Global trade of softwood lumber forecasted to increase by almost 14%
in 2016, driven by higher wood demand in China and the US.
Global Lumber Trade
The World Trade Organization (WTO) reported in September that world trade will
expand by only 1.7% in 2016, a downward revision from earlier this year and the slowest
pace since the global financial crisis in 2009. This gloomy forecast cannot be
extrapolated to the global trade of softwood lumber. Rather, global demand for lumber
has increased in 2015 and 2016, resulting in a rise in trade by 10.2% in 2015, and Wood
Resources International estimates that the increase will be as much as 13.6% in 2016. The
major markets that have been driving this surge in trade are the US and China.
Lumber markets – North America
The slow and steady improvements in the US housing market in 2016 have resulted in
both higher production domestically and an increase in lumber imports. During the first
eight months of 2016, lumber production was up 3.6% as compared to the same period in
2015.
US lumber imports are up 31% so far this year and may reach an eight-year high of
almost 40 million m3 in 2016. Prices for lumber surged in late 2015 and throughout 2016
as exemplified by prices for southern yellow pine, which jumped over 35% in 12 months.
Lumber markets – Northern Europe
Lumber exports from Sweden have remained practically unchanged in 2016 as compared
to 2015 with total shipments likely to reach about 12.5 million m3 this year. Although the
total export volumes have not changed much, the destinations have. Shipments to the key
markets in the MENA region have declined, while more lumber has been shipped to
Asian and European markets so far this year. Lumber export prices in Finland and
Sweden continue to track each other, with average prices for Swedish softwood lumber
being slightly higher than prices for Finnish exports.
Lumber markets – China
During the summer and fall, China has seen strong demand for imported softwood
lumber, with the import volumes for the 2Q/16 and the 3Q/16 reaching their highest level
on record. Although the volumes were down in the 3Q/16 from the previous quarter, they
were still 24% higher than in the 3Q/15. Russia continues to be the major supplier with a
59% market share in the 3Q/16. Import prices have remained at historically low levels in
most of 2016.
Lumber market – Japan
Demand in Japan for overseas lumber has picked up this year with import volumes during
the first nine months being about seven percent higher than during the same period last
year. Importation in the 3Q/16 was 7.5% higher than in the 3Q/15, with Canada being the
largest supplier, followed by Finland, Russia and Sweden. Prices for softwood lumber,
both domestic and imported, have remained practically unchanged in 2016 in Yen terms.
Lumber market – Russia
Russian export prices have been fairly stable so far this year with only slight increases
during the fall. In US dollar terms, prices continue to be at their lowest levels in over ten
years, thanks to the weak Rouble, reports the WRQ. The very competitive prices for
Russian softwood lumber in the export market have mainly resulted in higher production
in the sawmilling sector in Siberia, while exportation of lumber from Northwestern
Russia into the European market has fallen substantially the over the past decade. Copyright 2024 Walden-Mott Corporation All rights Reserved.
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