BC softwood lumber exports to China halve, biggest decline in three years

Up until 2010, exports of wood products from the North American west coast to Asia were fairly uneventful. But 2010 saw the shipment, particularly logs, from the U.S. and lumber from British Columbia (BC) rise exponentially to levels not seen for almost two decades. From 2009 to 2013, the value of logs and lumber shipped over the Pacific Ocean surged from US$1.7 billion to US$4.9 billion. Since the record high in 2013, the total export value has fallen quite substantially and was just over US$3.3 billion in 2015.   

Customs data for the first six months of 2016 show a continued decline by 18% in the export value for Canada, while U.S. exports were up 3% year-over-year, as reported in the latest issue of the Wood Resource Quarterly (WRQ). But the biggest shift in the past year was the substantial decline in Canadian shipments of softwood lumber to China as sawmills in BC were directing their sales to the healthy U.S. market. Hence, export value for BC lumber shipped to China this year is on a streak to decline by half as was exported in 2014. 

Between BC and the U.S. Northwest (the states of Washington and Oregon), two different strategies are in placed regarding the logs and lumber exports to Asia. The U.S. has exported mostly softwood logs valued at about 77% of the total value of shipped logs and lumber the past few years, while Canada’s major export product has been softwood lumber, accounting for just over 75% of total exports in 2015 and 2016, reports the WRQ.

Also, a shift in destination for North American logs and lumber has occurred the past five years. For many decades, Japan was the major consumer of forest products from the U.S. and Canada, but in 2011 China surpassed Japan as the major trading partner of wood products. In 2015, North American logs and lumber exported to China and Japan were valued at USD1.9 billion and USD1.2 billion, respectively. But this “gap” between the two countries is likely to shrink in 2016.

Source: Business Wire