Lumber News Archives: Dec 2012

Lumber News Archives: Dec 2012

Port Work Stoppage ; Madison’s Timber Preview ; PLIB Awarded ; Quesnel Mid-Term Timber Supply Recalculated ; Japan CLT Shake Test ; California Passes Lumber Tax Law ; Sawmill Electrical Fire ; Howe Sound Strike Vote Canadian Bioenergy Association 2012 ; Dust Safety Data Referred to Crown Counsel ; BC Hydro Right of Way Timber Update ; AFPA Reports ; PwC Third Quarter Earnings Summary ; Lousiana Pacific Buys ; Catalyst Paper Accepts Snowflake Bid Light-Weight Semi-Trailers ; Madison’s Investment Rx ; Madison’s Timber Preview ; US Housing Starts, Existing Home Sales ; Sawmill Fire ; WTO Rules

December 20, 2012

Port Work Stoppage

Clerical workers who walked off the job last week after working for two and half years without a contract put a stop to the transfer of goods at the Los Angeles and Long Beach Port complex, the biggest in the US, for eight days. The job action ended Wednesday. The Southland ports handled 39.5 per cent of the total value of all container imports entering the US last year, said Jock O’Connell, an international trade economist with Los Angeles-based Beacon Economics, to the LA Times. The port moves about US$1 billion a day in cargo, he said. The two ports are directly responsible for an estimated 595,000 jobs in Southern California.

About US$368 billion worth of cargo passed along their docks in 2011, said Art Wong, a spokesperson for Long Beach, to Bloomberg. Top imports include consumer electronics, furniture and clothing.

A group of 800 clerical workers at the twin ports launched the strike November 27 after contract negotiations broke down with the Los Angeles/Long Beach Harbor Employers Association, a group representing 14 terminal operators and shipping agencies. The clerical workers, part of the 10,000-member International Longshore and Warehouse Union Local 63, said they were concerned about job security. A particular sticking point in the talks was the employers’ demand that they not be forced to replace retiring workers or provide temporary staff to cover workers on leave if they thought it wasn’t necessary. The contract discussions had been under way since 2010, when the clerical workers’ previous contract expired.

West Coast Port Strike

Dockworker members of the International Longshoremen’s & Warehousemen’s Union (ILWU) local honoured the clerical workers’ picket lines, shutting down 10 of 14 terminals between the two ports and choking off container traffic at the busy ports.

The two sides came to terms late Tuesday. The union agreed to allow employers to eliminate 14 jobs over the next 3 1/2 years through attrition, stepping back from a long-held demand that every retiring worker be replaced by a new union employee. The employers had sought to eliminate a far larger number of positions.

The union won’t vote on whether to ratify the contract for another two weeks, but it is expected to pass. The six-year deal would be effective retroactively to 2010 and extend until 2016.

By Wednesday morning local time, the terminals shut down by the strike were back open. A spokespreson for the Port of Los Angeles said port pilots went back to work at 11:30 pm Tuesday, and workers began unloading cargo Wednesday. As of Wednesday morning, only five ships were waiting in the bay.
In many ways, the strike paralleled the generational skirmishes that have rippled through factory shops and automobile assembly floors. Cargo companies and ports want to cut costs and automate operations to compete with aggressive rivals in Canada and South America. That is pitting them against unions, which are struggling to preserve high-paying jobs for their middle-class members.

In a sign of the stakes involved, the strike did not revolve around salaries or job security for current workers. Rather, the dispute centered on the contention by the striking Office Clerical Unit that employers were whittling down its membership by replacing retiring workers with nonunion personnel in other states and countries.

Similar trouble is now brewing on the east coast of the US as potential labour strike by International Longshoremen’s Association and the US Maritime Alliance, which involves 14 ports and terminal operations along the East and Gulf Coast from Maine to Texas. At the end of this year this could have devastating economic consequences as inventory depletion, rerouting, hoarding, and price speculation ripple through supply chains of global companies, Marsh USA, a global insurance broker and risk management firm, warns in a new report.

