Daily News for November 01, 2024

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Today’s Takeaway

Mercer reports Q3, 2024 loss, Acadian Timber and International Paper report lower earnings

The Tree Frog Forestry News
November 1, 2024
Category: Today's Takeaway

Third quarter financials by Mercer, Acadian Timber and International Paper reflect difficult market conditions. In related news from the Global Wood Summit: China’s pulp & paper growth triggers mill closures in North America; and the US perspective on Canadian softwood lumber duties. Elsewhere: a partial labour strike breaks out at the Port of Montreal; Microsoft builds with wood to reduce emissions; more on IP’s mill closures; and the latest on the True Value / Do It Right agreement.

In Forestry news: ENGOs urge rejection of biomass energy at UN biodiversity conference; a new study on climate change’s impact on permafrost forests; wildfire depressants dump toxic metals on US West forests; Washington timber sales are back on the chopping block; BC’s Sea to Sky forest fertilization project is underway; and forest fire season wrap-ups from Ontario and Alberta.

Finally, despite monsoon conditions, BC’s Sooke Potholes fire is only just declared to be out!

Kelly McCloskey, Tree Frog Editor

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Special Feature

China’s pulp & paper growth triggers mill closures in North America

Kelly McCloskey, Tree Frog Editor
The Tree Frog Forestry News
October 31, 2024
Category: Special Feature
Region: Canada, United States, International

Day two of the Global Wood Summit in Vancouver opened with a presentation by Alejandra Glazebrook from PwC (Platinum event sponsor). Glazebrook presented insights into the forest sector, highlighting its significant contributions to the Canadian economy, employing over 200,000 people and generating approximately $35 billion.

Opening the panel on pulp & paper, a detailed overview of trends was presented by Kevin Mason, Managing Director of ERA Forest Products Research. ERA’s Kevin Mason reported that recycled fibre has become the biggest input for paper and board production—primarily for packaging issues, and end uses have shifted dramatically with paper in steady decline and tissue continuing its relentless growth. In response, there has been a steady stream of paper machines being converted to packaging—and that trend is expected to continue.

…Fraser Hart, Managing Partner at Trade Tree Online, focused his presentation on international markets, and particularly China, given that it has been building a significant amount of new pulp & paper capacity in recent years. Although wood availability for domestic pulp production will determine the degree to which this growth will continue, Hart said the result has been significant reductions in China’s pulp imports and increases in their imports of wood chips. Bob Flynn, at Timber & Wood, provided an overview of the global wood chip market. …While BC is struggling to find sufficient fibre to feed all existing pulp mills, the US Pacific Northwest has a current surplus, and the US South has a long-term surplus.

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US Perspective on Softwood Lumber Duties

Kelly McCloskey, Editor
The Tree Frog Forestry News
November 1, 2024
Category: Special Feature
Region: United States

Zoltan van Heyningen, Executive Director, US Lumber Coalition, provided a US perspective on softwood lumber duties at the Global Wood Summit in Vancouver. Van Heyningen clarified the difference between policy-driven trade action (that can result in tariffs) and legal processes that administer US trade laws (that can result in antidumping and countervailing duties). According to van Heyningen:

  • “The imposition of duties against Canadian lumber imports is not a policy debate. It is a legal process that is centered around the concept of a rules-based trading system that allows free flow of trade between nations—when one industry operates on different principles and then ships its finished product into the market of another.”
  • “From the US perspective, the softwood lumber trade case has been extremely effective, yielding results that one would expect. Mainly, pushing out unfairly traded imports and allowing the US industry to grow towards its full potential. And the data shows that is precisely what we’ve seen since 2016, which is when the trade cases were filed.”
  • “Regarding the disposition of the AD/CVD duties that have been paid and collected and being held by the US government. The majority of these collected duties will be liquidated into the US Treasury. Unlike Lumber Four, once the US won the appeal of the ITC Injury Determination—this is before the USMCA panel—these collected duties won’t be treated any differently than any custom duties paid or collected by US Customs. It becomes, in essence, US government revenue. Going forward, it is now just a question of the exact amounts at the margins, which will be determined by the appeals process of the various Administrative Reviews.”

