Lumber News Archives: June 2013

Lumber News Archives: June 2013

US Housing Market ; Madison’s Timber Preview ; Canadian Housing Starts ; Housing Starts, Japan ; New Cedar Shingle Mill ; Forestry Worker Fatality ;Cellulostic Biomass Fuel ; US Forest Service Wildfire Battle ; Canada Building Permits ; Rental Market, Architectural Billings, US ; Maryland Sawmill Fire Non-Residential Construction Uses for Wood ; CP Rail Sues Province of BC ; CEP and CAW Merge ; Ohio, Pennsylvania Lumber Mills Destroyed by Fire ; CWC Announces . . .;US Real Estate Market ; Madison’s Investment Rx ; Madison’s Timber Preview ; Labour Negotiations in British Columbia ; North American Wildfires ; Sawmill Worker Fatality, Fire ; Kalesnikoff, Hampton Increase Lumber Supply to Japan; Brookfield Sells . . .

June 26, 2013

US Housing Market

Dallas Federal Reserve President Richard Fisher’s statements a few weeks ago against continued bond buying by the US government sparked a flurry of analysis and opinions. And counter-opinions.

The US central bank is buying US$85 billion of Treasuries and mortgage-backed securities each month in a bid to boost growth and spur hiring by pushing down long-term borrowing costs. Several pundits have been saying for months that the government should stop trying to manipulate the market and allow actual supply-and-demand to set house prices.

“In my view, the housing market is on a self-sustaining path and does not need the same impetus we have been giving it,” said Fisher May 16.
While bolstering the sector was critical early on in the economic recovery, Fisher said, he now worries that the Fed’s purchases of housing-backed bonds could distort the market and could make it more difficult for the Fed to pare down its balance sheet when the time comes.

Meanwhile, many are sounding warnings that any perceived recovery in US home sales is being driven upward by institutional investors. According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, of May 24, investors purchased 69 per cent of damaged properties, or foreclosed properties in need of repair, in April 2013, while first-time home buyers accounted for only 16 per cent of damaged purchases. However the very same report also says that the share of distressed properties in the housing market fell to a three-and-a-half-year low in April.

Housing Recovery? Or Delusion?

Home purchases involving foreclosed properties or short sales fell to 33 per cent in April, based on a three-month moving average. That was not only down from 35.6 per cent in March, but also a very sharp drop from the 43.6 per cent distressed property market share seen a year ago, said HousingPulse.
HousingPulse also found that investors accounted for 21.6 per cent of all home purchase transactions tracked in April, based on a three-month moving average. That was the lowest investor share recorded since November.

Clearly, after so many years of sheer turmoil — first up then way, way down — the US home sales scenario is not going to suddenly straighten out. Home repossessions in the US jumped 11 per cent in May, after declining for the previous five months, as rising prices and limited inventory for sale across the country spurred banks to complete foreclosures, according to market researcher RealtyTrac Thursday. At the same time though, the number of US properties with foreclosure filings fell 28 per cent in May from a year earlier.

Eric Workman of Illinois-based Mack Cos, which aggregates single-family rental homes and resells them to individuals and institutional investors, said to Bloomberg Thursday, “Banks are more willing to move to the final stage of foreclosure because there is sufficient demand and prices are improving.”
Suzanne Mistretta, an analyst at Fitch Rating Services, was quoted by the Wall Street Journal in the beginning of June as saying, “The [housing price] growth is being propelled by institutional money… The question is how much the change in prices really reflects the market demand, rather than one-off market shifts that may not be around in a couple of years.”

As with most things, digging through the varied wisdom can get very confusing. One thing that everyone can agree on, however, is this: first-time home buyers, who are desperately needed in any housing recovery, are missing from the action. This is largely due to continued concern both over unemployment and difficulty in getting credit. Average Americans need to be involved in the US housing market because they provide liquidity and push up consumer spending.
In terms of home-buying financing and mortgages, there might be some ominous signs emerging. Findings released last week by a US congressional committee show government mortgage-insurance agency the Federal Housing Administration (FHA) could face a US$115 billion shortfall – at least, if the housing market tanks by 20 per cent again, said Gary Gately, Associate Editor at Money Morning Wednesday. The figure is so large the FHA has worked to keep it under wraps for as long it could, Gately said.

The FHA doesn’t originate mortgages or lend money, but provides government-backed insurance to lenders against mortgage borrowers defaulting, and has taken on a much bigger role after Fannie Mae and Freddie Mac had to be taken over by the government.

Edward Pinto, a senior research fellow at the American Enterprise Institute think tank and a former chief credit officer for Fannie Mae, told Money Morning that under generally accepted accounting principles, the FHA, which now insures over US$1.1 trillion in mortgage loans, has a net worth of negative US$27 billion.

“The FHA is a mild to moderate recession away from catastrophic losses – losses that would need to be absorbed by taxpayers,” Pinto said. Such losses could total US$50 billion. The FHA, he says, has “no cash reserves to fall back on to protect the taxpayers, and that is the problem.”

The FHA is looking to shore up its finances in the face of a projected shortfall of US$16.3 billion due, in part, to reverse mortgages that have gone into default. In response to that issue, the US House of Representatives passed a bill Wednesday that would give new authority to the agency to tighten terms for reverse mortgages, where it has faced significant losses.