“Potentially, the strike on the East Coast is going to be a much bigger strike. This potential strike (would span) Maine to Texas, so the effects could be bigger,” said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, to Reuters Wednesday.

The collective bargaining agreement between the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX) was originally set to expire on September 30, 2012. That agreement was extended to December 29, averting a potential strike that would stop deliveries to ports along the US Atlantic and Gulf coasts during the holiday retail season.

About 20,000 longshoremen who handle container cargo from Maine to Texas are represented by the ILA. USMX is an alliance of container carriers, direct employers and port associations along the US East and Gulf coasts.

In the event of an additional strike, retail, agriculture, food, and beverage companies would be hit especially hard due to their profit-driven strategy of keeping inventory levels low, and the sudden and severe backlog and rerouting pressures caused by a work stoppage, said Marsh USA in the report released Thursday.

For each day of backlog accumulated during a port closure, affected organizations would typically need about eight days to stabilize inventory levels within their supply chains, the report said.

The National Retail Federation issued a statement Wednesday from its CEO, Matthew Shay, who said that the nation’s economy cannot withstand another port disruption.

“The retail community is pleased to see a settlement of the strike. We are happy both parties came together, with assistance from intermediaries, to reach a new contract agreement,” he said. “Our attention now shifts to the East and Gulf Coast ports, where federal mediators have been locked in prolonged discussions with labor and management for the past two months. We urge the parties to reach a final agreement before their contract extension ends at the end of December.”

The next round of those negotiations are planned to begin a few days before Christmas on December 20.

Madison’s Timber Preview

The last issue of Madison’s Bi-Weekly Timber Preview for 2012 examines the latest announcements out of Canadian Pacific Railway for cost-cutting measures, engine upgrades, and asset sales.

Contact us any time to receive this vital and timely information.

PLIB Awarded

The Pacific Lumber Inspection Bureau announced this week it made a six-figure out-of-court settlement with a Louisiana wood producer, averting a lawsuit over trademark infringement for unauthorized use of a certification stamp – a violation of the Lanham Act.
The confidential settlement was agreed to by both parties before a lawsuit was filed, according to PLIB, which also provides lumber grading services and wood pellet biofuel inspection.

The case involved unauthorized use of the trademarked stamp that identifies dunnage material – used for filling voids in freighters – to verify it doesn’t inadvertently transport forest pests in the wood used securing freight in international shipments. Pests transported that way, such as the emerald ash borer, can be catastrophic.

Quesnel Mid-Term Timber Supply Recalculated

As part of British Columbia’s Mid-Term Timber Supply Action Plan, a new silvicultural strategy analysis has been completed that identifies a 600,000 cubic metre increase in mid-term timber supply over previous projections in the Quesnel timber supply area.

New inventory data has been used which identifies opportunities for harvesting, reforestation, planting and fertilization that can have the greatest effect on timber and other forest values.

BC Timber

The new analysis reflects the past four years of harvest activity, new forest cover information from the eastern portion of the timber supply area, as well as Landscape Vegetation Inventory information for the western portion. Landscape Vegetation Inventory analysis is a method that takes advantage of satellite imagery, high resolution digital aerial photography, and software applications for managing very large data sets.

The main reasons for the higher mid-term forecast in this analysis, as compared to the previous mid-term analysis conducted in summer 2011, are due to the incorporation of new information that indicates lower pine mortality estimates in young stands, more live pine remaining in older stands and new managed stand site productivity estimates that these stands will grow faster than previously thought, according to a BC Ministry of Forests, Lands and Natural Resource Operations.

Ministry staff met with Quesnel timber supply area licensees November 30 to discuss the analysis results. While the new forecast shows an increase in potential mid-term timber supply, this does not mean the current allowable annual cut will change. The chief forester will be considering this, and other new information, in the next redetermination of the allowable annual cut.

