Thursday, November 15, 2018
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The biggest decline in exports y-o-y has been from Canada, with shipments in 2018 on
pace to be the lowest in five years. Canadian shipments to China and the US during the
1H/18 were down 19% and 6% respectively, as compared to the same period in 2017.
Lumber markets – North America
Lumber prices in the US have been on a roller coaster ride the past year, with sharp
increases during the 2H/17 and early 2018 followed by plunging prices during the summer
months of 2018. The dramatic price fluctuations are mostly a reflection of changes in the
strength of the US housing market.
US lumber production was up 5.5% in the first four months of 2018 as compared to the
same period in 2017. The biggest increase came in the US West (+10%), while the rise in
the US South was more modest (+2.1%). Canadian lumber production was down 1.2% for
the first four months, with British Columbia’s sawmills running 4.3% below last year’s
Lumber markets – Northern Europe
From 2016 to 2017, lumber exports from Finland increased 8.7%. However, export
volumes were 3.5% lower in the first four months of 2018 than in the same period in 2017.
So far this year, Saudi Arabia (-49%), China (-25%) and the United Kingdom (-6.7%) have
seen the biggest declines in volumes shipped.
The annual export volume of softwood lumber from Sweden in 2017 was 13 million m3,
practically unchanged from 2016, and the pattern held true in early 2018 (year-over-year).
The biggest changes in exports from 2017 and 2018 have been declines in shipments to
Egypt and Japan and increased exports to European customers.
Lumber markets – China
Russia supplied China with record volumes of softwood lumber in the 2Q/18, while
imports from the US and Europe were down from the 1Q/18. Lumber producers in Siberia
and Russia Far East have continuously increased their market share of total lumber imports
to China over the past few years, increasing from about 36% in 2011 to 56% in 2018. The
rise in shipments of softwood lumber from Russia to China in the past seven years has
come at the expense of log exports. Import prices for lumber plateaued in the 2Q/18 after
steadily increasing since early 2016.
Lumber market – Japan
Softwood lumber import volumes to Japan were up 6.7% q-o-q, reaching almost 1.6 million
m3 in the 2Q/18. This was the second highest quarterly import volume in four years. During
the 1H/18 there have been only minor changes in the sourcing of lumber.
Prices (in Yen terms) for both domestic and imported softwood lumber have remained
practically unchanged in Japan in 2018, but with the weakening domestic currency, costs
for lumber in US dollar terms have fallen.
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