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Industrial.

Demand continues to grow for this diverse segment.

Pallet use in the U.S. is forecast to increase 1.9% annually through 2019 to 2.6 billion units, says The Freedonia Group. This will be supported by gains in manufacturing and warehouse activity now that the economy is stabilizing. Wood is by far the most widely used material.

After experiencing a drop in total purchases in 2014, the railway ties market looks to rebound, growing 4.7% (24.3 million purchased) in 2015. The Railway Tie Assn, projects total purchases will hit 24.5 million in 2016.

Like its partner segments, demand for wood pellets should continue to grow, although the top export market--the UK --could plateau in 2017, says the ITA.

Major Players

Stella Jones (Poles, Crossties)

Sonoco (Wood Reels)

Brambles/Chep (Pallets)

AmeriTies (Crossties)

American Wood Fiber (Wood

Flour, Biofuel, Wood Pellets)

Boatright Railroad Products

National Salvage & Service

German Pellets

PECO

PalletOne Inc.

Millwood Inc.

QUICK STATS

The U.S. is the largest exporter of pellets in the world.

Wood continues to dominate the pallet market--95%.

Sources: Crossties/ RTA, ITA, The Freedonia Group, NA Wood Fiber Review, NWPCA, US IPA

Industrial: wood pellets (biofuel), pallets, reels, crates, railway crossties, household utensils, treated wood products

US PALLET DEMAND
(million units)
% Annual Growth

Item                2009     2014     2019   2009-2014   2014-2019

Pallet Demand      842.0   1287.0   1400.0         8.9         1.7
Wood               788.0   1203.0   1301.0         8.8         1.6
Plastic             17.3     34.7     43.4        14.9         4.6
Metal                1.6      8.2      9.6        38.7         3.2
Corrugated Paper    35.1     41.1     46.0         3.2         2.3

Source: The Freedonia Group, Inc.

US PELLET EXPORTS
2015-1G Market Opportunities

Rank                    Country

Strong Prospects

1      United Kingdom--Large market; large share
2          Belgium--Large market; large share
3           Italy--Large market; large share

Less Certain Export Growth

4        Netherlands--Small market; large share
5          Denmark--Large market; large share
6        South Korea--Large market; small share
7          Sweden--Large market; small share
8          Canada--Small market; small share

Significant Obstacles

9          Germany--Large market; small share
10          Japan--Small market; small share
11         France--Small market; small share

Source: ITA Renewable Fuels Top Markets Report

NEW WOOD CROSSTIES (in thousands)

Year     Real GDP    Class 1    Small Market     Total      Pet
Approx              Purchases    Purchases     Purchases

2011       1.8%      16,525        5,363        21,888     11.8%
2012       2.8%      16,968        6,054        23,023      5.2%
2013       1.9%      17,131        7,317        24,448      6.2%
2014       2.4%      17,091        6,171        23,262     -4.8%
2015 *     3.3%      18,132        6,216        24,348      4.7%
2016 *     2.9%      18,306        6,212        24,518      0.7%

* estimates / Source: Railway Tie Association (RTA)
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Publication:Woodworking Network
Date:Dec 1, 2015
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