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Softwood lumber trade up 20% in Q1

In 2016, first quarter shipments were approximately 20 per cent higher than in the first quarter of 2015.

The following is an excerpt from the Global Lumber Market Update from the most recent issue of the Wood Resource Quarterly (www.woodprices.com):

Global lumber trade
All countries on the “top 10 import list” increased their lumber importation during the first few months of the year, with the biggest changes in import volumes being in the U.S., China and Egypt.

North America
There was mostly upbeat news about the U.S. lumber market in the first few months of 2016. Housing starts in March were the highest for that month since 2007, lumber consumption in early 2016 was 14 per cent higher than the same period in 2015, lumber imports from January to April were up 42 per cent compared to early 2015, and lumber prices in May reached their highest levels in over a year. Despite increased domestic wood demand, lumber production on the U.S. west coast actually fell about four per cent during the first four months of the year.

Canadian production was sharply higher during the first three months of 2016 compared to the same period in 2015, with an increase of 19 per cent in the eastern provinces and eight per cent in British Columbia.

Northern Europe
The Nordic countries increased lumber export volumes in both 2014 and 2015. The trend continued in early 2016 with shipments during the first two months up nine per cent for Sweden and 14 per cent for Finland.

With the continued weak demand for lumber in Europe, Asian and African markets have received larger volumes of Nordic lumber so far this year compared to early 2015. Although the U.S. has increased total importation of lumber by as much as 44 per cent during the first quarter of the year, Sweden has only shipped six per cent more than in the first quarter of 2015. Finnish sawmills have not sent any lumber at all.

China
Importation of lumber to China from the two largest supplying countries – Russia and Canada – were 33 per cent and four per cent higher, respectively, during the first four months of 2016 compared to the same period in 2015. Shipments of predominantly pine from Russia have gone up substantially in the past year, with deliveries in April 2016 totalling 1.1 million m³, compared to 820,000 m³ in April 2015. Despite the significant depreciation of the Rouble during 2015 and 2016, Canadian lumber prices have actually fallen faster than Russian lumber prices in U.S. dollar terms.

Japan
Housing starts of 2×4 houses in Japan were up three per cent in the first quarter of the year compared to the same quarter in 2015. Increased lumber demand has been met both by higher production at the country’s sawmills and by increased importation. In the first quarter of 2016, import volumes increased by 12 per cent year-over-year, with Finland, Sweden and Austria in particular shipping more lumber.

Russia
Lumber exports from Russia have fallen for two consecutive quarters. First quarter shipments for 2016 were almost 10 per cent lower than in the third quarter of 2015, but six per cent higher than in the first quarter of 2015. Most of the recent decline has been in shipments to the CIS countries, including Uzbekistan, Azerbaijan and Tajikistan, but trade with Egypt and some European countries was also down. Export prices have fallen quite substantially in dollar terms over the past two years at the same time as values in Rouble terms were close to record high levels in the first quarter of 2016.

Global lumber, sawlog and pulpwood market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, which was established in 1988 and has subscribers in over 30 countries, tracks sawlog, pulpwood, lumber and pellet prices, trade and market developments in most key regions around the world.