Yet another indicator may suggest that the US real estate market is indeed improving. More US homeowners emerged from underwater on their mortgages in 1Q 2013 as a recovery in housing lifted prices, a report from CoreLogic showed Wednesday. There were 9.7 million properties underwater – whose owners owed more on the mortgage than the homes were worth – during the quarter, down from 10.5 million in the previous three months, the data analysis firm said. That amounts to 19.8 per cent of all properties with a mortgage, down from 21.7 per cent.

In the past year, 1.7 million borrowers have regained positive equity, the report said. When home prices neared a bottom in late 2011, there were 12.1 million properties that were underwater.

The improvement is due largely to rising home prices, though foreclosures and short sales have also eliminated some underwater households, said CoreLogic.

Madison’s Timber Preview

This week’s issue of Madison’s Timber Preview looks the latest financial analyses of the US and Canadian timberland space. Potlatch Corp, Weyerhaeuser, Deltic Timber, and Acadian Timber are examined.

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Canadian Housing Starts

Canadian housing starts jumped much more than expected in May from April, the Canada Mortgage and Housing Corp said on Monday, in the latest sign that the broader economy is gaining momentum in the second quarter.

The seasonally adjusted annualized rate of housing starts was 200,178 units in May, an increase from 175,922 in April. The April figure was revised upward.

The number of housing starts in cities increased by 14.6 per cent in May. Urban starts were led by a 22.2 per cent rise in multiple starts to a seasonally adjusted annualized rate 114,346 units.

The number of single homes started in cities increased by 3.0 per cent to 62,888 units in May.

Canada Housing Starts

Regionally, May’s seasonally adjusted annual rates of urban starts increased in Atlantic Canada and Ontario, and were essentially unchanged in the Prairies. Urban starts decreased in British Columbia and Quebec.

Rural starts were estimated at a seasonally adjusted annual rate of 22,944 units for the month. That was higher than the 21,330 starts estimated in April. The housing starts data was the most recent report to suggest Canadian economic growth is picking up after struggling in the second half of 2012. A separate report June 7 showed the economy added 95,000 jobs in May, the second-biggest gain in 37 years.

With the pickup in starts, residential construction may contribute to Canadian economic growth in the second quarter for the first time in four quarters, wrote
Krishen Rangasamy, senior economist with National Bank.

Housing Starts, Japan

April housing starts in Japan rose 5.8 per cent compared to one year ago, to 77.894 units, according to the Japan Lumber Reports and Japan Lumber Journal. Seasonally adjusted starts were 939,000 units.

New building of owner’s units increased in all areas of Japan to 28,357 units, a 17.5 per cent improvement compared to April 2012 and 30.3 per cent compared to March.

Detached units built for sale increased by 15.4 per cent compared to one year ago, to 10,559 units. This is 14.9 per cent more than the previous month.

New 2×4 units were 9,912, up 25.9 per cent compared to March and a 16.8 per cent improvement over one year ago.

A booming stock market, rising mortgage rates, and a looming tax increase next year were credited for the improvements.

Japan Housing Starts

By area, housing starts in Japan grew in the Tokyo metropolitan area by 7.9 per cent, the Chubu area by 12.2 per cent and the other areas by 13.1 per cent, says the Japan Lumber Journal.

By structure, seasonally adjusted starts of wooden houses were 43,761 units and non-wooden houses were 34,133 units. As a result, the percentage
of wooden houses increased 0.7 points from the previous month to 56.2 per cent of total new construction.

New Cedar Shingle Mill

A Georgia-based company that manufactures cedar shingles is planning to locate a manufacturing plant in northern Maine that will create 78 new jobs, according to Bloomberg Tuesday.
Gov. Paul LePage and Bryan Kirkey, CEO of Ecoshel, announced that the shingle plant will be located at the former Levesque sawmill in Ashland, ME.

Ecoshel has been test-manufacturing its new line of cedar shingle panels for roofing and siding at a facility in Gainesville, GA.
According to a prepared statement, the company decided to build its permanent manufacturing plant in Maine because it is close to an abundant northern
white cedar supply and to the country’s largest cedar shingle markets, in New England.

Forestry Worker Fatality

The British Columbia Coroners Ser- vice has confirmed the identity of a man who died while working in a logging camp at Kildonan on west Vancouver Is-
land on June 11, 2013.

The man is Stephen Mark Whitmore, aged 46, from Courtenay, BC. Whitmore was operating a wheel loader at the worksite, when the equipment tipped over. He was deceased at the scene.

The BC Coroners Service and WorkSafe BC are continuing to investigate this death.


Madison’s Investment Rx

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June 19, 2013

Biomass Fuel

An insect with a name reminiscent of the original Star Trek series, the gribble, is responsible for one of the latest breakthroughs in making fuel out of wood. Using advanced biochemical analysis and x-ray imaging, researchers in Portsmouth, UK, and at the National Renewable Energy Laboratory in the US, have identified the enzyme that allows gribbles to digest enormous quantities of wood. In January 2009, British scientists discovered that the wood-boring crustacean, which spends much of its time munching through pilings that hold up piers, uses enzymes in its gut to break down wood and scientists want to employ it to produce climate-friendly biofuels.

The work has formed part of a £27 million project to make second-generation biofuels a commercial reality within 10 years. The new biofuels would not lead to a net release of carbon dioxide but also won’t compete with land for edible crops. The research money came from the UK government-backed Biotechnology and Biological Sciences Research Council and a coalition of 15 industrial partners, including BP and Ceres.

