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Wood market in flux

May 7, 2014, Vancouver – The International Wood Markets Group is gathering today for its 4th annual Softwood Log and Lumber conference in Vancouver with about 300 attendees from the industry to look at how international markets are shaping up in 2014 and beyond.

Russ Taylor, President of Wood Markets welcomed guests this morning with a quick overview of the global supply chain trends. "Whenever you have higher prices, supply catches up really fast but these cycles don't last very long."

Taylor talked about the Chinese demand for stable supply that Russia hasn't been able to supply. B.C. Interior will soon have supply shortages as well. The big question for Taylor is where will the wood come from to supply the global demand?

The US West coast could increase log exports to China if prices create enough incentives, said Taylor, and this would have an impact on Pacific Northwest sawmills.

Eastern Canada will come back but their allowable annual cuts (AAC) are declining. This is a policy issue that could change if there is political will.

The US demand for lumber has been slow as new single-family home sales remain sluggish. There hasn't been much improvement since 2009 and as long as the bulk of employment created continues to be non-permanent part-time work, this won't change. Based on the market's development so far this year, Taylor admits that his 2014 US housing starts forecast may have been a little bit high despite its conservative estimates compared to other forecasts.

When the market does pick up, there will be supply chain issues. Where will all the workers come from to supply the lumber needed? We'll have to wait to find out.

May 7, 2014  By  Amie Silverwood

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