Softwood Lumber Prices Hit Record High in Q3 '17

VANCOUVER (Scrap Monster): The softwood lumber prices touched record highs in North America during the third quarter of 2017. Other key markets elsewhere in the world too reported significant pickup in lumber demand.

The latest Lumber Track Report published by the Western Wood Products Association (WWPA) indicates that US lumber consumption remained almost unchanged during the initial eight-month period of 2017, in comparison with the previous year. However, demand witnessed considerable increase during Q3 this year. Consequently, domestic production in the South and the West improved significantly.

The US lumber production increased marginally by 3.2% year-on-year during the first nine months from 24.730 billion board feet (bbf) in 2016 to 25.509 bbf in 2017. Out of this Southern sawmills accounted for 13.700 bbf, edging higher by 3.7% from the previous year. The production by Western sawmills rose by 2.4% to total 10.608 bbf. The only North American region to report reduced lumber output was British Colombia. The monthly production by US sawmills dropped significantly by over 10% from the previous month to total 2.737 bbf in September 2017. The US reported 6% decline in demand for imported softwood lumber during the first nine months of the year.

The Chinese import volumes surged higher by 21% during Jan-Sep ’17. The import volumes saw significant jump during the second and third quarters of the year. Russia continued to expand its lumber market share. The Chinese average import prices were 19% higher in September this year when compared with early-2014. The country’s lumber import volumes are likely to hit new record in 2017. Meantime, Japan reported modestly stable market in 2017. Russia continued to add capacity to meet increased demand from China.

The lumber trade in Europe gained further momentum during this period. The lumber exports from the Nordic countries declined in Q3. The export volume by Sweden and Finland dropped by 18% and 13% respectively. China and Japan together accounted for one-fifth of lumber exports from the Nordic countries. The lumber consumption reported huge decline in the Middle East and North African (MENA) region. The lumber consumption by Algeria declined by nearly 39% year-on-year during the first eight-month period.