Japan CLT Shake Test

Scientists at Japan’s Shizuoka University November 5 reported results of vibration tests on a full-scale, 1×6 metre cedar, three storey cross-laminated timber building, according to the Japan Lumber Reports. Five cedar 1×3 metre, 150 mm thick, wall panels and six 1×4 metre floor panels, 180 mm thick, were used for the test.

Researchers reported that with both medium and large earthquake shocks, there was no damage to the specimen, and deformation was only 1/200th radian.

Japan CLT Earthquake Test

While the test cross-laminated timber building was three storeys high, researchers used assumptions for five storeys, including putting the additional weight load for the shake test, says the Japan Lumber Reports.

While European CLT building codes allow for panels 10 metres high and 3 metres wide, Japan’s JAS standards require 1×6 metre sizes.
Researchers concluded that the current JAS building specifications are safe to use for larger sized CLT building components.

California Passes Lumber Tax Law

A new 1 per cent special assessment, proposed by California Governor Jerry Brown and approved in September by lawmakers, will to take effect January 1, 2013. It is expected to raise US$35 million a year to pay for the regulation of commercial forest lands and for firefighting and prevention.
Some California lumber sellers are angry about a new state tax on 2-by-4s, plywood and other forest products, and they want to make sure that their customers blame the governor and legislators for the upcoming hike in building costs.

The bill also includes a controversial provision that put legal limits on the ability of government agencies to sue landowners, timber operators and others whose negligence might have caused forest fires.

Sawmill Electrical Fire

Saturday morning fire crews were dispatched to a fire call at Tembec’s Huntsville, ON, sawmill.

According to the Huntsville Fire Department, when the crews arrived they observed smoke throughout the old mill. Fire was located in the wall behind the electrical panel. Due to the amount of electrical panels mounted on the wall, crews had to wait for the power to be shut off before extinguishing the fire. Crews remained on scene for approx 90 minutes, checking for extension leading into the roof.

Tembec maintenance staff say the mill will be shut down for about a week for repairs to the electrical system. Damage is estimated to at $50,000.

Howe Sound Strike Vote

The union representing just over 400 workers at Howe Sound Pulp and Paper, in Port Mellon, BC, said it is hoping to avert a strike or lockout at the mill, despite a 99.4 per cent strike vote by its membership on November 29. Turnout for the vote was 82 per cent.

The strike vote was taken two days after Howe Sound indicated negotiations had reached an impasse and applied to the BC Labour Relations Board for mediation.
The Labour Relations Board, meanwhile, has appointed a mediator and the union expects the mediation process to take place in the middle of January and to last about one week.

December 12, 2012

Canadian Bioenergy Association 2012

The 2012 Canadian Bioenergy Association Annual Conference and Trade Show was held this week in Vancouver, BC. An extensive list of attendees from around the world heard presentations on global, and Canadian, bioeconomy, bio-trade, on powering remote communities with sustainable energy, and enjoyed an entire forum devoted to torrefied wood. It is the last of these topics that Madison’s will focus on today, specifically because currently this seems like the most viable option for BC’s forest products industry to — in partnership with energy companies — capitalize on fibre opportunities.

The combination of timber company expertise in extracting low value fibre from the forest floor, that left behind after timber harvest, as well as the vast supply of dead and low-value cellulose in the wake of the mountain pine beetle infestation, makes British Columbia a prime location for biomass fuel production. The difficulty is in deciding which process in this new and emerging industry is the best option for individual companies and for the variety of regions.

One specific challenge for BC companies is that, in whichever form, this is strictly an export product. With abundant hydroelectric power, and large volumes of natural gas already exported, there is no market within BC for fuel or energy made from cellulose. Therefore those customers are in other regions. There is a huge market in Europe, which — due to government renewable energy standards — is only going to grow. However transportation costs and logistic challenges are significant. Regardless, bioenergy experts and industry are very bullish on a future for biomass fuel production partnerships between energy companies and BC’s forest companies.

BioEconomy

A very good place to start is with Rory Gilsenan, Chief Economist at Natural Resources Canada. Gilsenan gave a comprehensive presentation on the Canadian bioeconomy currently, and a projection to 2020.

