Actions taken by wood industries in Malaysia, Canada, U.S. and New Zealand so far
Wood industry,Malaysia,Canada,U.S.,New Zealand,coronavirus,impact
The wood industries in Malaysia, Canada, U.S. and New Zealand have all limited productions following some form of lockdown or movement control. According to Japan Lumber Journal, wood industries worldwide have experienced a set of common and unique challenges that arose from regulations imposed by their own governments and a general decline in market conditions.
In Malaysia, the Prime Minister announced stay-at-home order to prevent further spreading of coronavirus infections but allowed operation of plywood manufacturing in Sarawak, which is basic industry in Sarawak. MDF plants are running through March 20 but operation of chip plant and particleboard plant stopped. By closure of government administration offices, it becomes impossible to acquire legal timber harvest and log export permit.
In Canada, the government ordered to ban entry of foreigners except for Canadian citizens, diplomats and airline workers. The international flights are allowed to use only four cities of Montreal, Toronto, Vancouver and Calgary.
Interfor, one of major lumber manufacturer in B.C., Canada, announced to reduce the production of all the sawmills by 60% for two weeks. West Fraser announced to reduce the production of sawmills in B.C. by 18% and Southern pine mills in the U.S.A. by 24% for two weeks.
It also announced to reduce production of plywood by five billion square feet per week. Both companies reviewed and decrease capital investment plans in 2020.
In the U.S., new housing starts had kept climbing until February then peaked off in the first week of March due to the rapidly spreading corona virus infections so the lumber market started plunging and SPF lumber prices dropped by 30% in one month. By local government restrictions, business activities are largely hindered.
New Zealand government ordered people to stay home on March 26 for four weeks. Export of logs and logging would stop by this since workers are prohibited to go out.
Supply of radiate pine logs and lumber would drop considerably. There is possibility that log and lumber inventories at port or sawmills can be shipped out if the government allows.
Negotiations on logs are disrupted. Export log prices for China were about $105 per cbm C&F in late February but the demand in China is coming back so the log prices are $7-10 higher now with curtailed production by New Zealand suppliers. Nelson Pine Industry, MDF manufacturer, has stopped the operation for four weeks.
Tachikawa Forest Products (Hiroshima prefecture) has been buying crating lumber from New Zealand. Now the supplying mill in New Zealand requests Tachikawa to provide letter to prove that the lumber is necessary for emergency use since the lumber is used for crating food and medical articles in Japan. The New Zealand mill attach the letter for submitting to the government organisation to get permit for export.
Daiken announced to stop operation of two MDF plants in New Zealand from March 23 to April 22.