US log consumption rose 10% during the 5-year period from 2011 to 2015

ALBANY (Scrap Monster): The latest forestry sector analysis report released by Wood Resources International indicates that US timber harvests increased by 10% during the period from 2011 to 2015. The latest issue of Wood Resources Quarterly states that the actual consumption of industrial roundwood by the country totaled 411 million cubic metre in 2015, nearly 10% higher when compared with the consumption during 2011.

According to WRQ, the jump in log consumption over the five-year period is mainly on account of increased lumber and wood pellet production. As per estimates, softwood lumber production jumped higher by 21% from the levels of 2011. At the same time, hardwood lumber production surged higher by 28% over the five-year period. The wood pellet sector in the country has witnessed tremendous growth during 2011-’15. The wood pellet exports to European market have registered strong growth during this five-year period. The volume of timber shipments to sawmills has increased sharply. Meantime, log consumption by pulp mills has declined.

The log exports too have reduced sharply over the past five years. The exports dropped to the lowest level in five years during 2015. The log shipments to Asian destinations declined considerably during the past two years. The log shipments from the US West Coast to Asian countries tumbled by more than one-third to 6 million cubic feet in 2015 from 2013. The demand for US logs has witnessed drastic slowdown in major importing nations including China, Japan and South Korea. The increased shipments from Russia have lowered the demand for US logs. Moreover, the strength in US dollar has led to reduced imports by Asian countries during this period.

Meantime, latest trade statistics indicate that log shipments have rebounded in 2016. The year-to-date volumes during the year are almost 50% higher when compared with the corresponding period in 2015. The global softwood log trade had registered marginal increase of 1% during the initial six-month period of the current year. The log trade has managed to remain buoyant during early 3Q/2016, said WRQ.

Meantime, the failure to reach a fair deal on softwood lumber trade between the two countries are likely to impact the trade between the US and Canada. According to sources, negotiations between the two sides are on even after the expiry of the one-year litigation standstill period midnight October 12, 2016. Although the US companies are presently eligible to file trade petitions against Canadian lumber imports, the Canadian authorities have clarified that any such petition will be challenged before NAFTA panel or WTO, both of which would lead to months and years of legal battle between the two countries.

According to WRQ, the Global Sawlog Price Index (GSPI) surged higher by over 4% in Q2 this year to US$71.18 per cubic metre. The sawlog prices registered biggest increase in Russia, Brazil, Germany and B.C. On the other hand, Chile and the US Northwest recorded lower log prices. Chile experienced considerable weakness in export market. The operating rates at domestic sawmills in the US Northwest declined. Also, log exports to Asia witnessed considerable slowdown during the second quarter of 2016.