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The 2024 UK Forest Market Report, produced by BSW Group’s Tillhill Forestry and Goldcrest Land & Forestry Group, says the UK forestry market remains strong, driven by demand for high-quality assets, stable timber prices, wider natural capital projects and a positive medium-term outlook for wood being used as a substitute for high carbon materials. Source; Timberbiz Nevertheless, the report highlights species diversity as key to its success in the future. The report provides a comprehensive overview of the UK forestry sector, detailing key financial trends, regional insights and emerging investment opportunities. In 2024, £95.4 million of forestry was listed for sale in the UK, with Scotland continuing to dominate with a 79% market share. The volume of land available for sale in Scotland dropped by 40% to 1,600ha, as availability of land suitable for commercial forestry continued to tighten despite sustained demand. Pricing for land has stabilised, however, at around £10,000 per gross hectare. The construction industry is increasingly seeking more sustainable, low-carbon building materials as it moves towards a net-zero environment. With timber’s status as a low-carbon building material already well established, attention is turning to whether sufficient supplies will be available as building starts increase and demand grows, and if homegrown timber can step up to fill any gaps. Nevertheless, the report highlights species diversity as key to its success in the future. The report provides a comprehensive overview of the UK forestry sector, detailing key financial trends, regional insights and emerging investment opportunities. In 2024, £95.4 million of forestry was listed for sale in the UK, with Scotland continuing to dominate with a 79% market share. The volume of land available for sale in Scotland dropped by 40% to 1,600ha, as availability of land suitable for commercial forestry continued to tighten despite sustained demand. Pricing for land has stabilised, however, at around £10,000 per gross hectare. You can download the report here      

The Palisades, Eaton and Hurst wildfires in Southern California have destroyed more than 12,000 structures, raising the likelihood of a spike in demand for lumber in the months and years ahead. Source: Dow Jones The rebuilding process after events such as these “typically drives a significant demand for building materials, particularly lumber, given its foundational role in construction,” said Michael Goodman, director of finance and general counsel at building-materials wholesaler Sherwood Lumber. Demand for construction materials will “undoubtedly rise,” but the pace will depend on the “timeline for insurance assessments, debris removal, permitting and rebuilding efforts,” Goodman said. Historically, it can take several months for the full impact to hit the market, he said. The Southern California wildfires started on 7 January, and as of a week later, more than 12,300 structures had been destroyed, according to the California Department of Forestry and Fire Protection. Replacing 12,000 structures would require an estimated 10,000 to 20,000 truckloads of lumber, Goodman said. A 48-foot flatbed truck can haul 45,500 to 52,000 pounds of lumber, according to Union Pacific. The number of pounds per 1,000 board feet varies by tree species, but the Global Trade Network has figures ranging from 2,250 to 5,350 pounds per 1,000 board feet of freshly cut lumber. On the CME, lumber for March delivery (LBRH25) (LBR00) settled Tuesday at US$585 per 1,000 board feet. “Framing lumber and panels are critical pieces of the rebuilding puzzle,” said Greg Kuta, president and chief executive officer at lumber broker Westline Capital Strategies. “The biggest hurdle will be how quickly insurance and regulation can be cleared to begin the rebuild process, along with a finite labour pool to draw from within the home-building industry.” It may take “many months, if not years, to rebuild in a meaningful way, with critical infrastructure taking precedence over residential structures,” he said, adding that at some point, lumber prices will rally because of that demand to rebuild. Lumber prices based on the most active futures contract have climbed by more than 7% so far in the new year, already outpacing 2024’s modest 1.3% rise, according to Dow Jones Market Data. Prices, however, still trade far below their record intraday high of US$712 in August 2022. That year, the legacy lumber contract was delisted, and the current smaller contract was launched. Kuta said the reason lumber futures have gained 7% so far this year is because of the risk of additional tariffs being levied against Canadian and European lumber by the incoming Trump administration, not because of the Southern California wildfires. Donald Trump was quoted last week as saying that US has “massive fields of lumber” and does not need Canada’s lumber. The bottom line is that we need Canada’s vast and flowing “lumber fields” to supply our domestic housing needs, always have and always will said Greg Kuta, Westline Capital Strategies. Trump has said he would levy tariffs of 25% on imports of all goods from Mexico and Canada. That would be on