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Business & Politics

Labour dispute at the Port of Montreal: Viau and Maisonneuve terminals shut down

By Montreal Port Authority
Cision Newswire
October 31, 2024
Category: Business & Politics
Region: Canada, Canada East

MONTREAL – Yesterday morning an indefinite strike began at the Viau and Maisonneuve terminals, in accordance with the strike notice filed by CUPE Local 375, the longshore workers’ union. As a result, these two Termont-operated terminals are closed, and no rail, truck or ship services will be provided. With 40% of total container handling capacity paralyzed by this work stoppage, and ships and trains already obliged to choose other routes, the Montreal Port Authority (MPA) expresses its deep concern about the negative repercussions of this work stoppage. All the other Port of Montreal terminals remain operational. …We are all aware of how crucial operations at the Port of Montreal are, and the vital role they play not only for Quebec, but also for the rest of Canada. The need to reach an agreement quickly is acute and cannot be ignored,” said Julie Gascon, CEO of the Port of Montreal.

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True Value and lenders reach milestone agreement moving sale to Do It Best forward

By Scott Wright
Hardware Retailing
October 31, 2024
Category: Business & Politics
Region: United States

True Value Company and its secured lenders, led by PNC, reached a major milestone agreement to avoid the liquidation of the 75-year-old Chicago-based distributor in a move that will push the sale to Do it Best forward for now. The agreement allows True Value to continue to use the banks’ cash collateral to fund business operations through the closing of the sale, which, as part of the deal, was moved up by two weeks. In the new agreement, the banks will now recoup $163.27 million of the $238 million they were owed when True Value filed for Chapter 11 Bankruptcy protection on Oct. 14. In the original budgets submitted by True Value’s financial advisers, the banks would have only recouped $135 million.

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International Paper Announces Review of Strategic Options for Global Cellulose Fibers Business and Closure of Georgetown, S.C. Pulp and Paper Mill

International Paper
October 31, 2024
Category: Business & Politics
Region: United States, US East

MEMPHIS, Tenn. — International Paper today announced the decision to review strategic options for its global cellulose fibers (GCF) business. The decision to explore alternatives for the GCF business is consistent with the Company’s strategy to focus on sustainable packaging solutions. IP’s GCF business creates safe, high-quality absorbent pulp for a wide range of applications like feminine care, incontinence and other personal care products that promote health and wellness. In addition, its specialty pulp serves as a sustainable raw material used in textiles, construction materials, paints, coatings and more. The GCF business generated $2.9B in revenue in 2023 and has operations in three countries, with eight mills and two converting facilities. “International Paper is committed to maximizing value for our shareholders, and to that end, we have launched a comprehensive and thorough review of strategic options for our global cellulose fibers business,” said International Paper Chairman and CEO Andy Silvernail.

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Wood Product Exporters Welcome The Gulf Cooperation Council Trade Agreement

Wood Processors and Manufacturers Association
November 1, 2024
Category: Business & Politics
Region: International

Wood processing provides multiple benefits to New Zealand, and it is positive to see the government removing unnecessary barriers and implementing new trade agreements of future benefit to our industry’. The successful conclusion of negotiations on a trade agreement with the Gulf Cooperation Council (GCC) is welcomed by New Zealand wood product exporters. From a New Zealand basis we currently export around $35 million in value added wood products to the GCC, including panels, paper and planed timber. The removal of all tariffs over a 5-year period and the inclusion of provisions in the trade agreement such as streamlined customs processes and reduced non-tariff barriers, will provide further encouragement to develop this export market for wood products. …The GCC members include Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman and Bahrain. Within the GCC timber represents a harmonious blend of tradition and modernity, making it a versatile choice for various structures.

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Finance & Economics

Mercer reports Q3, 2024 net loss of $17.6 million

By Mercer International Inc.
GlobeNewswire
October 31, 2024
Category: Finance & Economics
Region: Canada, International

NEW YORK — Mercer International reported third quarter 2024 Operating EBITDA of $50.5 million, an increase from $37.5 million in the same quarter of 2023 and $30.4 million in the prior quarter of 2024. In the third quarter of 2024, net loss was $17.6 million compared to a net loss of $26.0 million in the third quarter of 2023 and a net loss of $67.6 million in the second quarter of 2024, which included a non-cash impairment of $34.3 million against goodwill related to the Torgau facility. Mr. Juan Carlos Bueno, Chief Executive Officer, stated: “In the third quarter, softwood pulp markets continued to be strong and fiber costs remained stable. However, our operating results were constrained as a result of lower pulp sales volumes caused by unplanned downtime at our Peace River mill and other unexpected production events.