One of the major challenges for biologists is to find chemical enzymes that can efficiently break down cell walls which contain cellulose and lignin. The gribble, a tiny shrimp-like crustacean, seems particularly good at this task. Unlike creatures such as termites, however, gribbles have no helpful microbes in their digestive system to aid in digesting wood – they themselves possess the enzymes necessary for converting it to sugar. The isopods’ digestive tracts are dominated by enzymes that attack polymers that make up wood. The enzymes attach to a long chain of complex sugars and reduce it to easily fermented sugars.

That enzyme could be manufactured using the same methods that produce the enzymes in washing detergents, which would reduce the cost of development.

New Technology, Developments

Enzymes are proteins that serve as catalysts, in this case one that degrades cellulose. Their function is determined by their three-dimensional shape, but these tiny entities cannot be seen with high-powered microscopes. Instead, researchers made crystals of the proteins, where millions of copies of the protein are arrayed in the same orientation. This information will help the researchers to design more robust enzymes for industrial applications. While similar cellulases have been found in wood-degrading fungi, the gribble-enzyme shows some important differences. In particular, the gribble cellulase is extremely resistant to aggressive chemical environments and can work in conditions seven times saltier than sea water. Being robust in difficult environments means that the enzymes can last much longer when working under industrial conditions and so less enzyme will be needed.

“[Gribbles are] single-handedly responsible for gnawing away at several piers on our south coast and, within its intestinal tract, are enzymes that can unlock some of the polymers [in wood-based materials],” said Professor Katherine Smart, a plant scientist at University of Nottingham and one of the leaders of the project, to The Guardian in January 2009.

The findings, published in Proceedings of the National Academy of Sciences, will help researchers reproduce the enzyme’s effects on an industrial scale which is likely to lead to the generation of liquid biofuels from sustainable resources.

Dr. McGeehan, of Portsmouth, said to the University of Portsmouth News Tuesday, “This is a truly collaborative and exciting breakthrough. To create liquid fuel from wood and straw, the polysaccharides – sugar polymers – that make up the bulk of these materials have to be broken down into simple sugars. These are then fermented to produce liquid biofuels, but it [has been] a difficult and expensive process.”

Researchers have transferred the genetic blueprint of this enzyme to an industrial microbe that can produce it in large quantities, in the same way that enzymes for biological washing detergents are made. By doing this they hope to cut the costs of turning woody materials into biofuels.

Meanwhile, the US Environmental Protection Agency issued May 21 a Notice of Proposed Rulemaking for a series of potentially beneficial modifications to the federal Renewable Fuels Standard program, requiring that a minimum annual volume of biofuels be used in the national transportation fuel supply. The proposed rule, if finalized, could have myriad effects on the economics of biofuel and biogas projects and the volume of qualifying advanced fuels brought to market in coming years. The EPA’s proposal is also to permit electricity, used to charge electric vehicles, generated from certain kinds of biogas to create saleable Renewable Identification Numbers.

According to research published in a recent Forest Products Journal special issue, two processes that turn woody biomass into transportation fuels have the potential to exceed current Environmental Protection Agency requirements for renewable fuels. One is a gasification process using trees thinned from forests, and the other is a fermentation process using plantation-grown willows which reduces greenhouse gas emissions by 70 per cent or better compared with gasoline. In contrast, producing and using corn ethanol reduces greenhouse gas emissions 24 per cent compared to gasoline, says Forest Products Journal.

Elsewhere, engineers at Iowa State University are using high-frequency sound waves to break down plant materials in order to cook up a better batch of biofuel. Research by David Grewell, associate professor of agricultural and biosystems engineering, and his colleagues Melissa Montalbo-Lomboy and Priyanka Chand, has shown that “pretreating” a wide variety of feedstocks — including switch grass, corn stover, and softwood — with ultrasound consistently enhances the chemical reactions necessary to convert the biomass into high-value fuels and chemicals, according to Phys.org Friday.

The team will present its findings at the 21st International Congress on Acoustics, held June 2 to 7 in Montreal, QC.

In one example of ultrasound’s positive impact on biofuel production, the Iowa State researchers found that they could significantly increase the efficiency of removing lignin from biomass in solution. Lignin is the chemical compound that binds cellulose and hemicellulose together in plant cell walls. Commonly, enzymes or chemicals are used to remove it from biomass and allow the freed sugars to be dissolved for further processing into biofuel. Grewell and his colleagues found that pretreating instead with ultrasound makes lignin removal so efficient that sugar dissolution occurs in minutes rather than the hours needed with traditional mixing systems.

The potential cost savings for this method, says Grewell, are very encouraging.

“Economic models,” he explains, “have shown that once implemented, this technology could have a payback period of less than one year.”
Grewell and his colleagues report another application for ultrasound in biofuel production, showing that they can accelerate transesterification, the main chemical reaction for converting oil to biodiesel. In one case, the researchers found that subjecting soybean oil to ultrasound transformed it into biodiesel in less than a minute, rather than the 45 minutes it normally takes. Similarly, Grewell’s team found that yeast populated with sugar and starved with glycerin, a co-product of biodiesel production, could prodfuce high yields of oil that could be extracted and simultaneously converted to biodiesel with ultrasonics in less than a minute. This is a dramatically faster and less complicated method than traditional techniques requiring multiple steps and relatively long cycle times, says Phys.org.

