Global Timber and wood products market see growth

Softwood lumber exports from Russia, Germany and the Nordic countries have climbed after seeing high demand for wood in Asia and Europe in early 2018. Canadian exports plummeted to the lowest level in five years, according to the Wood Resource Quarterly.

Global Softwood Lumber market

Worldwide trade of lumber saw an increase again in early 2018, hinting that this may be another record year. Six of the ten largest lumber-exporting countries in the world have expanded their shipments in 2018. Russia, Germany, Ukraine and Austria have increased their exports the most year-over-year.

The biggest fall in exports y-o-y comes from Canada, with shipments in 2018 set to be the lowest in five years. Canadian shipments to China and the U.S. during the 1H/18 fell 19 per cent and 6 per cent respectively, as compared to the same period in 2017.

Lumber markets – North America

Lumber prices in the U.S. saw several ups and downs in the past year, with sharp surges during the 2H/17 and early 2018 followed by plunging prices in the middle of 2018. The drastic price fluctuations mostly signal of the changes in the strength of the U.S. housing market.

U.S. lumber production grew 5.5 per cent in the first four months of 2018, compared to the same period in 2017. The biggest increase came in the U.S. West (+10 per cent), while the rise in the U.S. South was more conservation (+2.1 per cent). Canadian lumber production declined 1.2 per cent for the first four months, with British Columbia’s sawmills running 4.3 per cent below last year’s production levels.

Lumber markets – Northern Europe

From 2016 to 2017, lumber exports from Finland rose 8.7 per cent. However, export volumes were 3.5 per cent lower in the first four months of 2018 than in the same period in 2017.

Saudi Arabia (-49 per cent), China (-25 per cent) and the United Kingdom (-6.7 per cent) have seen the biggest drop in volumes shipped.

Sweden’s annual export volume of softwood lumber in 2017 was 13 million m3, remaining mostly unchanged from 2016, and the pattern continued in early 2018 (year-over-year).

The biggest changes in exports from 2017 and 2018 have been declines in shipments to Egypt and Japan and increased exports to European customers.

Lumber markets – China

Russia supplied China with record volumes of softwood lumber in the 2Q/18, while imports from the US and Europe fell from the 1Q/18. Lumber producers in Siberia and Russia Far East have continuously increased their market share of total lumber imports to China over the past few years, increasing from about 36 per cent in 2011 to 56 per cent in 2018. The increase in shipments of softwood lumber from Russia to China in the past seven years has come at the expense of log exports. Import prices for lumber plateaued in the 2Q/18 after rising steadily since early 2016.

Lumber market – Japan

Softwood lumber import volumes to Japan climbed 6.7 per cent q-o-q, reaching almost 1.6 million m3 in the 2Q/18. This was the second highest quarterly import volume in four years. During the 1H/18 there have been only minor changes in the sourcing of lumber.

Prices (in Yen terms) for both domestic and imported softwood lumber have remained stable in Japan in 2018, but the weakening domestic currency may push down costs for lumber in US dollar terms.

Global lumber, sawlog and pulpwood market reporting is included in the 56-page quarterly publication Wood Resource Quarterly (WRQ).