The latest StatsCan data, out Monday shows an interesting picture for North American forest products…while the lumber business in the US is improving there it is going to be a slow, steady haul for the next approx three years I think :-/
Right now we’re into the usual seasonal ‘boring’ end-of-year slowdown and curtailments. At the very beginning of next year lumber prices will move upward in expectation of increasing US housing starts (again, slowly and steadily).
Some people are talking about a slowdown in China (Canadian exports to there down 10% but at C$985 million) while that to US is up 7.6% to C$4,639 million.
graph:
It’s really important to focus on the data and look at what is actually happening: BC exports to China, by volume, are almost exactly even for almost three years while values are up because lumber prices recovered last year. The same is true in the US. There is no reason to think China will increase buying of wood over the next 3 – 5 years…in fact imports from Canada will remain essentially flat.
US softwood log exports to China are currently running below 2012 data, when full-year exports were US$568 million FAS. I think this is because US domestic producers are consuming their own logs, and because globally log prices are soft.
graph:
Otherwise North American solid wood demand enthusiastic but muted, inventories plush and most sawmills running at reasonably high capacity with several week-long order files.
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