In yet another announcement, genetic engineers at the Vienna University of Technology have found a method of producing biofuels from lignocellulosic materials, such as wood waste and straw, using fungi. Currently lignocellulosic waste such as sawdust can only be used to produce biofuel if the long cellulose and xylan chains can be successfully broken down into smaller sugar molecules. To do this, the researchers said that fungi, which by means of a specific chemical signal can be made to produce the necessary enzymes, are used. However, because this is very expensive, the university said that it has been investigating the molecular switch that regulates enzyme production in the fungus.

As a result, the institution claimed this week that it is now possible to manufacture genetically modified fungi which produce the necessary enzymes fully independently, thus making biofuel production significantly cheaper.

US Forest Service Wildfire Battle

Assessments in southern California show that the number of homes destroyed by the Powerhouse fire this week were significantly more than originally estimated. Officials said Thursday 24 homes were lost, more than double the previous estimate, according to the Los Angeles Times Friday.
By Thursday, aided by cooler temperatures and calmer winds, firefighters had contained 83 per cent of the wildfire. They expected to be able to fully surround the fire by Monday.

Meanwhile, the US Forest Service will soon be helping California firefighters with a specifically equipped helicopter, for the first time in nearly 40 years, to combat wildfires at night, the agency announced this week. On Thursday, the USFS also announced it has three next-generation air tankers, one of which will be fighting wildfire in California Saturday morning.

US Wildfire Settlement

Elsewhere, PG&E and its contractors have agreed to pay US$50.5 million to settle Department of Justice allegations that the utility was responsible for two wildfires that scorched 18,000 acres of national forest land in Northern California, the US Attorney’s office in Sacramento announced Thursday.

DOJ alleged in a lawsuit that a dropped cigarette lit by a work crew hired by a PG&E contractor ignited a 2004 fire that burned 13,000 acres of the El Dorado National Forest for 17 days in 2004. The utility and VCS Sub Inc denied responsibility in settling.

PG&E also settled a second lawsuit alleging the utility’s transmission lines were too close to a pine tree and ignited a 2008 blaze that torched 5,000 acres in Mendocino National Forest.

VCS Sub, a subsidiary of Houston-based Quanta Services, doing business as Provco located in Yuba City, will pay US$45 million to settle the lawsuit.
There was no one available at the three businesses to comment on the settlement, according to several US media sources.

Canada Building Permits

Canadian municipalities issued building permits worth $7 billion dollars in April, up 10.5 per cent from March, said Statistics Canada Wednesday. The advance in April was the fourth consecutive monthly increase. The recent upswing came after a downward trend in the total value of building permits that began in the fall of 2012.

The advance in April came largely from higher construction intentions for multi-family dwellings in Ontario, British Columbia and Quebec.

Building Permits, Canada

Construction intentions for residential dwellings rose 21 per cent to $4.4 billion, said Stats Can Wednesday. It was the second straight monthly increase and the highest level in 10 months. All provinces posted gains except Alberta and Nova Scotia. These two provinces had posted large increases in March.

In the non-residential sector, the value of permits fell 3.6 per cent to $2.6 billion, following two consecutive monthly gains. Declines were recorded in five provinces, with Alberta and Ontario posting the largest decreases. New Brunswick registered the largest increase, followed by Quebec and British Columbia.

Rental Market, Architectural Billings, US

The most recent data from the Survey of Market Absorption of Apartments showed that completions of privately financed, nonsubsidized, unfurnished, rental apartments continued to climb in 4Q 2012, said the US National Association of Home Builders Thursday. The reported 31,600 completions in buildings with 5+ units were slightly above the 3Q level and has more than doubled since 4Q 2011.

US Architectural Billings

Households continue to show more confidence in the recovering housing market, investing in more outdoor amenities and larger homes despite strained lot sizes, according to the American Institute of Architects Friday. Residential architects report that home sizes have bottomed out and have begun to bounce back.

Residential architects reported a dramatic shift in home sizes during the housing downturn. In 2005, after several years of growth, 42 per cent of residential architects reported home sizes to be increasing, while only 13 per cent reported them to be declining. The share of respondents reporting size increases steadily declined during the downturn. By 2010, less than 3 per cent were reporting increased sizes, and almost 57 per cent were reporting decreasing home sizes.

Since then, the share reporting increases in home sizes has been slowly but steadily increasing. In the current survey, more than 12 per cent are reporting increases. Double this share are reporting that home volumes (e.g., ceiling heights, two-story entryways) are increasing, with less than 10 per cent reporting declines. Related to the increased use of space in the home, 38 per cent of respondents report that finishing attics or basements into living space is increasing in popularity.

While residential architecture firms have faced a bumpy recovery, recent numbers indicate that improvement is accelerating. The billings index for residential architects during the first quarter was almost 67, indicating the strongest growth for these firms since 2005.

Maryland Sawmill Fire

Officials say a two-alarm fire caused more than US$1 million in damages to a Charles County, MD, sawmill Thursday afternoon.
According to Deputy State Fire Marshal Bruce Bouch, the accidental blaze started just after 1 pm near an electric motor attached to the mill. Employees were working at the time, and workers tried to put out the fire, but it spread and the building was evacuated.

More than 100 firefighters from Charles, Calvery, St. Mary’s and Prince George’s Counties responded to the fire, which was extinguished within two hours.
Bouch said the sawmill was heavily damaged, as were three trailers on the property at the time of the fire.

No injuries were reported.


