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Industry Review
Consolidated Management Report / Market Review
Timber industry and agriculture
As global population figures rise, the consumption of timber products accelerates as well, driving
up demand for timber accordingly. This dominant trend is going to prevail on the markets, but
the main beneficiaries will be countries in Asia, Latin America and Oceania, as timber is supplied
increasingly from plantations in such regions.
After having reached a low point in 2009, global consumption of construction timber began to
grow again in 2010. In 2011, a moderate growth rate of 4 per cent was achieved according to the
International Wood Markets Group. In Europe, Germany remained the largest market for sawlogs
with a share of approx. 21 per cent, followed by France, Great Britain, Sweden, Italy and Austria.
The Russian market saw a clear increase in 2011. Nevertheless, the current economic developments
have also been felt in the timber industry. Hence, it is expected that in 2012, consumption in both
the USA and Europe will remain stable at a level similar to that of 2011.
As in other industries, an increase in demand in the timber industry will, for the most part, come
from Asia. Imports of construction timber recently grew by up to 50 per cent and resulted in high
inventory levels. Following their reduction in the first months of 2012, new annual growth of
approx. 15 per cent is expected. Imports to Japan increased significantly in 2011 as the disastrous
earthquake and the tsunami affected the housing situation considerably. The reconstruction
measures will continue into 2012 and contribute to Asia resuming its position as a growth region.
Demand for timber and agricultural
products is driven by growing
global population figures.
The agricultural sector remains a shrinking market in Europe. The European Union has kept the level
of the proposed agriculture budget for 2014–2020 unchanged, which gives rise to the expectation
that the coming years will be marked by stability. Development potential has also been identified in
the trend towards bioenergy.
In general, it can be observed that the continuous growth of population figures is having a positive
effect on the demand for agricultural products. It is assumed, for instance, that primarily regions
such as North America and Asia have stepped up their agricultural production and thus will also
record growth, partly at a strong rate, in the 2012 financial year. The Chinese government, by
means of its most recent five-year plan, supports the mechanization of production in order to
guarantee the population a medium to long term supply of agricultural products.
Recycling
At the end of 2011, the gathering financial and economic crisis also had a negative impact on the
climate in the scrap market. While at the beginning of the year further recovery was still expected,
there was talk of a downward spiral in the second half. This mood was reflected in declines in
production and/or in the demand for purchased scrap and, as a consequence, also in a collapse of
prices.
According to the German Federal Association for Secondary Raw Materials and Disposal (Bundesverband
Sekundärrohstoffe und Entsorgung), the decline in prices for process scrap is going to
continue. The market segment of post-consumer scrap depends, to a large extent, on exports,
which are expected to remain at a high level due to the demand from China and India.
palfinger Annual Report 2011
49