The first speaker at the conference, Gilsenen explained, “Canadian pellet production is 2.9 to 3.2 million tonnes annually, with a little over 300,000 tonne capacity under construction. Canadian pellets account for 38 per cent of European pellet imports, at 983,065 tonnes annually. The projection for Europe in the next few years is a potential 25 to 150 million tonnes consumed annually,” detailed Gilsenen.

According to Martin Junginger of the University of Utrecht, who spoke on the Bio-Trade Long Term Outlook, approximately 650 pellet plants produced more than 10 million tonnes of pellets in Europe in 2009. Total European consumption was about 9.8 million tonnes, representing a modest 0.2 per cent of EU Gross Energy Consumption. While most markets of non-industrial pellets are largely self-sufficient, industrial pellet markets depend on the import of wood pellets. Following Junginger’s scenarios, additional 2020 demand for woody biomass varies from 105 million tonnes, based on market forecasts for pellets in the energy sector and a reference growth of the forest sector, to 305 million tonnes, based on maximum demand in energy and transport sectors and a rapid growth of the forest sector. Additional supply of woody biomass may vary from 45 million tonnes from increased harvest levels to 400 million tonnes after the recovery of slash via altered forest management, the recovery of waste wood via recycling, and the establishment of woody energy plantations in the future.

“The gap between domestic production and consumption of wood pellets in the EU has already increased 8-fold between 2008 and 2010. Green-X projections, with import of solid biomass from non-EU countries increasing 7 to 8-fold by 2020 compared to 2010, are therefore not unlikely,” said Junginger and the other authors of ‘RE-Shaping: Shaping an effective and efficient European renewable energy market‘, delivered to the European Commission in February 2012.

Pellets are a favoured method of biomass fuel production because it is easy for the European consumer, whether industrial, commercial, or residential, to use in existing burners and boilers. Logistical difficulties and the distances required to get pellets from BC to Europe mean that a viable economic model comes with the added step of torrefaction, whether to briquettes or pellets.

Torrefaction produces higher energy content by weight, and also improves the material for storage in large silos or other bulk containers.

In addition, pellets are well suited for co-firing with traditional fossil fuels, and work well with steam or electrical power generation, as well as with combined heat and power (CHP) facilities.

Grant Watkins of Fibreco Terminal in Vancouver explained, “70 to 80 per cent of the delivered price of pellets is in transportation logistics.”
Doug Bradley of the Canadian Bioenergy Association said in his presentation, “mixing coal and torrefied cellulose [in transport] makes it easier for the customer because they don’t have to do that themselves after delivery, and reduces the freight costs –due to larger vessel sizes and more frequent trips — to about one-third [of transporting pellets alone].”

There was a question from the floor about mixing loads in breakbulk transport, as there is apparently some new regulation coming out of Europe in this area. The concern for importers in Europe will apparently be around certification of the torrefied cellulose and whether it will still count as renewable if it enters Europe mixed with coal, so this is an issue to watch out for.

John Bennett of Global Bio-Coal then explained further, “We are building a facility at a new port on Watson Island off Prince Rupert, BC, which will be able to take in 2.5 million cubic metres of hog fuel annually. We will be shipping to Japan and will blend our product with coal to reduce transport costs significantly.”

Global Bio-Coal torrefies wood cellulose, which is then shaped into small, flat briquettes which “fit together better for transport” than larger briquettes or cylindrical pellets, said Bennett.

The amount of energy in torrefied cellulose makes long distance transportation much more cost-effective. As a comparison, green wood (chips) contain between 4,200 and 4,400 BTUs per pound, while for wood pellets it is 8,500, for torrefied wood it is between 10,000 and 11,000, and coal has between 10,000 and 12,000 BTUs per pound.

Another way of looking at it is: torrefied wood has a high net calorific value, of 19 to 23 megajoules per kilogram. The energy value of the product by weight is higher than regular pellets, which makes it more valuable to customers. Meanwhile, transportation logistics are more flexible, and less costly, for the producers.