Madison’s Investment Rx

Valuable insight combined with the latest statistics on US and Canadian lumber production, log harvests, log prices, export levels and more. A concise overview of the latest happenings in the forest industry. Download a free sample copy!

June 11, 2013

Non-Residential Construction Uses for Wood

Ground-breaking on previously announced cross-laminated timber (CLT) tall wood buildings in the UK and Australia have already begun. Meanwhile, more ambitious projects are being planned for several jurisdictions globally. And in an exciting new development, a Kansas State University civil engineering assistant professor has developed a way to make concrete from cellulose.

Approval was given Wednesday for the construction of the Norwich Enterprise Centre, an ?8 million development launched by the University of East Anglia, which is set to be the UK’s best commercial green building. The building will be home to academic and commercial offices while also serving as home to the Centre for the Built Environment, which will test sustainable building materials and promote their usage and is the first commercial development in Britain to obtain both Passivhaus and BREEAM Outstanding ratings.

The project will feature a broad range of energy efficiency and sustainability measures, including triple-glazed windows, photovoltaic panels, solar heating, and mechanical ventilation. In addition to efficiency measures for enhancing energy performance throughout the life of the building, the project will use natural materials such timber and glulam frames fitted with prefabricated straw and reed cladding panels.

Work on the building is slated to commence in the summer, with a scheduled opening date of January 2015.

Meanwhile, TimberFirst’s inaugural building design project in the UK, the CLT superstructure for WoodBlock House, was completed on site as scheduled, the agency announced May 9. The CLT structure was supplied and installed by Metsä Wood and took 10 days to build.

In Australia, construction of the Docklands Library and Community Centre in Melbourne, Australia, is due for completion in late 2013 and is set to open to the public in March 2014. The three-storey library is being constructed using CLT and reclaimed hardwood. Installation of the CLT is well underway, with both lift cores now completed.

Please refer to the March 11, 2011 issue of your Madison’s Lumber Reporter for details on the Melbourne and other CLT building projects.

High Rise Buildings, Concrete

According to Australian builder Lend Lease’s estimates, the use of CLT in the Dockside project provided similar levels of structural integrity as traditional concrete buildings while delivering better thermal performance and reducing the building’s projected life-cycle CO2 emissions by around 1,400 tonnes. Being largely based on pre-fabrication, the CLT construction process involved less material on site and was cleaner, simpler and faster – four months faster, Lend Lease business manager Andrew Nieland said to DesignBuild Source April 2.

Going forward, the company says it expects to use the material on 30 to 50 per cent of its apartment building pipeline.

On to Finland, where that country’s first public building constructed from massive CLT wood elements is being built at the Nature Centre Haltia in Espoo, southern Finland. Located in the Nuuksio National Park, the €18 million building will host exhibitions about the natural world in different parts of Finland. Haltia represents a new type of environmentally conscious, modern, Finnish architecture. All the building’s structures are made of wood apart from those below ground level, the Park announced Tuesday. Up to 200,000 visitors are expected to visit the building annually.

And in Canada, what is thought to be the first such commercial installation in the city of Ottawa, CLT is being used on a Playvalue Toys warehouse/retail facility, according to Timber and Sustainable Building May 10. The European-manufactured product is being used for the wall construction. Playvalue Toys president Doug Jones said he opted to incorporate CLT after being introduced to the product at an Ontario Wood WORKS! seminar in November 2011. He said it offered many benefits, including thermal efficiency, aesthetic appeal, and “very good” fire performance.

David Moses, principal in Moses Structural Engineers, said integrating CLT load-bearing walls with steel deck and open-web steel joists on the project was straightforward.

“It did require us to develop a few new design details for connecting the two materials and also new guidelines for locating steel components relative to joints in the CLT wall panels,” he said. “We also had to keep the design simple for installing the steel, especially since the high parapets were part of the CLT wall panels and the steel joists were dropped into place after the load-bearing CLT walls were installed.”

Professional engineer Michelle Maybee, a technical adviser to Ontario Wood WORKS!/Canadian Wood Council, said she was aware of other design teams that were considering using CLT.

“Projects that use CLT will increase our knowledge of the product, both the benefits and the challenges, and will demonstrate that wood products and systems can be cost-effective solutions for non-residential projects,” she said.

Cross-laminated timber is also being incorporated in the design of the new Laurentian University School of Architecture in Sudbury. CLT will be installed in Phase 2, scheduled to get under way this autumn.

Elsewhere, the Canadian Wood Council on May 6 issued a request for an Expression of Interest for Canadian developers, institutions, organizations, and design teams willing to undertake an innovative approach to designing and building high-rise wood demonstration projects.

Please see Page 7 for details.

Still in Canada but on the west coast, CLT was used in the design of the canopy for the Earth Sciences Building at UBC, which wraps around the south end of the building. It was additionally used for the roof and link bridge erected later in the construction schedule. The expansive 1,150 square metre canopy appears as a pristinely flat timber plate that emerges from the building and cantilevers past a glulam colonnade, giving the appearance that the entire canopy is made from a single piece of CLT. This illusion is achieved by locating all supporting beams on top and hanging the panels with self-tapping screws, effectively creating an upside-down structure. The 3-metre double cantilever corners are strategically reinforced with steel elements located on top or concealed in the depth of the panels.

In perhaps the most interesting news recently, researchers continue to develop biobased construction materials — from a higher-strength concrete to quickly degrading items — used during construction. Kyle Riding, a Kansas State University civil engineering assistant professor, has found a way to use the leftover waste from the cellulosic ethanol process, called high-lignin residue, to produce a concrete that is stronger and has less carbon dioxide emissions than traditional concrete.

