Profit margins for lumber producers generally improved in 1Q 2020

The following report on the global sawlog and lumber market in 1Q 2020 is provided by Wood Resource Quarterly.

Global Sawlog Market

• There were relatively few price changes for sawlogs throughout the world in the 1Q/20 despite interruptions in trade and uncertainty in short-term lumber demand in many of the key markets.

• The Global Sawlog Price Index (GSPI) remained practically unchanged from the 4Q/19 to the 1Q/20. This followed a period of two years when the Index was in constant decline

• Over the past two decades, sawlog prices in Eastern Europe have gone up the most on the continent, albeit from low levels, while prices in Central Europe have declined substantially, particularly in 2019.

Global Lumber Market

• Importation of softwood lumber to the U.S. fell for the third consecutive year in 2019. However, in the 1Q/20, the import volume was up y-o-y, and the month of March was surprisingly strong despite the Coronavirus Epidemic.

• Softwood lumber imports to China plunged in the 1Q/20, 14% lower than the previous quarter and 37% lower than the all-time-high in the 2Q/19.

• Profitability generally improved for lumber producers around the world in the 1Q/20. This followed a year of mostly gloomy financial news with many lumber producers making very low or even no profits at all.

• Declining export prices for sawmills in the Nordic countries coupled with only incremental reductions in log costs gradually reduced profitability during 2019 and early 2020.