the traditional destination of European production, an ongoing trend points to increasing importance of overseas markets for many European companies. The market destination that stands out is Asia, particularly China, although after a booming 2017, it showed some slowdown in 2018. Japan as well remains an important export destination for many European sawmills, while some North African markets are recovering following a couple of negative years. Exports to the US skyrocketed at the beginning of this year, but the consensus was that there is not much scope for further growth of deliveries . The long-term potential of the US market, however, is impressive, as per capita consumption in some of the fastest growing countries in the world is still very low compared to North America and North European countries.
 
The ISC also included a lively panel discussion between representatives of forest certification schemes, FSC and PEFC, representatives of ETTF and EOS and of the Confederation of the Private Forest Owners. A frank and constructive exchange of views confirmed the importance of sourcing sustainable wood materials while guaranteeing a clear and feasible chain of custody system.
 
In sum, the ISC concluded, there remain many reasons for the softwood industry to be satisfied in 2018. Overall, demand in both internal European markets and many export destinations continues to grow. A recurrent theme of the Conference was that in the past, abrupt falls have followed periods of market euphoria. And according to many stakeholders, 2019 is set to be a year of consolidation of the growth achieved in previous years and as there are some headwinds in the global political and economic context, a slowdown cannot be ruled out.
 
The next edition of the International Softwood conference will take place in Antwerp on 16-18 October 2019.
 
For more information and to download the 2018 ISC presentations please visit the website: http://ettf.info/isc2018.