Riding used the high-lignin residue to create a high silicate that can be added to cement to strengthen the concrete.

Riding tested the finished concrete material and found replacing 20 per cent of the cement with cellulosic material after burning increased the strength of the concrete by 32 per cent. The high-strength concrete made with cellousic leftovers could be commercialized at any time, he noted.

Concrete is not the only biobased construction materials being researched. David Grewell, Iowa State University associate professor in the Department of Agricultural & Biosystems Engineering and Chair for the Biopolymers & Biocomposites Research Team, is working on biobased materials that degrade quickly which could be used during construction. Some examples of that would be plant pots or mats used to control soil erosion. The biobased materials offer the benefit of self fertilizing as they degrade, he notes.

The Team’s researchers are also looking at making graphite fibres from lignin from the cellousic ethanol process. Grewell says the graphite fibers could be used to make wind-turbine blades. Yet another researcher on the Team is looking at biobased asphalt.

CP Rail Sues Province of BC

Canadian Pacific Railway has launched an unprecedented lawsuit to reclaim timber and mineral rights on hundreds of thousands of acres of land in British Columbia, according to the CBC and Canadian Press Friday. In a claim filed in BC Supreme Court Thursday, CP Rail names the province and hundreds of unnamed contractors and landowners who harvested trees or quarried stone on CPR-owned lands, mostly located in the Okanagan and Kootenays.

CP claims it never gave up resource rights on more than 800,000 acres of land it transferred to private owners and the province.

CP Rail’s BC Lawsuit

Contracts that CP made with the province as far back as 1892 allowed CP to retain timber and mineral rights on 830,000 acres of railway land when it was sold to private companies and the province, according to the lawsuit.

CP contends it holds legal title to the trees and stone on those lands, and is seeking compensation for the removal and sale of those resources. It says the groups were negligent when they allowed harvesting, quarrying or sale of the trees and stone without CP’s consent.

CP’s director of public affairs Breanne Feigel said to CBC the company and province spent five years trying to reach an out-of-court settlement with no success, so now they are turning to the courts to settle the issue.

CEP and CAW Merge

After months of internal debate and testing, the Canadian Auto Workers and the Communications, Energy and Paperworkers unions have merged. The boards of the two unions approved the name and logo, which has remained a closely guarded secret.

Dubbed Unifor, the merger unites more than 300,000 workers in the auto, pipeline, airline, newspaper, health care, and aerospace segments of the Canadian economy, and creates the biggest union in Canada’s’s private sector. The two unions plan a founding convention in late August, when they will vote on a constitution and elect leaders.

Unifor

The Communications, Energy and Paperworkers Union of Canada is the largest union in several key sectors of Canada’s economy, including forestry, energy, telecommunications, and media. The union’s 110,000 members work at a wide variety of jobs in hundreds of different workplaces across the country.
The Canadian Auto Workers union is one of the largest private sector unions in the country with approximately 193,000 members from coast to coast to coast.

Madison’s caught up with CEP President Dave Coles for a phone interview Friday.

“The last hurdle to finalize this agreement is the membership endorsement at our meeting on the Labour Day weekend,” explained Coles. “The final draft of our new constitution was approved on Wednesday, ballots will be mailed to members June 15.”

When asked by Madison’s, Coles indicated that union membership is expected to support the merger.

“We have had a lengthy consultation process, and held town halls which drew over 20,000 members, both in physical presence and remotely over the internet.

“This is a historic deal,” continued Coles. “It’s not just about the increased membership, we are changing the model first by increasing the economic sectors our membership covers, and second by representing those who were never included before; specifically the self-employed, contractors, and freelancers.”

Ohio, Pennsylvania Lumber Mills Destroyed by Fire

Ohio State Fire Marshals are looking for information about a sawmill fire in Vinton, OH. According to a news release, Jackson Pallet Company, on State Route 124, caught fire on Sunday night. When first responders got to the scene, the sawmill was fully involved and burnt to the ground.

“It is imperative that someone come forward with information,” said State Fire Marshal Larry Flowers.

In central Pennsylvania, a blaze destroyed a lumber mill, but no one was hurt.

Fayette Fire Company spokesman Glenn Kersetter said the Friday morning fire at L&R Lumber in McAlisterville sent a plume of smoke into the air that could be seen two miles away. Kersetter says the facility turns trees into lumber products and employs about a dozen people. The structure that was completely destroyed is about 140 feet by 50 feet.

Kersetter says the cost of the damage is estimated at US$1.1 million. The cause of the fire is under investigation.

CWC Announces . . .

The Canadian Wood Council (CWC) issued a request for an Expression of Interest (EOI) on May 6 for Canadian developers, institutions, organizations and design teams willing to undertake an innovative approach to designing and building high-rise wood demonstration projects. With funding support from Natural Resources Canada, the goal of this initiative is to link new scientific advances and data with technical expertise to showcase the application, practicality and environmental benefits of innovative wood based structural building solutions.

The objective of the EOI is to identify building project(s) which safely and successfully demonstrate the use of wood as a viable structural element/system in buildings of 10-storeys and more.

National submission inquiries can be sent to Oscar Faoro of the CWC at ofaoro@cwcdemoproject.ca, while companies in British Columbia can contact Werner Hofstatter of Wood WORKS! BC at whofstatter@wood-works.ca.