There were many other processes discussed at the CanBio conference, all of which have potential to use the vast quantities of dead and decaying trees across large parts of BC as the mountain pine beetle infestation runs its course. Pyrolysis, gasification, community heating, CHP, biogas and syngas, are all getting fine tuned. Some of these new technologies have even scaled up from the pilot, or lab test stage, into commercial production. Others still have specific technical issues to work out. All have progressed in the past year.

The burning question on everyone’s mind is: feedstock. While many of these processes can use a mix, of wheat straw or corn stover or switchgrass or fruit bunches or sawmill, agricultural, or forest residue, and more, the preferred method is to use homogenous feedstock. This way the equipment can be best calibrated for efficiency, and the customer receives a product of consistent quality.

The fibre available in BC for salvage, and the residuals left behind after timber harvesting, need only be hammered and ground to become a perfect feedstock for biomass fuel production on a large scale.

Dust Safety Data Referred to Crown Counsel

The WorkSafeBC investigations into two deadly explosions at BC sawmills earlier this year have been completed, and results are passed on to Crown counsel in BC to review and possibly lay charges, the safety agency revealed Thursday.

Senior vice-president, Roberta Ellis, said to media it will now be up to Crown counsel to determine if charges are pursued under the Workers Compensation Act. Ellis stressed the WorkSafeBC investigations are not linked to any possible criminal charges, and there are no criminal investigations underway.

Madison’s caught up with Ellis Friday morning. She explained in a phone interview that, in addition to the press release about WorkSafeBC’s legal decision to pass the reports and evidence to Crown, is a one-page backgrounder which fully provides all the safety findings made so far, as well as preventive information.

Please go here for the latest on sawmill safety: http://tinyurl.com/cgwfno3

BC Hydro Right of Way Timber Update

The November 9th issue of your Madison’s Lumber Reporter included a story about the large volumes of timber being cleared in northern British Columbia for an electrical right-of-way that BC Hydro is building. Stakeholders complained that the fibre was simply being burned, and some logging contractors maintained they could not find lumber companies willing to ship the sometimes low quality logs to production facilities.

Owners of the newly reopened Skeena Sawmill in Terrace, BC, have stated they will buy all of the trees it can from those that have been cut down to make room for BC Hydro’s Northwest Transmission Line, according to the Terrace Standard Wednesday. The company is currently negotiating with local logging contractors and First Nations for a steady timber supply.

AFPA Reports

Values of lumber, panelboard, and pulp and paper manufactured by Alberta Forest Products Association (AFPA) member companies totaled approximately $615 million for the 3Q 2012. The value of production was up $66 million, or 12 per cent, from the same period last year, and increased roughly $33 million, or 6 per cent from the 2Q 2012, as the AFPA said in the press release.

AFPA-member companies produced 763 mmfbm of lumber in the 3Q 2012 with a value of $248 million. Part of this production came from the secondary manufacturing sector. Total production volumes increased 43 mmfbm, or 6 per cent, from the 3Q 2011, and values increased $75 million, or 43.4 per cent.

Alberta Forest Products Production

Compared to the 2Q 2012, lumber production volume dropped by 4 mmfbm, or 0.5 per cent, but stronger prices caused values to increase by $19 million, or 8.4 per cent.

AFPA-member panelboard operators produced 265 million square feet of 7/16 inch equivalent product in the 3Q 2012 valued, at $92 million.

Compared to the 3Q 2011, production was down roughly 8 million square feet, or 3 per cent, but stronger prices led to a $24 million, 36 per cent, increase in values. In comparison to the 2Q 2012, production dropped by 24 million square feet, or 8.2 per cent, but values increased by $7 million, or 8.6 per cent.

The AFPA’s pulp and paper sector total production for the 3Q 2012 was 393,800 air dried metric tonnes (ADMT) valued at $275 million. Production was up 14,500 ADMT, or 3.8 per cent, from the 3Q 2011, but a softer market caused values to decline by $33 million, or 10.7 per cent. Compared to the 2Q 2012, production increased by 31,000 ADMT, or 8.5 per cent, and values increased $6.4 million, or 2.4 per cent.

