World Trends in EWP Presentation to Joint ECE Timber Committee

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World Trends in EWPPresentation to Joint ECE
Timber Committee FAO European Forestry
Commission October 10, 2000 Rome, Italy
Al Schuler USDA Forest Service Craig Adair
APA The Engineered Wood Association Ed Elias
APA The Engineered Wood Association
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Outline

• Definition of EWP
• Compare/contrast world demand/end use
  applications
• Demand drivers and outlook for next few years

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1. EWP Definitions

• 1. Structural Composite Lumber (SCL)
• Laminated Veneer Lumber (LVL)
• Parallel Strand Lumber (PSL)
• Oriented Strand Lumber (OSL)
• 2. Wood I-Beams
• 3. Glued Laminated Timber (Glulam)

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2. World Demand Trends for EWP

• EWP versus conventional wood products
• Compare contrast demand in North America vs
  Europe vs Asia
• Why the major differences??

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Consumption of sawnwood, wood based panels, and
EWPs in Europe, NA, and Japan
EWP still a small market
Million cubic meters
1999 data
Source APA,2000 Timber database,2000
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Regional EWP Markets
Glulam is the only universally used EWP LVL
I-beams geared to NA
LVL, Glulam
I-Beams
1999 Consumption
Source APA 2000 Jaakko Poyry 2000
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Wood frame construction
NA consumes the majority of EWPs to frame their
homes To date, little used in nonresidential/comme
rcial construction
Source APA 2000 Jaakko Poyry 2000
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I-beam production
Million linear meters
Most of the I-beams used in Residential flooring
applications
Source APA 2000
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LVL end uses
North America - LVL used in I-beams
primarily Europe main uses are engineered
constructions/nonresidential buildings Japan/Asia
Pacific main uses are furniture and other
decorative/non structural applications
Market Share
Sources APA 2000 Jaakko Poyry 2000
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North American EWP Markets

• New Nonres. Renovation
• Homes Buildings Export/Other
• Glulam 52 38 10 100
• I-beams 83 7 10 100
• SCL 60 20 20 100
• Structural composite lumber products not used
  to make I-joists.

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Engineered Wood Products
In 1998, 8.6 of all lumber-like products used
in new home construction in North America were EWP

• Beams
• Floor Joists
• Roof Rafters
• Window/Door Headers

Lumber products only. Panels excluded.
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Glulam consumption versus imports
Glulam is the only EWP that is heavily traded
internationally Trade is from NA and Europe to
Japan
1000 cubic meters
Source APA 2000, Jaako Poyry 2000, Japan
Customs Bureau 2000
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3. Outlook
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Why Have Engineered Wood Products Grown???
Environmental issues trade restrictions Fewer
smaller logs, higher log prices Continued
commodity price swings Builders like the
results better value
Source APA The Engineered Wood Association
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• Demand Drivers for EWPs
• Changing Fiber Supply leads to
• Fiber Cost Increases
• Lots of focus on U.S. experience, but we are
  seeing
• Similar fiber Restrictions all over the world
• Canada reduced AAC in BC and eastern Canada
• South America rain forest harvest restrictions
• China recent harvest and wood use restrictions
• Malaysia harvest restrictions on tropical
  hardwoods
• Russia infrastructure problems reduce harvest
  potential

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U.S. Experience Total Timber Harvest - Public
Private - Washington Oregon
Court ordered harvest restrictions on Federal
lands

• Two major impacts
• Total harvest down 50
• Private share now about 78

Million cubic meters
Spotted Owl Effect
- 50
Private
Public
Source USFS ( PNW RB - 231 , May 2000)
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EWP give higher yields from the log that means
less waste and lower manufacturing cost
Final product yield ()
Source Forintek, TJ MacMillan, USDA FS
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Efficiency Advantages EWPsFiber Savings in
U.S. Housing

• Conventional Floor System
• 1700 lineal feet (531 meters) lumber/house
• With 1.3 million single family houses,
• 8.25 million cubic meters wood fiber/yr.

