By: Business Vancouver
Global softwood lumber production is on pace to break the record set in 2015.
That production is being driven in large part because the top 10 importing countries increased lumber imports during 2016’s first quarter.
Global production is up 20% in the year’s first quarter compared with the same period in 2015.
According to Wood Resources International LLC, Canadian lumber production was also “sharply higher” during the same period.
According to the Council of Forest Industries, China is the world’s largest lumber importer. Approximately a third of B.C.’s lumber goes to China, second in terms of the province’s export market behind the United States.
U.S. housing starts in March were the highest since 2007, and U.S. lumber consumption in early 2016 was 14% higher than the same period of 2015. U.S. lumber imports from January to April were up 42% compared with last year, and lumber prices in America reached their highest levels in more than a year.
In October 2015, the Canada-U.S. Softwood Lumber Agreement expired after being enacted in 2006. Because of the agreement’s one-year standstill provision that kicked in upon its expiration, B.C. lumber producers can currently ship softwood lumber products to the U.S. without paying tax or duties. Under that provision, the U.S. has agreed not to launch trade litigation against B.C.
China’s lumber imports from its two main suppliers – Canada and Russia – were up 4% and 33%, respectively, during 2016’s first four months.
The Wood Resources International report noted that despite the significant depreciation of the ruble, Canadian lumber prices have fallen faster than Russian lumber prices in U.S. dollars.
In 2015, global lumber trade totalled 118 million cubic metres, the highest on record.