Lumber Production Up, Especially West Coast Mills

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Lumber production rose in the US and Canada in the past 12 months, especially on the western side, due to better access to overseas markets. Generally, output was up five percent or more, compared to 2011.

US housing starts are up, due to lower turnover due to foreclosures and lower numbers of homes on the market. Some forclosures were probably in poor condition and may have been bulldozed.

Canadian sawmills ramped up production to meet increased Canadian and US demand, especially in the East. Fourth quarter production was up 16 percent over 2011.

The Random Length Lumber Price Index increased by over 60 percent in the past 18 months to March 2013. Rising prices in the US are expected to draw in more imports from other countries this year.

The strong lumber market pushed sawlog prices upward throughout North America. The North American Wood Fiber Review reports that prices for Douglas-fir sawlogs in the Western US reached a five-year high in the fourth quarter and the increase did not slow down in the most recent quarter, partly because of sales to overseas buyers.

As log supplies in British Columbia and Eastern Canada became tighter, as a result of tighter log supply, sawmill prices increased there, too.

Wood Resource Quarterly reports global pulpwood and timber market movements, tracking sawlog, pulpwood, lumber and pellet prices, trade and market developments in most key regions around the world.

Pine sawlog prices in the US South may increase soon, as demand for pine increases. putting pressure on southers budgets. According to www.woodprices.com, prices have been relatively stable in the south, over the past three years.

It was a different story for Pulp Mills in many countries, where wood fiber prices continued to fall. US prices for wood fiber did not fall, due to the weakening dollar.

Wood Resource Quarterly reports “Price declines in the local currencies were mainly the result of an increased supply of softwood fiber in regions with extensive lumber production. In the US Northwest, chip prices fell as much as 27 percent during 2012 and the pulp mills in the region had some of the lowest softwood fiber costs in the world in the 4Q/12.”

Additional volumes of residual chips from increased lumber production, reductions in pulp production and pulpmill outages, and large supplies of pulplogs were all factors that contributed to the dramatic turnaround in fiber costs during 2012.

Western Canada also saw a 22 percent drop in prices, compared with late 2011, the lowest in three years.

Hardwood fiber price movements were mixed, with the biggest declines in hardwood fiber prices in Brazil where Eucalyptus log prices have been falling since their all-time high in early 2011.

Alan Gray is the Publisher and Editor-in-Chief of NewsBlaze Daily News and other online newspapers. He prefers to edit, rather than write, but sometimes an issue rears it’s head and makes him start pounding the keyboard. Alan has a fascination with making video and video editing, so watch out if he points his Canon 7d in your direction.