2019 International Forest Industries Magazine December / January IFI Dec Jan 2019 Digital | Page 10

LOGGING & BIOMASS NEWS
China-U.S. trade dispute sparks uncertainty
The market uncertainty being
caused by the China-U.S. trade
dispute is now one of the most
important topics to watch,
even amid myriad changing
developments and issues that
continue to impact market
dynamics worldwide. The first
volley was made by the U.S.,
and then (on August 23) China
retaliated with a 25% import tariff
on U.S. SYP logs.
Following that, on September
17, the U.S. announced 10% tariffs
on $200 billion worth of Chinese
imports (effective September 24).
The next day (September 18), China
announced 5%–10% tariffs on $60
billion of U.S. goods (also effective
September 24). Most of the timber
and wood products exported from
the U.S. to China are included on
the list of items affected.
Southern yellow pine log
shipments from the U.S. South
had been slowing before the
implementation of the 25% tariff,
impacted by China Customs’
decision in April to increase
phytosanitary inspections
and begin full enforcement of
documentation requirements on
incoming log shipments; as a
result, the July trade data revealed
a drop in SYP log exports of 25%
from April. In addition, the CFR
price of SYP logs being offered
by U.S. suppliers has seen large
declines in the last several months
versus other species.
While the U.S. represented only
a modest share of China’s total log
and lumber imports in H1/2018
(13% of softwood logs, 2% of
softwood lumber, 7% of hardwood
logs, and 21% of hardwood
lumber), fully 54% of U.S. log
exports and 38% of lumber exports
went to China in 2017. Clearly, the
U.S. export industry relies heavily
on the China market.
China’s predominant wood
products exports to all markets
are wood furniture and seating
products (63%), followed by
plywood (14%). Of China’s timber
and wood products exports to
the U.S. in 2017, US$12.9 billion
(35.7% of the total) went to the
U.S., led by wood furniture and
seating (US$9.28 billion). Overall,
the U.S. represented 41% of China’s
wood furniture export value last year.
Russ Taylor,
Managing Director,
FEA Holdings –
Canada Inc
There is little doubt that both
countries will be impaired by this
tariff war, with both ultimately
losing competitiveness in each
other’s markets.
Ence acquires Iberdrola’s 90% stake in
Puertollano solar thermal plant in Spain
Sawmills
SERRA
Ence Energía, S.L.U. has signed
an agreement with Iberdrola
Renovables de Castilla La Mancha,
S.A.U. for the acquisition of its 90%
stake in Puertollano solar thermal
plant, for an amount that could
reach up to Euro 145.8 million.
The agreement is subject to IDAE,
owner of the remaining 10% of the
plant, not exercising its right of
first refusal.
The agreed price amounts to
Euro 139.5 million, excluding a
cash balance of Euro 41.5 million.
Additionally, the agreement defines
an earn-out up to Euro 6.3 million.
With this transaction, Ence
takes its first step towards
diversification to other renewable
technologies, which allows
the Company to obtain similar
profitability to that of its biomass
generation plants. This acquisition
will provide Encewith a stable
annual EBITDA of Euro 18 million
before synergies.
The solar thermal plant in
Puertollano is adjacent to the new
46 MW biomass plant that Ence is
building in the same location, in
the former Elcogas site. This is an
example of a successful transition
from a fossil fuel generation model
to renewable energy while keeping
rural industrial employment,
thanks to the use of surrounding
agroforestry biomass as fuel.
High production!
High accuracy!
Made in Germany!
call [phone]
www.serra-sawmill.com
8 International Forest Industries | DECEMBER 2018 / JANUARY 2019
SkogsElmia is held every fourth year and attracts
about 30,000 visitors and 300 exhibitors. The new
fair manager for SkogsElmia is Mattias Pontén, a
certified forester with great expertise and solid
experience of the forest industry.