• I-beam system
• 50 savings in wood fiber
• (Spelter, 1997 FPL GTR 99)
• 19.2 (48.75 cm) on center, LVL flange, same
  subfloor
• thickness, OSB web)
• Save 4 million cubic meters wood fiber/year

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Demand Drivers for EWPsBuilders/customers like
the product due to Better Quality and less Price
Volatility
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I-Joist 2x10 Lumber Prices
Builders wanted higher quality and stable prices.
PRICE PER METER PRICE SPREADS
I-Joist
2.26
2.85
2.33
2.62
2 x 10

• 9-1/2 I-Joist, 6-city delivered average
• 2 x 10 No. 2 Btr. Southern Pine,KD, 14,
  Westside, mill price

Source Random Lengths Publications and
Engineered Wood Trends
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Demand Drivers for EWPs Demographics aging
population favors labor saving construction
techniques
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An Older America Implications for Building
Materials
Japans Europes demographics are worse
Distribution of Population By Age Group ()
Framing Crew Labor Pool
Prime House Buying Age Group
Source US Bureau of Census
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Labor Saving Efficiencies Examples

• Applications Conventional EWP Solution
• Solution
• Garage Door Headers two 2x10s nailed together
  one LVL beam
• Floor System conventional floor I-Joist
  system with 80 with 133 pieces pieces
  (40 less)
• Carrying Beams three or four 2x12s nailed
  one 3 ½ (8.9 cm) LVL beam one Parallam
  beam
• Roof Truss metal plate wood truss with metal
  plate wood truss system with conventional
  lumber chords MSR chords(25 less
  lumber)

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Factory built homes and use of prefab
(engineered)components gain share from
stick-built construction.
Factory built homes use more EWPs
HUD Code
Modular
Panelized
Production Builders/ Site Built
Note These estimates are slightly higher than
U.S. Census estimates because they include
production for export
Source Automated Builder
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EWPs Plants in North America
Number of plants
Number of plants has doubled, and average plant
size is larger today
Source APA
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North America EWP Growth
Immediate growth substitute for wide lumber
(2x10s) in residential markets Longer term
substitute for lumber and non wood products in
all structural applications both residential and
nonresidential/commercial markets
1000 cubic meters
Glulam
I-beams
LVL
Source APA 2000
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European glulam production
Growth driven by interest in timber frame
construction And export opportunities (Primarily
to Japan)
Thousand cubic meters
Source Jaakko Poyry 2000
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Global Glulam Production
Thousand cubic meters
Source R. Taylor Assoc. Wood Markets Monthly,
Sept. 2000
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Global LVL Production
Thousand cubic meters
Source R. Taylor Assoc., Wood Markets Monthly,
Sept. 2000
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Global I-beam Production
1000 cubic meters
Source R. Taylor Assoc., wood Markets Monthly,
Sept. 2000
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Product Life CycleCompetition, new
technology, and changingresource driving trends
to EWP
Product Life Cycle
GFB gypsum fiberboard OSL oriented strand
lumber PSL parallel strand lumber
PB
Market share
OSB
MDF
Plywood
LVL, I - beams
Lumber
Industrial Plywood
Laminated Lumber(glulam)
GFB, OSL, PSL
Plastic Lumber
Strawboard
Develop. Expansion Rapid Growth Mature
Decline
Time Horizon
Source USFS
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Potential Problems for EWPs
Adding capacity too quickly easy todo with new
markets
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MSR Premiums Shrink as Production Soars
Premium to 12
Million BF
Source Random Lengths, MSR Lbr. Producers
Council
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Future Fiber Supply Uncertain???
EWPs offer additional flexibility to use whatever
fiber is available Why?? Here are two
reasons!!!! gt New conversion systems focused on
small log resource e.g. flaking machines for
SCL (LVL, OSL, PSL) gt New resin
technology/systems let us use more species
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• Facts
• We dont use the majority of the species
  available to us
• 2. Now, old growth is becoming off limits
• Plantation forests offer opportunities to grow
  pulpwood size trees in
• a fraction of the time required to grow
  conventional size fiber
• 4. EWPs technology allows us to use a wider
  range of available fiber