US Softwood Lumber Demand to Expand At 2.3% Per Annum Until 2030

SEATTLE (Scrap Monster):  The recent study conducted by Wood Resources International (WRI) in partnership with ForestEdge forecasts 2.3% CAGR growth to US softwood lumber demand through 2030. The study provides a detailed analysis of the projected demand growth in each of the five end-use categories viz. residential housing, repair & remodeling, non-residential construction, material handling and other.

The study reveals tremendous demand growth in the non-residential construction category. The demand is set to see its fastest growth in this segment. The category is poised to increase its share of total softwood lumber usage from nearly 11% in 2016 to almost 14% by 2030. Meantime, the residential housing, repair and modeling sector is projected to account for almost 70% of the total market demand.

The study identifies the US South region as one of the lowest cost suppliers of softwood lumber in the US. Going forward, the report forecasts major expansion to sawmill capacities in the region.

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The market share of Canadian lumber in the U.S. is expected to decline during the period of study from 2016 to 2030. The biggest decline is likely to occur between 2017 and 2025, consequent to imposition of softwood lumber tariff on imported goods from Canada. Moreover, the harvest level in the B.C. province is likely to record significant decline over the next ten years.

The US softwood lumber imports from other producing countries are likely to increase by 2025. The overseas supply is likely to surge higher to over 10% by 2030. The major suppliers of softwood lumber into the US markets would be Brazil, Chile, Germany and the Nordic countries. The WRI-ForestEdge study predicts higher prices for conifer logs in many timberland investment regions by 2030.