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Acadian Timber reports Q3, 2024 net income of $2.2 million

By Acadian Timber Corp.
The Ottawa Citizen
October 31, 2024
Category: Finance & Economics
Region: Canada, Canada East

EDMUNDSTON, New Brunswick — Acadian Timber reported financial and operating results for the three months ended September 28, 2024. Acadian generated sales of $26.0 million in the third quarter, compared to $26.6 million in the prior year period. Increased sales volumes from our freehold land were offset by a lower weighted average selling price and lower timber services activity. Adjusted EBITDA for the quarter was $4.0 million, compared to $4.9 million in the same period of 2023. Acadian generated $2.5 million of Free Cash Flow during the quarter, compared to $4.3 million in the third quarter of 2023, and declared dividends of $5.1 million.

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International Paper reports Q3, 2024 net earnings of $150 million

International Paper
October 31, 2024
Category: Finance & Economics
Region: United States, US East

MEMPHIS, Tennessee — International Paper reported third quarter 2024 financial results. Highlights include: Third quarter net earnings of $150 million; Third quarter adjusted operating earnings (non-GAAP) of $153 million; and Third quarter cash provided by operations of $521 million and returned $161 million to shareholders in dividends. Chairman and CEO Andy Silvernail. ”Higher prices across the portfolio, including benefits from our packaging go-to-market strategy were supported by a moderately improving box demand environment. We also had higher operating costs and lower volumes due to seasonality and commercial actions to improve profitability.” …”As we look forward to the combination with DS Smith, we expect the transaction will close early in the first quarter of 2025. 

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Wood, Paper & Green Building

Paper-aluminum combo can replace plastic for strong, sustainable packaging

By American Chemical Society
Phys.org
October 31, 2024
Category: Wood, Paper & Green Building
Region: United States

Takeout containers… are nearly impossible to recycle if they are made from foil-lined plastics. Research published in ACS Omega suggests that replacing the plastic layer with paper could create a more sustainable packaging material. …To create such an option for protective packaging without sacrificing functionality, Hamed Zarei and colleagues designed a variety of paper-aluminum laminates and compared their strength and durability to common polyethylene-aluminum packaging. By running simulations of the MD, CD and a mixed MD/CD paper on their digital model, the researchers predicted that an aluminum film paired with a paper layer made from both MD and CD fibers would result in mechanical properties nearly identical to conventional polyethylene-aluminum laminate. While they haven’t yet created the MD/CD paper-aluminum laminate in the lab, the researchers say this study provides packaging engineers with information to create sustainable materials that could perform like conventional options.

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Microsoft builds first datacenters with wood to slash carbon emissions

By Sally Beatty
Microsoft
October 31, 2024
Category: Wood, Paper & Green Building
Region: United States

Microsoft is building its first datacenters made with superstrong ultra-lightweight wood in a bid to slash the use of steel and concrete, which are among the most significant sources of carbon emissions. …Microsoft engineers have developed a hybrid approach using cross-laminated timber, or CLT, a fire-resistant prefabricated wood material that will enable the company to reduce the use of steel and concrete. The hybrid mass timber, steel and concrete construction model is estimated to significantly reduce the embodied carbon footprint of two new datacenters by 35 percent compared to conventional steel construction, and 65 percent compared to typical precast concrete. Microsoft’s hybrid datacenters are the latest examples of how it is working to decarbonize its datacenter and construction operations. Microsoft’s goal is to be “carbon negative” by 2030. …And cross-laminated timber … is being put to the test in what Microsoft believes is one of the first hyperscale examples of engineered wood in a U.S. datacenter.

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University of Wisconsin-Stevens Point’s Institute for Sustainable Technology grant to address state forestry needs

University of Wisconsin – Stevens Point
October 31, 2024
Category: Wood, Paper & Green Building
Region: United States, US East

A $4 million grant is helping the University of Wisconsin-Stevens Point’s Wisconsin Institute for Sustainable Technology (WIST) focus on innovations in the forest products sector, an industry central to Wisconsin’s economy and environment. WIST, a center within the College of Natural Resources at UW-Stevens Point, received the grant from the Wisconsin Economic Development Corporation in March. Executive Director Paul Fowler has since led a series of changes and upgrades to the organization’s infrastructure. With an expanded team WIST has enhanced laboratory capabilities, adding equipment to conduct advanced research on compostable materials and plant growth applications. “With WIST, our Wisconsin Forestry Center and our paper science and chemical engineering program, I am incredibly proud of our college’s ongoing investments in this essential sector of Wisconsin’s economy,” said Brian Sloss, dean of the College of Natural Resources. The grant aims to address current challenges in the $24.4 billion forest products industry, Wisconsin’s fourth-largest manufacturing sector.

