Lumber Markets See Increasing Demand and Prices in Second Quarter

September 4th, 2012 by DWM Magazine

The North American lumber market is shifting from a buyer’s market to a seller’s market with the increase in demand for lumber by the United States, reported Wood Resource Quarterly. In May, lumber consumption in the U.S. was 13 percent higher than in May of 2011. In fact, according to the report, the May 2012 consumption level was the highest seen for the month of May since 2008.

The report also notes that the U.S. demand for lumber is likely to continue to increase in the second half of this year and into 2013 as the housing and remodeling markets improve. The American and Canadian sawmilling sectors are currently running at about 80 percent of practical capacity according to the announcement, so there is room to add hours and shifts to meet increasing lumber demand.

According to the report, the Canadian sawmilling industry ramped up production the first six months of 2012 as compared to the same period in 2011. All provinces with the exception of Ontario produced more lumber this year than last year; the provinces of Alberta and Quebec saw the biggest increases thanks to higher demand for lumber in the U.S. housing sector. West coast sawmills have also been shipping more lumber to China this year, with exports during the 1H/12 being up three percent as compared to the 1H/11, according to the announcement.

Price trends for sawlogs in North America have been mixed the past 12 months.

According to the North American Wood Fiber Review, the costs for logs, which can account for more than 70 percent of the production costs for a sawmill, were higher in the Interior BC in the 2Q/12 year-over-year, lower in Western U.S. and Coastal B.C., and practically unchanged in Eastern Canada and the U.S. South, according to the report.

 

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