BC’s pending stumpage increase shows just how challenging BC sawmilling economics have become: ERA. In related news: US and Canadian housing-starts scale back; and tissue production shows solid growth. In other Business news: Mercer provides update on fire at Stendal pulp mill; and pundits weigh in on Premier Horgan’s retirement and what it means for the NDP.
In Forestry/Wildfire news: researchers work to restore the American chestnut; Oregonians are united in their concern for wildfire; Yukon closes Kondike Highways due to fire; Utah evacuations are blamed on fireworks; Amazon deforestation hits new record; and the EU deforestation law could be watered down.
Finally, new “fire shelters” protect firefighters caught in the middle or fast moving wildfires.
Kelly McCloskey, Tree Frog Editor
Mercer International, provides the following update to its press release of July 1, 2022 regarding a fire which occurred in the wood chip storage area at our Stendal pulp mill. Currently, the fire has been primarily extinguished but as is customary in such cases, the site will be monitored for hot spots for several more days. The fire did not damage the mill operations and the damage appears to have been confined to the wood chip storage bunkers and associated conveying systems. The Company will, as permitted by site monitoring measures, conduct a more formal detailed assessment of damage and required repairs and develop a restart plan. Until such assessment and plan, there can be no assurance as to when the mill will recommence operations.
Triggered by mortgage rate increases, expectations concerning housing starts in the U.S. and Canada have been scaled back. Nevertheless, the starts statistics are holding up not too badly to this point in time. In the U.S., the monthly average of unit groundbreakings has increased by +8.5% year to date, although the latest monthly level was -14.4% compared with the previous month, falling from 1.810 million units in April to 1.549 million units in May. Upcoming June’s results will make clearer whether there is still support for a decent number of starts this year. In Canada, the monthly average is -12.4% year to date compared with Jan-May 2021, but the individual month of May was quite strong, 287,000 units SAAR. The 287,000 number was the highest in any month so far in 2022 and the best since November of last, when 306,000 units were initiated.
US parent roll production increased +7.7% y/y – According to RISI, US parent roll production increased by 58k tons y/y to 815k tons, while tissue mill capacity was up 4k tons y/y to 872k tons, increasing the US industry operating rate to 93.5% vs. 87.2% last year. However, the US industry operating rate decreased by 0.7 percentage points m/m, as production increased by 20k tons m/m, while capacity increased by 28k tons m/m. …Other RISI findings include:
Scientists have warned Members of European Parliament (MEPs) that a high-level move to water down EU legislation on deforestation could undermine Europe’s net zero emissions plans. European environment ministers rewrote a draft regulation last week to define “forest degradation” as the replacement of primary forest by plantations or other wooded land. In the EU, which has about 3.1m hectaresof primary forest amid 159m hectares of overall forest, it would limit the law’s reach to only 2% of the total area. While the proposal would also apply internationally, this could “hinder the legislation from tackling forest loss on EU soil and create a perception that the EU is evading its own forest-related responsibilities – instead throwing the burden on to developing countries in the tropics”, the scientists said. …Any exclusion of forest degradation from the law would… “gravely weaken” EU efforts to bolster global conservation, the letter adds.
