North America achieved highest global sawmilling earnings in 2012 and Q1/2013
By Wood Markets
Aug. 14, 2013, Vancouver - In 2012 and especially in Q1/2013, U.S.-based sawmills led all 32 global countries and regions surveyed in financial earnings, mainly from improved demand, a run up in lumber prices and from low log costs. This also meant that North American mills (including Canada) achieved the highest global earnings for both 2012 and Q1/2013 as compared to Europe, Russia and the Southern Hemisphere.
Since 2008, sawmills in the U.S, South have attained the highest EBITDA earnings in North America: in 2012 this advantage widened as delivered log costs remained flat since 2010 while other regions had log supply issues and/or rising costs. All three regions surveyed in the U.S. South placed in the top five spots for global earnings in 2012 and were the top three regions in global earnings in Q1/2013. Sawmills in the U.S West performed well but earnings were much lower than the U.S. South; however, they still edged out Western Canada mills.
North American mills rise to the top
The six regions surveyed in Canada had much better results in 2012 as compared to the previous five years where it had consistently achieved the lowest global average EBITDA (earnings before interest, taxes and depreciation allowance) of all global "average" sawmills. Canada's stronger performance was due to a rebounding U.S. market, soaring demand in China, higher U.S. and export lumber prices, and from mill improvement investments made at many sawmills across Canada," explained Russell Taylor, President, WOOD MARKETS and the project leader. "Canada's results at "average" sawmills were dragged down by Eastern Canada but results there are improving and almost into the black." By comparison, the "top-quartile" earnings at sawmills in Eastern Canada crept up very near to the levels of Western Canada mills.
For "top-quartile" mills, Alberta emerged with the highest earnings in Canada, edging out the B.C Interior as well as Ontario. B.C. Interior mills are struggling with log quality issues due to the mountain pine beetle outbreak and log costs are rising. Ontario's few top-quartile mills matched the B.C. Interior for the first time ever, capitalizing on favourable log costs and soaring prices.