Market update for global lumber markets

America and Canada
According to the Western Wood Products Association, lumber consumption in the United States (U.S.) did not change very much over the first eight months of 2017 as compared to the same period in 2016. But there was, however, an increase in demand in the third quarter of this year that was met with higher domestic production in the Southern as well as Western states.

Lumber production in the U.S. has risen by 3.2 per cent year-over-year, with British Columbia (B.C.), Canada, experiencing a reduction in lumber production in 2017. When the forest fires were at its peak in August this year, production was 8.7 per cent lower than in August 2016.

However, rising demand in the Western states in the U.S. as well as Asia drove Douglas-fir lumber prices to record prices in the third quarter of 2017. In the Southern States in the U.S., pine lumber prices remained stable over the summer, but rose in autumn in the wake of the impact the two hurricanes left on both log flow and lumber demand.

 

Northern Europe
Lumber exports from Northern Europe fell in 3Q/2017, with shipping volumes from Sweden and Finland going down 18 per cent and 13 per cent respectively from 2Q/2017.

The biggest change, however, in destinations for lumber exports for both countries over the past two years have been the expansion of sales to Asia. 20 per cent of the export lumber volumes from the Nordic Countries in 2017 was shipped to China and Japan, strengthening lumber prices in Sweden and Finland, and hit their highest levels since early 2015 in August 2017.

 

China
Chinese imports of softwood lumber is likely to hit a new record high in 2017, with imports going 21 per cent higher in the first nine months of this year as compared to the same period in 2016, with import volumes in 2Q/2017 and 3Q/2017 being the highest quarterly imports on record.

Moreover, according to the Wood Resource Quarterly, Russia has been increasing its share in the lumber market in China, making up 57 per cent of total imports in the third quarter, an increase from the 52 per cent seen in 2015.

Average import prices have continued to rise as well, and were 18 per cent higher in September 2017 as compared to early 2016 when they were at an eight-year low.

 

Japan
The lumber market in Japan has remained stable in 2017, with import volumes consistently ranging between 1.5 and 1.6 million m³ over quarter over the last few years. Prices for domestic and imported lumber to Japan have also remained unchanged throughout 2017 in terms of the Japanese Yen, except for the prices of imported Douglas-fir, which rose six per cent between January and November.

There have, however, according to Wood Resource Quarterly, been small shifts in supply sources, with the Canadian lumber supply decreasing slightly, and shipments from Finland increasing in turn.

 

Russia
The sawmilling sector in Russia is continuing to add capacity in the Far East as well as in Siberia, with the aim of targeting the rising demand for lumber in China. Over the first eight months of 2017, Russia increased its lumber exports to China by 23 per cent as compared to the same period in 2016.

Although lumber prices in Russia have not changed much in terms of the Ruble over the past two years, there has been a steady increase in export prices when measured in U.S. dollars.

 

Source: Wood Resource Quarterly, Western Wood Products Association