Hofstatter explained to Madison’s in a phone interview Friday that lumber producers are already making products which will be suitable for these projects.

“It’s not just about cross-laminated timber, laminated veneer or strand lumber, or glulam,” Hofstatter said. “Any wood products are suitable.
“There is $5 million in funding for one or more ten-storey or more wood building(s). Alternate solutions will have to be found under existing building codes.”

The full EOI document and contact details can be found on the project website at: www.cwcdemoproject.ca .

June 05, 2013

US Real Estate Market

After posting some encouraging data during the depth of winter, US housing starts seemed to slide a little bit this spring. Extremely poor spring weather across most of North America was credited for the slowing increase in new home building, especially the populous eastern areas of the US. The most recent housing starts release out of the US Commerce Dept, on May 14, indicated that building permits were up more than 14 per cent over the previous month, and almost 30 per cent over April 2012, to 1.017 million which was the highest level since June 2008. Permits for single-family homes compromise about two thirds of the total. These rose 3 per cent to a 617,000-unit rate, the highest since May 2008.

Still, some potential home buyers remain nervous, while economists are casting about looking for some method of analyzing the data.

A good place to start is home sales. Both existing and new home sales figures in the US were released this week, separately, and all indications are that the real estate market south of the border is continuing to recover.

Sales of previously owned US homes climbed in April to the highest level in more than three years even as the market remained constrained by a lack of inventory and strict borrowing rules, the National Association of Realtors reported Wednesday. Purchases of existing houses increased 0.6 per cent to an annual rate of 4.97 million, the most since November 2009. The median price rose 11 per cent compared with April 2012. This is the fifth consecutive month that property values advanced more than 10 per cent year over year.

Home Building, Sales

The median price of an existing home climbed to US$192,800 last month, the highest since August 2008, from US$173,700 a year earlier, the report showed.

“The price increase at double digits is not healthy because incomes are rising at less than 2 per cent,” NAR Chief Economist Lawrence Yun said at a news conference as the figures were released. “We do need to moderate the price growth. The only way for that to occur is for more supply to come on to the market.”

The lack of supply is overshadowing other developments that point to a pickup in demand. The median number of days a house was on the market before it sold dropped to 46 days in April from 62 days in March, Yun said. Foreclosures and other distressed sales accounted for 18 per cent of the total, the lowest share in data going back to October 2008. This was down from 21 per cent in March, and 28 per cent a year ago.
Yun, who pegs US existing home sales growth at 5 million this year, 5.3 million next year, and 5.7 million in 2015, said investment and vacation homes are experiencing rising interest among buyers.

“Growth in household wealth will help vacation home purchases,” he added.

Foreclosures accounted for 11 per cent of sales and sold for an average discount of 16 per cent below market value. Short sales accounted for 7 per cent and sold at a 14 per cent discount.

“That’s the lowest reading since the NAR started collecting these data in 2008,” wrote Capital Economics’ Paul Diggle. “Just 15 months ago, distressed sales accounted for 35 per cent of all existing home sales. Put another way, distressed sales are down 29 per cent compared to last year while non-distressed sales are up 25 per cent. The market is starting to take on a semblance of normality.”

Diggle also pointed out that inventory, while low, is rising as rising home prices are boosting confidence.

“The increase in the seasonally-adjusted months’ supply of unsold stock in April, from 4.9 to 5, was slight and not a threat to continued house price gains.”

First-time buyers accounted for 29 per cent of purchases last month, the lowest share in more than two years.

On Thursday the US Census Bureau and the Department of Housing and Urban Development jointly released data showing that sales of new single-family houses in April 2013 were at a seasonally adjusted annual rate of 454,000, a 2.3 per cent improvement over the revised March rate of 444,000, and 29 per cent above the April 2012 estimate of 352,000. The seasonally adjusted estimate of new houses for sale at the end of April was 156,000. This represents a supply of 4.1 months at the current sales rate. There were 156,000 new houses on the market at the end of the month, the most since October 2011.

The median sales price of new houses sold in April 2013 was US$271,600 which is up 14.9 per cent from a year ago. The average sales price was US$330,800.

Confidence among homebuilders improved in May as prospective buyer traffic picked up along with sales, the National Association of Home Builders/Wells Fargo index showed last week. Builder confidence rose to 44 from a revised 41 in April, the Washington-based group said.

This week also saw quarterly releases for some major US home builders.

Wall Street was abuzz over Home Depot Monday as the company’s stock climbed to a 52-week high on a strong earnings report stemming from a burgeoning housing market. Home Depot reported a better-than-expected 4.3 per cent jump in sales. UBS analyst Michael Lasser estimated 35 per cent of Home Depot’s sales are to commercial customers.

“In the first quarter, we saw less favourable weather compared to last year, but we continue to see benefit from a recovering housing market that drove a stronger-than-expected start to the year for our business,” said Frank Blake, CEO at the home services retail giant.

Home Depot shares are up 30 per cent so far this year.

On Wednesday, Lowe’s reported a disappointing 1Q profit after its comparable sales unexpectedly declined 0.7 per cent.

According to Seeking Alpha Thursday, Lowe’s missed on both revenues and earnings consensus estimates, unlike its competitor Home Depot. Despite weaker revenues, Lowe’s still guides for a 4 per cent increase in full-year sales for 2013, driven by a 3.5 per cent increase in comparable sales. This implies that full-year revenues are expected to come in around US$52.5 billion, says Seeking Alpha.