PwC Third Quarter Earnings Summary

Forestry
Canadian and US forest and paper products companies reported an overall improvement in net earnings for 3Q 2012 compared to 2Q, with timber, solid wood and packaging/tissue sectors posting generally better results than the pulp and graphic paper manufacturers, says a PwC report released Friday. Lumber and panel prices were supported through the quarter by the continued improvement in US housing starts. Pulp prices continued to decline through the quarter, but have likely bottomed.

Western Canadian based companies posted net earnings of $775.1 million. compared with net earnings of $28.4 million in 2Q 2012, and net losses of $243.8 million in 3Q 2011.

Eastern Canadian based companies posted net earnings of $14.8 million, compared to net losses of $36.1 million for 2Q 2012, and net losses of $82.8 million in 3Q 2011.

Ten of the largest US-based forest and paper companies reported net earnings of US $1.3 billion for 3Q 2012, up from US $1.1 billion in 2Q 2012, and down from US $1.5 billion in 3Q 2011.

Lousiana Pacific Buys

Louisiana-Pacific Corporation announced Wednesday that it has entered into a Letter of Intent with Canfor Corporation to acquire Canfor’s 50 per cent share in the Peace Valley OSB joint venture in Fort St. John, BC. By completing this acquisition, LP will become the sole owner of the Peace Valley OSB mill.
LP and Canfor currently jointly run the mill, with LP providing operational support while Canfor provides labour, fibre resource management and administrative services. LP already sells 100 per cent of the product made there under the LP brand, so customers will see no change in product quality or service.

Once the agreement closes, Canfor will continue to provide fibre resource management and temporarily provide administrative services during the transition.

The completion of this transaction is expected to occur by the end of this year.

The Peace Valley mill has an annual production capacity of 820 million square feet of OSB. It currently operates three shifts with plans to add a fourth shift in the first quarter of 2013 depending on market conditions.

Catalyst Paper Accepts Snowflake Bid

Catalyst Paper has accepted a qualified stalking horse bid from MLR Ventures, LLC as part of the sales process for disposition of the Snowflake facility and Apache Railway in Arizona.

The bid by the Stalking Horse is subject to higher and better offers.

Catalyst Paper expects to receive binding bids for the assets from qualified bidders on December 7, 2012 and expects to hold an auction among qualified bidders on December 17, 2012 in New York City.

The Snowflake facility is located in the foothills of the White Mountains in northeastern Arizona. The assets for sale include the equipment and other assets associated with the paper mill, approximately 19,000 acres of land and The Apache Railway Company.

Catalyst Paper permanently closed the Snowflake recycled paper facility effective September 30, 2012.

December 05, 2012

Light-Weight Semi-Trailers

In February 2011 the Quebec branch of forest research institute FP Innovations announced it had developed a lightweight logging truck, which allowed a 40 per cent increase in log volume per load.

Deloupe, out of Quebec’s Beauce region, has secured the exclusive rights to manufacture and distribute the semi-trailer. The new trailer will officially be launched in 2013, FPInnovations announced Wednesday. The company already manufactures semi-trailers made of aluminium or galvanized steel rather than high-resistance steel. The forthcoming composite stakes and bunks are expected to be in the highest price range.

As part of its Transformative Technology programme – which aims to transform Canada’s forest operations industry – FPInnovations wanted to conserve fuel and reduce the weight of traditional timber trailers. FPInnovations identified the potential to reduce the weight of traditional timber trailers by replacing steel stakes, the part that holds the timber inside the trailer, and bunks, the transversal part of the trailer’s main frame that joins the stakes, with a composite material.

Use of pultruded polyurethane composites makes it possible to dramatically slash vehicle weight. Frederic Boutin, lead researcher at FPInnovations, conveyed the benefits of weight reduction.

