China Demand Driving Up Prices for Sawlogs in North America
April 13, 2011 - Softwood sawlog prices have trended upwards in all major regions of
North America over the past two years, reports Wood Resources International (WRI).
According to WRI, the biggest increases have occurred in the U.S. Northwest, where the log export market has had a major impact on the supply-demand
balance. Total log shipments to Asia from the U.S. west coast last year were the highest
they have been in 14 years, and much of this increase was the result of China’s seemingly
never-ending need for wood raw-material.
The U.S. Southeast and U.S. South Central are the sub-regions where log prices have increased the least since 2009 — in fact, prices in
these regions even fell slightly late last year, WRI said.
In the 4th quarter of 2010, Douglas-fir log prices in the Northwest were up 19 percent from the same quarter in 2009. Hemlock sawlog prices, which increasingly have been influenced by log
exports to China and South Korea, have gone up over 25 percent the past 12 months.
With the recent price increases, sawmills in the West now have higher wood raw material
costs than sawmills in the South, which is opposite to the situation in 2009.
Price levels in the Southern states are currently close to their lowest point of 15 years.
Sawlog prices in Canada have followed the same pattern as in the U.S., with prices in the
Western provinces increasing more than in the Eastern provinces. In the 4Q/10, log prices
in British Columbia had moved up to their highest levels in over two years in US dollar
terms. Despite the increase, softwood lumber producers in the Interior of the province
still have some of the lowest wood raw-material costs on the continent, WRI said.
Western Canada currently has the lowest sawlog prices in the world. In Canadian dollar terms, prices have fluctuated less in 2010
than they have over the past few years, and Western and Eastern Canada were actually
two of the few regions in the world that had lower log costs in the 4Q/10 in the local
currency than they did in the 4Q/08, WRI noted.
SOURCE: Wood Resources International LLC