WRQ forecasts 14% jump in global lumber demand during 2016

VANCOUVER (Scrap Monster): The global demand for lumber is expected to see an increase of 13.6% in 2016, says Wood Resource International (WRI). This is in accordance with the estimates provided in the recently released Wood Resource Quarterly report.

The global lumber trade would report increase in 2016, contrary to slow growth projected by the World Trade Organization (WTO) to overall world trade. The global lumber demand had increased by 10.2% in 2015. It must be noted that WTO in its September report had downgraded the overall world trade growth forecast to 1.7% for the entire year 2016.

Many markets around the world have reported increased demand for softwood lumber in 2016, which in turn has resulted in increased global lumber trade. All key lumber importing countries have reported significant rise in imports during the initial three quarters of the year. For instance, Chinese demand for imported softwood lumber during Q2 and Q3 of 2016 has reportedly touched their highest level.

According to WRI, the gradual recovery witnessed in the US housing market during the current year has led to higher domestic lumber production. The lumber imports by the US too have witnessed considerable improvement during 2016, mainly because of the failure of domestic industry to entirely meet the country’s total lumber demand.

The Russian lumber export prices have remained mostly stable during the year. The prices in US dollar terms continued to remain lower on account of the persisting weakness in the Russian currency. The lumber shipment volumes from Russia have surged higher by 12% during the initial six months of 2016, in comparison with the previous year.

The Global Sawlog Price Index (GSPI) had 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. However, global sawlog prices declined in Q3 ’16. The index has fallen by over 14% in the past two years and is down by nearly 12% when compared with the ten-year average.

Meantime, the European Sawlog Price Index (ESPI-€) touched the lowest level since 2010 during the year. The Index declined marginally by 0.5% over the previous quarter to €83.40 per cubic meter in Q3 this year. The decline was mainly on account of the reduced lumber demand in certain countries, coupled with fall in lumber prices in the domestic and export markets.

The WRQ noted that pellet imports to South Korea have increased rapidly during the third quarter of 2016. Incidentally, the country was the second largest importer of pellets during the quarter. The major suppliers of pellets to South Korea during the quarter were Vietnam and Malaysia. The two countries together accounted for 84% of the total South Korean pellet import volumes during Q3 ’16.

The latest data released by Statistics Canada indicates that Canadian sawmills produced 5,917.6 thousand cubic metres of lumber in September this year, higher by 3% from the previous month. Year-on-year, the lumber production went higher by 6.4%. The lumber shipments during September this year increased 5.4% over the previous month. When matched with September last year, the lumber shipments were up by 7.6%.