Composite Material

“By reducing the weight of the timber trailer, more material can be carried. A lighter timber trailer also requires less fuel to run, reducing operations costs,” said Boutin in a press release.

The post-and-crossbeam system developed by FPInnovations is comprised of composite materials and weighs about 40 per cent lighter than steel trailers, allowing an extra 450 kg of payload when hauling 8-ft. logs. Revenue per load increases while costs are reduced. Fuel savings when the empty truck returns could be between $5,000 and $6,000 per year, says FP Innovations.

The composite material used for the trailer consist of fibreglass and carbon fibre webbing with a resin that hardens like epoxy. The material is light, non-corrosive and impact-resistant. Seven years of research has gone into finding the right mix of materials.

The new timber trailer is unique not only for the weight reduction it achieved, but also for its impact resistance, which an equivalent product, generally made of steel, could not provide. Where a steel picket deforms permanently, the composite equivalent retains its shape very well. If the composite parts crack when being abused, it can still safely hold the load. Extensive testing, both static and dynamic, was performed on the new design in order to assure its safety.

Mat-Comp, an engineering consulting firm specializing in composite materials, came up with the design, the analysis, and the conception of the stakes and bunks, and also has taken part in the trials necessary for their certification. Their mandate consisted in reducing the weight of the vehicle while offering the same strength and longevity.

Serge Paré, of Mat-Comp explains that compared to steel or aluminium, composite materials allow for a 50 per cent or 30 per cent weight decrease, respectively.

“But weight isn’t everything, and composites are less affected by corrosion and more resistant to breakage due to impact. In the ‘resistance to rupture versus weight’ comparison, composites always win, although they cost 20 per cent more than the material they replace,” he explains.

The composite material is more flexible and regains its original shape even when hanging by a grapple. In an empty semi-trailer, the stakes seem to bend toward the inside. Under the weight of the load, the stakes straighten up and absorb the movements towards the outside. Furthermore, this product is painted grey, which gives added protection from sun exposure deterioration.

Composite materials are made of at least two immiscible materials, those that do not blend together, but also have a strong adhesion capacity: the same way that reinforced concrete is the product of cement and reinforced steel, composite materials often comprise a fibreglass or carbon canvas that acts as reinforcement and supports the mechanical efforts of various rigid resins such as epoxy.

The structural elements in the production of these “pultrusion composites” are combined by moulding plastic and metallic materials together in a process that involves pushing the material towards the entrance of the die and pulling it at its end.

It is important to consider the severe operating conditions for log trucks, both on pavement and on logging roads, when trying to calculate the amortization of equipment investments. Mat-Comp and FP Innovations aimed for a return on investment that included this factor, to be within two or three years for a part that will last a minimum of eight years. This objective can be realized more quickly as the price of diesel increases.

Deloupe hasn’t yet defined the parameters for the very specialized new model about to launch in 2013. Trials have mostly focused on the stakes’ behaviour in real-life situations, and on the bunks, Guillaume Samson, an engineer, reported in a company press release Wednesday. The trailer’s final configuration including length, width, height, suspension, steering axle, etc, will depend on the target market region, and whether that will be in the Maritimes, in Quebec or in other parts of Canada.

FP Innovations researchers have not yet been able to evaluate the degree of long-term wear on the composite elements. The elements are still too new and will need to be subjected to lengthy evaluations and subsequent changes. A crack in one of those composite elements won’t necessarily affect the structural integrity as it would in a steel part or a welding. Given the stakes for the industry, these are questions that warrant the full attention of regulatory agencies so the industry can move ahead with promising solutions for energy savings and improved profitability for forestry transportation.

Madison’s Investment Rx

This month’s issue of Madison’s Investment Rx has gone out to subscribers. The impact of post-tropical storm Sandy on already tight North American lumber inventories is examined, as well as the latest data on US and Canadian rail car loadings of forest products, and sawmill capacity and utilization rates.

Contact us any time to receive this vital and timely information.

