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Softwood lumber prices continued to fall in many markets in 2Q/2015

September 15, 2015 - Softwood lumber prices (in US$) were down in several key markets during the second quarter of 2015 because of weaker demand, ample supply throughout the distribution chain and a strengthening U.S. dollar. The biggest declines have occurred in the U.S., Canada and the Nordic countries, while the drop in import prices to China and Japan has been more modest.

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

North America
Lumber production in the U.S. was slightly higher in the 2Q/15 than in the previous quarter. There is much uncertainty going into the fall with both the U.S. housing construction and lumber demand in China losing some steam. The weaker lumber demand pushed prices in both the U.S. and Canada lower during the summer months.

Northern Europe
Finland and Sweden increased export volumes during the first five months of 2015 by 1.5 per cent and 4.6 per cent, respectively, as compared to the same period in 2014. Although the good news for lumber producers has been higher export volumes so far in 2015, the bad news has been that the average export price for softwood lumber has declined.

Russia
Russian lumber export prices have fallen substantially since last summer. The price decline has been less in wood shipped to China than that exported to Japan, Egypt and countries in the CIS countries, including Azerbaijan, Uzbekistan and Tajikistan. Despite substantially lower export prices, shipments have not seen a substantial increase. Export volumes in the 2Q/15 were less than three percent higher than in the 2Q/14.

Japan
Housing starts in Japan have slowed in 2015 and demand for lumber has declined. As a consequence, domestic sawmills have reduced production by about eight percent so far this year, and import volumes are down 11 per cent. Both domestic and import prices for softwood lumber moved slightly lower during the summer months and were close to their lowest levels in over seven years.

China
Importation volumes of lumber to China have gone through some dramatic ups-and downs this spring with February volumes falling to a two-year low, followed by an all-time high in April. Since the peak, foreign-sourced lumber has declined and was 14 per cent lower in July 2015 than during the same month in 2014. Average import prices have been in steady decline since late 2014 and are currently at their lowest levels in three years.

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. To subscribe to the WRQ, please go to www.woodprices.com.


September 15, 2015
By Hakan Ekstrom/Wood Resources Int'l