1. Outlook for Australia’s forestry and forest products industry
Mark Kelly
URS Forestry

2. Outline of issues International context
Resource trends and log markets
Sawn timber
Pulp and paper
Export woodchips
Composite boards
Emerging products
Conclusions

3. International overview
China’s demand and production driving international wood product markets
Declining native tropical forests
Increasing supplies from plantations
Supplies from Russian forests
South American pulp and paper expansion

4. China’s demand and log prices
Softwood log imports
Hardwood log imports

5. The rise of plantations
Proportion of roundwood sourced from tropical plantations and tropical native forest

6. Large expansion in market pulp capacity in South America will help meet China’s demand
Expansion of market pulp capacity in South America
China’s imports of pulp

7. Australian plantation resources
New softwood plantation establishment in Australia
New hardwood plantation establishment in Australia
Softwood changed from one of increasing supplies to constrained opportunity for expansion
Plantation hardwood pulpwood will expand rapidly over the next decade - another 8 million m3 pa

8. Australian native forest resources
Current harvest volumes
Future harvest volumes
NSW
665,000 m3 of native forest sawlogs harvested in 2005/06
Most committed under Wood Supply Agreements
Private native forests supplying around 500,000 m3 pa
Expect some decline in harvest over next years.
Plantation resources may compensate but unlikely to be sufficient
Sustainability of private native forests unknown
Tas
650,000 m3 pa RFA sustainable sawlog harvest
Private forests currently supplying around 300,000 m3 pa of sawlogs
Relatively stable public native forest supply with future decline to be met by increasing plantation resources
Private native forest harvest may decline
Qld
Around 250,000 m3 pa of sawlogs from public native forests
Around 250,000 m3 pa of sawlogs from private native forests
Most native forest harvesting on crown land will cease by 2025, to be replaced by plantation resources
Western hardwoods region (around half) to cease around 2012
Harvest from private native forests expected to decline
Vic
Around 580,000 m3 pa of native forest sawlog
Private native forest volume unknown
Volumes recently reduced due to impact of Alpine fires
Impact of latest fires still being considered WA
Sustainable native forest sawlog yield of 185,000 m3 pa
Private forests very small
Ongoing sustainable yield from public forests of 185,000 m3 pa

9. Sawn timber consumption
Apparent consumption of sawn timber in Australia
Per capita consumption of sawn timber in Australia

10. Hardwood sawn timber continue to move to high value appearance uses
Apparent consumption of LVL in Australia
Rapid growth in LVL consumption in Australia
LVL creating competition in hardwood structural markets
Also potential competition from LSL

11. Pulp and paper
Apparent consumption of printing and writing paper in Australia
Apparent consumption of pulp in Australia

12. Woodchip exports Real Australian hardwood woodchip export prices
Forecast supplies of hardwood chips in Australia

13. Composite boards Apparent consumption of particleboard in Australia
Per capita consumption of boards in Australia
Apparent consumption of MDF in Australia

14. Emerging environmental markets
Development of carbon trading provides opportunities for plantations
Bioenergy and biofuel also provide opportunities
Water issues can have both positive and negative implications

15. Key issues for the future
Need to attract investment in sawlog plantations
Focus on higher value production
Develop markets for environmental services
Private native forests
Scope for sustainable management
Pulp mills are very important to hardwood pulpwood sector
Hardwood sawn timber to face continued competition
Building understanding of sustainability
Certification