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Forestry

Ts’il Kaz Koh hosts community forum in Burns Lake to address wildfire risk reduction strategies

Burns Lake Lakes District News
October 31, 2024
Category: Forestry
Region: Canada, Canada West

Ts’il Kaz Koh (Burns Lake Band) hosted a three-day Community to Community forum focused on Wildfire Risk Reduction from October 23-25. Albert L. Gerow, natural resources advisor for Ts’il Kaz Koh, reported that over 33 organizations participated, including representatives from the Village of Burns Lake, the Regional District Bulkley Nechako, the Ministry of Forests, various levels of government, local industries, and organizations such as Burns Lake RCMP, Burns Lake Search & Rescue, the College of New Caledonia, and Indigenous groups like the First Nations Forestry Council. The forum aimed to share wildfire risk reduction plans, fostering collaborative discussions on strategies and best practices. Participants also engaged in a fire smart workshop to educate on applying Fire Smart practices in their communities. Additionally, they identified high-risk community buildings and discussed targeted mitigation measures to protect these structures.

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Here are some of the key numbers that defined Alberta’s wildfire season

CBC News
October 31, 2024
Category: Forestry
Region: Canada, Canada West

Thursday marks the end of Alberta’s 2024 wildfire season, although nearly 30 total wildfires — all under control — are burning throughout the province. Alberta Wildfire reported more fires this year compared to the historic 2023 season, but a fraction of area burned, according to a news release the provincial government issued Wednesday. This season highlighted the significant role early preparation plays, and spending on people, resources and technology “proved invaluable,” said Trevor Lamabe, executive director of the government’s wildfire management branch, in the news release. Firefighters responded to more than 1,210 wildfires this year, burning more than 705,000 hectares, according to the Alberta Wildfire status dashboard. The Alberta government declared an early start to the 2024 wildfire season on Feb. 20, as firefighters were still working on 64 zombie fires that carried over from the year before. At the time, the government implemented a fire ban and permit system to prevent further human-caused wildfires.

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Sea to Sky forest fertilization project underway

By Liz McDonald
The Squamish Chief
October 31, 2024
Category: Forestry
Region: Canada, Canada West

Jeff McWilliams

A new aerial forest fertilization project in the Squamish-Lillooet Regional District (SLRD) aims to sequester carbon dioxide in forests and improve timber volumes for harvesting. From now through November, helicopters will drop urea, a nitrogen fertilizer similar to what goes on lawns, on forests near Lillooet, Pemberton and Squamish, and signage will be placed on roads to inform the public of safety hazards or delays, according to a notice posted by the Squamish-Lillooet Regional District. The plans have been approved by local First Nations, the Ministry of Forests and forest licensees. The project is funded through the province’s Forest Investment Program and administered by B.A. Blackwell & Associates. Jeff McWilliams, a senior associate with B.A. Blackwell, said programs like this have occurred in the Sea to Sky since the early 2000s. …McWilliams explained fertilizer is trucked to designated areas and loaded onto a helicopter that spreads it similarly to a lawn fertilizer.

Additional coverage in the Squamish Reporter: SLRD notice for ‘Aerial Forest Fertilization’ in the Sea to Sky

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Slower than normal forest fire season in northwestern Ontario wraps up

By Kris Ketonen
CBC News
October 31, 2024
Category: Forestry
Region: Canada, Canada East

The 2024 Ontario forest fire season officially comes to an end on Thursday. This year saw a total of 479 fires reported province-wide, burning nearly 90,000 hectares of forest. Of those, 218 fires were in the northwest, said Chris Marchand, fire information officer with Aviation, Forest Fire and Emergency Services. “Certainly it falls well below the 10-year average, which is about 694 fires,” Marchand said. “If we look to last year, we finished the season with 741 wildland fires, which impacted 441,000 hectares.” “Consistent and widespread spring rains across the province largely reduced our early spring fire danger,” he said. Fire activity did pick up toward the end of the season, thanks to dry conditions from late August to October, Marchand said. “The most active areas that we saw in Ontario in terms of forest fire activity remain, for the most part, in far northwestern Ontario,” said Geoff Coulson, warning preparedness meteorologist with Environment Canada.