top of duties already in place on Canadian lumber exports into U.S. markets and would make aggregate framing-lumber costs more expensive for the end consumer in 2025, Kuta said. “The bottom line is that we need Canada’s vast and flowing ‘lumber fields’ to supply our domestic housing needs always have and always will,” said Kuta, who also pointed out that lumber grows in forests, not fields. Any potential fire-related investment opportunities in the lumber market are “more long-term in nature,” Kuta said. “The real, sustainable reason for prices to move higher is demand driven, and that’s highly unlikely in [the first quarter of] 2025.” The 2018 Camp Fire in northern California’s Butte County resulted in a short-term spike in lumber prices, followed by a “stabilization period as rebuilding efforts got under way,” Goodman said. He pointed out that Southern California has unique building codes, including fire-resistance requirements that may influence material choices. That could lead to “diversified demand for engineered-wood products, siding and other specialized materials in addition to standard framing lumber,” he said. It’s still too early to know how much lumber will be needed to rebuild what has been destroyed by the Southern California fires, Kuta said, adding that the North American lumber market is still in an “oversupplied market situation, which has lingered since the end of the bull-market cycle in late 2022.” However, ongoing supply destruction among Canadian lumber producers over the last year, with a number of permanent mill shutdowns in British Columbia, has significantly narrowed the oversupply situation, he said. “We are much closer to supply/demand equilibrium heading into 2025,” said Kuta. Typically, the industry likes to procure lumber in the fourth quarter or the early part of the first quarter in anticipation of the spring building season, he said. Someone who needs lumber and can afford to buy and hold it is probably “incentivized to own the wood in anticipation of higher highs in lumber prices in 2025,” said Kuta. Seasonally and historically, lumber prices peak from mid-February into mid-March and typically bottom out around mid-October into mid-November, he said. The fires may push that seasonal price peak into mid- to late 2025, and the seasonal high could be pushed further out into this year as well, he said. Looking at the bigger picture for the lumber market, Kuta said, “if one believes that interest rates will gradually moderate lower, we as a nation [would still be] woefully underbuilt and in need of new residential housing.” Among the companies to consider are lumber providers Canfor Corp and West Fraser Timber and timberland company Weyerhaeuser, as well as building-material suppliers Builders FirstSource and Boise Cascade, said Kuta, who said he does not own any forestry-related or housing company stocks. Timing will become a bigger issue when organic housing demand does heat up, he said, with the question being whether that happens during the second quarter or third quarter of this year or if the “green shoots of demand wait until 2026 to surface.” There’s likely a “significant […]

JCB has cleared significant hurdles in its development of the world’s first hydrogen combustion engine after securing landmark rulings from licensing authorities allowing it to be used commercially in machines, the company announced. Source: Timberbiz JCB is the first construction equipment company to develop a fully working combustion engine fuelled by hydrogen and a team of 150 engineers has been working on the exciting £100 million development for over three years. The company confirmed that 11 licensing authorities across Europe have now given permission for JCB’s hydrogen engine to be sold across Europe with authorities in other countries set to follow suit with certification in 2025. This is a very significant moment for JCB. To start the New Year with certification in place in so many European countries bodes very well for the future of hydrogen combustion technology. “JCB has proved in recent years that it is a proper zero emissions solution for construction and agricultural equipment. This formal type approval/certification paves the way for the sale and use of hydrogen engines right across the UK and Europe. I couldn’t have hoped for a better start to the year. Most of all, I am delighted for our team of British engineers who have worked tirelessly to reach this stage,” Lord Bamford JCB Chairman said. JCB confirmed that the Netherlands’ Vehicle Authority RDW was the first licensing authority to issue official certification, giving permission for the engine to sold in The Netherlands. Other licensing bodies across Europe have followed RDW’s lead by issuing the necessary certification, including Great Britain, Northern Ireland, Germany, France, Spain, Belgium, Poland, Finland, Switzerland and Lichtenstein. Licensing authorities in other countries are set to follow with certification during 2025. JCB has already produced more than 130 evaluation engines which are powering backhoe loaders, Loadall telescopic handlers and generator sets. Real-world testing of JCB’s hydrogen equipment on customers’ sites is now at an advanced stage and progressing well.