B.C. defies sawlog price drop
October 2, 2015 – The B.C. Interior was one of only two of 19 regions worldwide that showed an increase in sawlog prices in the second quarter of 2015 according to the Global Sawlog Price Index.
Sawlog prices fell again in Q2 2015 in most of the 19 regions worldwide that are part of the GSPI. The only regions where prices increased were the B.C. Interior and Northwest Russia. The GSPI fell 1.5% to $72.63/m3 in Q2 2015. This Index is currently at its lowest level since 2009, and is down 20% from its all-time high four years ago.
Over the past year, sawlog prices have fallen the most in Central European, Eastern European and the Nordic countries (in ranking order) predominantly as a result of a weakening Euro. Domestic log prices in U.S. dollar terms have also declined in Latin America and Oceania, but to a lesser degree.
While log prices have fallen between 15-20 per cent in most regions of the world the past 12 months, average prices were down only seven percent in North America, where healthy U.S. domestic lumber demand and respectable log export volumes from both the U.S. and Canada kept consumption of logs high in 2014 and 2015, according to Wood Resource Quarterly (www.woodprices.com).
The west coast of the U.S., British Columbia and New Zealand have expanded log and lumber exports to China quite substantially from 2010 to 2014, and these are also the regions that had the highest sawlog prices in early 2015 as compared to their respective ten-year averages. In the northwestern U.S., there has been a steady increase in log costs since 2009, and prices in 2014 were higher than their ten-year averages. However, during the first six months of 2015, log exports to Asia have been substantially lower than during the same period in 2014. Since last summer, shipments to China have plummeted by 45 per cent to their lowest levels since early 2012. Two major factors have been influencing the decline in log imports to China in late 2014 and early 2015: there is decreased demand for wood in China, and high log inventories within China itself.
The reduced demand for U.S. logs in Asia has resulted in declining sawlog prices in the US Northwest. In Q2 2015, average prices for Douglas-fir and hemlock were at their lowest levels since 2012.
Global lumber, sawlog and pulpwood market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report tracks sawlog, pulpwood, lumber and pellet prices, trade and market developments in most key regions around the world. To subscribe to the WRQ, please go to www.woodprices.com.