Madison’s Timber Preview

This week’s issue of Madison’s Timber Preview looks at brand-new announcements of investment into biomass fuel. New operations to produce wood pellets in the US and Canada, as well as exciting new technology to make crude oil out of cellulose are examined.
Contact us any time to receive this vital and timely information. .

Contact us any time to receive this vital and timely information.

US Housing Starts, Existing Home Sales

Real estate agents and developers breathed a collective sigh of relief this week when the recent trend of improving US home building and sales continued. New data out of the Commerce Department Tuesday showed US housing starts increased 3.6 per cent to a seasonally adjusted annual rate of 894,000 units – the highest since July 2008.

As usual for the season, building permits fell 2.7 per cent to an 866,000-unit pace in October, after jumping 11.1 percent the prior month,
The National Association of Realtors said on Monday that existing home sales climbed 2.1 per cent last month to a seasonally adjusted annual rate of 4.79 million units. The nation’s inventory of existing homes for sale fell 1.4 per cent during the month to 2.14 million, the lowest level since December 2002.

US Housing Market

The drop in October permits reflected fewer applications for multifamily construction, while those for one-family units rose to the highest level since July 2008.

Construction of single-family houses eased 0.2 per cent to a 594,000 rate from 595,000 the prior month, the report showed.

Two of four regions had an increase in starts in October, led by a 17 per cent surge in the West, today’s report showed. In the Midwest, new construction rose 8.9 per cent. Starts dropped 6.5 per cent in the Northeast and 2.5 per cent in the South.

The National Association of Home Builders/Wells Fargo index of builder confidence climbed in November to a six-year high of 46, the Washington-based group said Monday. The group’s gauge of current single-family home sales advanced to the highest level since May 2006 as it jumped by the most since September 2002.

Purchases of multifamily properties — including condominiums — rose to a 570,000 pace, the most since January 2011, from 550,000. At the current pace of sales, inventories would be exhausted in 5.4 months, the lowest rate since February 2006.

Nationwide, the median price for a home resale was US$178,600 in October, up 11.1 per cent from a year earlier as fewer people sold their homes under distressed conditions compared to the same period in 2011. Distressed sales include foreclosures.

The price increase last month was measured against October 2011, and since then distressed sales have fallen to 24 per cent of total sales from 28 per cent.

Purchases climbed in three of the four regions, reflecting a 4.4 percent increase in the West, a 2.1 percent gain in the South and a 1.8 percent rise in the Midwest. Demand fell 1.7 percent in the Northeast as superstorm Sandy disrupted the market, the agents’ group said.

Sawmill Fire

Firefighter from at least two departments battled a blaze at the Alberni Pacific Division Mill in Port Alberni, BC, Thursday.

The initial call about a hog bin fire went out at 5:04 p.m. A second call, this time to all Alberni Valley fire departments, went out at 5:20 p.m., about a structure fire at the mill. Flames could be seen shooting into the air from a structure at the far end of the mill property.

Firefighters were still on scene at 6:20 p.m. No additional information was available.

WTO Rules

The World Trade Organization appears this week to have upheld a complaint against the Province of Ontario’s green energy program.

The complaint was made by the EU and Japan, which claim the province’s “feed-in tariff” program for its energy grid discriminates against foreign component manufacturers by declaring a minimum percentage of renewable energy goods and services be provided by Ontario-based companies.

According to the Green Energy Act, wind and solar projects in Ontario made between 2009 and 2011 must contain at least 25 per cent Ontario-made content, and projects coming on-stream in 2012 must be at least 50 per cent made in Ontario.

Japan and the EU alleged such tariffs are unfair, and a hindrance to free trade.

Although the WTO has yet to acknowledge any decision publicly, reports Monday suggest the affected parties have been notified of the organization’s decision to side with the complainants.

The WTO ruling is non-binding, meaning Ontario could simply ignore it and not face any monetary punishment. But such a move would likely be met with the implementation of tariffs against any Ontario-made goods in Japan and the EU. That would also be especially unlikely against the backdrop of a federal government trying to iron out a comprehensive free trade agreement with the European Union.

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