Lowe’s shares are up 21 per cent so far this year.

Both companies reported improving demand in April and May, and both saw positive sales growth in such key markets as California, where the weather was not a factor. Both also predict a pick-up in sales as the housing market improves. At the same time, they both got a boost in sales from reconstruction as people rebuild after Hurricane Sandy, and both said sales to contractors outpaced their consumer business.

For its part, Toll Brothers reported 2Q revenue gained 38 per cent, to US$516 million, in its earnings report released Wednesday. Home sales increased to 894 units, from 671 a year earlier.

The company signed contracts for 1,753 homes, at a value of US$1.19 billion, up from 1,290 homes at US$754.7 million a year earlier. Both the dollar and unit figures were the highest since 2006. Toll expects 3Q revenue to increase 40 per cent from the previous three months as more homes are completed at higher prices.

The company is raising prices at 60 per cent of its communities, according to CEO Douglas Yearley.

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Labour Negotiations in British Columbia

The United Steelworkers BC Interior Bargaining Committee has completed the exchange of bargaining proposals with the four major forest industry employer groups in the BC Interior and decided to open negotiations with Canadian Forest Products in an effort to develop a forest industry pattern, the USW stated Friday.

After careful consideration of all the employer proposals, the BC Interior Bargaining Committee has decided that Canadian Forest Products is the employer that the union stands the best chance of negotiating a BC Interior pattern deal, the union said.

North American Wildfires

Strathcona County officials said Thursday night that firefighters were making progress in efforts to battle a blaze northeast of Edmonton, AB, although the fire was still considered out of control. Officials said Wednesday night’s cool conditions allowed crews to make progress in fighting the blaze, and the affected area has been completely surrounded with a ploughed fire guard.

As a result, the fire is considered held, but not yet under control.

Canada, US Wildfires

The fire was spotted shortly before 3 pm Wednesay near Lindale, AB, a community about 100 kilometres southwest of Edmonton. It has since jumped Township Road 500 and grown to about 36 hectares, the county said in a news release. Heavy winds have helped propel the blaze, which prompted an evacuation order of about 200 homes.

As of Thursday afternoon, there were 26 wildfires in Alberta, though none were considered out of control, said provincial wildfire information officer Whitney Exton.

A controlled burn in California got out of control and turned into a wildfire covering 1,500 acres (607 hectares) in a remote area of eastern San Diego County, officials said.

The California Department of Forestry and Fire Protection said crews were expecting to burn approximately 114 acres (46 hectares) of brush in a largely unpopulated area east of Julian, CA, Thursday when the wind shifted.

Agency officials said the fire got out of hand but no structures were threatened and no injures were reported.

The fire was about 30 per cent contained, the agency said.

More than 600 firefighters, aided by air tankers, helicopters, dozens of engines and water tenders are battling the blaze, the Los Angeles Times reported Thursday.

No homes are threatened. One firefighter suffered a minor injury.

Sawmill Worker Fatality, Fire

A man was killed Tuesday in an industrial accident in Superior, near Duluth, WI.

David Clink, 30, was killed after his arm or clothing was caught in a conveyor belt system at White Cedar Shingles and Lumber Company, 2700 Winter St. It appeared that Clink was pinned against the machinery and was asphyxiated.

Clink was working at the business alone at the time. He was found by a co-worker, who in turn notified authorities.

Sawmill Fire, Worker Fatality

An early morning fire destroyed a saw mill in northern Ohio’s Trumbull County Thursday.

Calls went out about 1:30 a.m, bringing many fire departments to the scene on state Route 534. Firefighters say early indications are that a block of wood caught fire and flames spread to nearby saw dust, which quickly grew.

The mill was not attached to a home and there are no injuries to report.

Kalesnikoff, Hampton Increase Lumber Supply to Japan

Kalesnikoff Lumber, based in British Columbia, increased its sales ratio into Japan to 60 per cent in 2012, most of it Dugla fir according to the Japan Lumber Reports. The product mix was mostly Douglas fir taruki, baby squares, genban and SPF lamina.

For 2013 the company plans to send 40 million cubic metres of taruki, a 5.3 per cent increase over 2012, 15 million cubic metres of Douglas fir baby squares, a 7.1 per cent increase, and 15 milion cubic metres of lamina, 25 per cent more than last year.

The company invested about $1.8 million in renovations in the past six months, installing a new optimizer and small log line to process smaller lumber sizes. Kalesnikoff expects the upgrades to increase producton by 10 per cent, says the Reports.

Hampton Affiliates, out of Portland, OR, also plans to increase lumber exported to Japan this year, by about 24,000 cubic metres, or 40 shipping containers, a month.

The company’s Willamina, OR, sawmill, which cuts Douglas fir only, is expected to ship 10 per cent of its output to Japan.

Brookfield Sells . . .

Brookfield Asset Management is selling its 51 per cent controlling stake in Twin Rivers Paper Company to Blue Wolf Capital Partners and Atlas Holdings.
Twin Rivers Paper Company operates paper mills in Edmundston, NB, and Madawaska, ME, and a lumber mill in Plaster Rock, NB. The company was formed with the province of New Brunswick as a general partner and creditor after the bankruptcy of Fraser Papers in 2010.

Blue Wolf Capital Partners and Atlas Holdings previous owned the Northern Pulp mill in Nova Scotia.


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