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Landmark 20-year study of climate change impact on permafrost forests

Osaka Metropolitan University
October 31, 2024
Category: Forestry
Region: United States, International

In perhaps the first long-term study of CO2 fluxes in northern forests growing on permafrost, an Osaka Metropolitan University-led research team has found that climate change increased not only the sources of carbon, but also the CO2 sinks. The 20-year observation from 2003-2022 in the interior of Alaska showed that while CO2 sinks turned into sources during the first decade, the second decade showed a nearly 20% increase in CO2 sinks. Graduate School of Agriculture Associate Professor Masahito Ueyama found that warming led to wetness, which in turn aided the growth of black spruce trees. During photosynthesis, the growing trees were using the increasing CO2 released from human activities. “[Our data is] the longest record of such research on permafrost forests in the world “However, since it is difficult to apply the findings and data from those 20 years to a future world in which warming continues, further long-term observations are needed,” Professor Ueyama proclaimed.

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Timber sales from 3 ‘legacy’ forests, once delayed, are now back on the chopping block

By Jerome Tuaño
The Journal of Olympia, Lacey & Tumwater
October 30, 2024
Category: Forestry
Region: United States, US West

Three forest stands whose timbers have been authorized for sale but had been paused – are now back on the chopping block as the Board of Natural Resources (BNR) will consider re-approving them for auction on November 5. These forest stands are Juneau, Carrot, and Cabbage Patch, representing 430 acres of forestland. Money-wise, the three forest stands represent $1.9 million in timber revenue for the county, according to projections by the Department of Natural Resources (DNR). The Olympia and Rochester school districts are the most significant beneficiaries, which stand to gain $596,129 and $367,850 from the revenues over several years. All three stands are in the Capitol State Forest and are considered “legacy” forests, especially by certain environmental groups. Legacy Forest Defense Coalition defines legacy forests as “forests that retain significant biological, structural, and genetic legacies of the natural and old growth forests that once dominated the Pacific Northwest.”

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Carbon, Climate & Bioenergy

Burning trees for power is under fire on world stage

By Natasha Bulowski
National Observer
November 1, 2024
Category: Carbon, Climate & Bioenergy
Region: International

Global demand for forest biomass is surging, but the financial incentives offered to projects that burn wood for electricity are under fire on the international stage in Cali, Colombia. In many countries, including Canada, biomass electricity generation is included in the sustainable, clean energy toolbox, because forests can regrow over time… However, biomass critics say this logic is flawed and point out that most of the world’s forests are already being over-logged and ravaged by fire. Canada’s forests now emit more carbon than they can absorb. Harvesting wood for pellets to be burned risks intensifying and expanding industrial logging, which can result in deforestation and degradation of forest ecosystems. This runs counter to science that says preserving forest ecosystems is key for both climate and biodiversity. Activists at the ongoing United Nations biodiversity negotiations urged world leaders to make ending subsidies for biomass supply and power generation a priority.

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Health & Safety

Wildfire suppressants dumped nearly a million pounds of toxic metals into the West U.S.

By Hunter Bassler
Wildfire Today
November 1, 2024
Category: Health & Safety
Region: United States, US West

Companies supplying the U.S. Forest Service with wildfire suppressants may have been hiding various heavy metals present in their formula, according to an ongoing study. Materials used in suppressants, including fire retardants, water enhancers, and foams, all have to be approved by the U.S. Forest Service, according to study author, Daniel McCurry, Associate Professor of Civil and Environmental Engineering. However, the companies supplying the suppressants don’t have to disclose up to 20% of their product formulas, keeping them “trade secrets” under law. Researchers from the USC’s Sonny Astani Department of Civil and Environmental Engineering discovered much of the “trade secrets” could be toxic heavy metals. The team tested numerous wildfire suppressants and found they have released ~850,000 pounds of toxic metals into the environment in the Western United States from 2009-2021. …Researchers estimated the heavy metal amounts using inductively-coupled plasma mass spectrometers. 

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Forest Fires

Sooke Potholes fire officially declared to be out

By Darron Kloster
Victoria Times Colonist
October 31, 2024
Category: Forest Fires
Region: Canada, Canada West

More than three months after it was discovered, the wildfire near Sooke Potholes Regional Park has been officially declared out. The B.C. Wildfire Service updated the status of the Old Man Lake wildfire on Thursday just before noon. It had been listed as under control since Aug. 7. The stubborn blaze first reported on July 22 scorched 230 hectares of forest and steep terrain in the Sea to Sea Regional Park and within five kilometres of Greater Victoria’s main water supply. The fire was suspected to be human-caused, but the wildfire service could not determine if it was accidental or intentional.

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