Global Lumber Markets

September 28, 2021

By: The Working Forest Staff

WRI Market Insights 2021Wood Resources International — 
Record-high lumber prices in the US shifted global lumber trade flows in the first
half of 2021

• US lumber prices reached unprecedented highs in the 2Q/21. For example, the costs
for 2×4 framing pine lumber in the US South averaged almost $800/m3 in May, up from
$210/m3 as recent as February 2020 and nearly four times as much as the 20-year
average price for southern yellow pine. The costs for sawlogs, typically accounting for
60-70% of the production costs when manufacturing lumber, have seen only relatively
small adjustments throughout the first half of 2021 in the key lumber-producing regions
of North America, according to the Wood Resource Quarterly. The favorable lumber
price/sawlog cost ratio has resulted in record-high profits for lumber companies across
the continent.
• Canadian lumber prices have spiked similarly to US prices, with record highs in May
followed by sharp declines during June through August. Canada and the US reduced
lumber exports overseas in the first half of 2021 due to the strong US lumber market.
The most significant decline came in North American shipments headed to China,
which fell from over 1.9 million m3 in the 1H/20 to only 820,000 m3 in the 1H/21.
• Two of the four largest lumber exporters in Europe, Sweden, and Germany increased
their shipments substantially during the first six months of 2021 compared to the same
period in 2020. The significant rise in exports from Sweden and Germany was in sales
to the US. Both countries have benefited from not only larger export volumes but also
substantially higher lumber prices. In May 2021, average export prices for Sweden and
Germany were up 83% and 93% from May 2020, respectively. The most significant
changes in trade by the major European lumber exporters in 2021 have been increases
in intra-continental sales and a decline in shipments to China, the US, and the MENA
region.
• Softwood lumber imports to China fell by 24% y-o-y in the first half of 2021. Although
importation rose in the 2Q, the 1H/21 import volume has been the lowest first half in six
years. It is interesting to note that China’s consumption of foreign softwood lumber as
a percentage of the total usage of both lumber and logs was at its lowest level in over
ten years, reports the WRQ. China’s supply from all countries except Ukraine has
declined from 2020, with the most significant reductions having been in imports from
the US and Sweden. In contrast, importation to China from Chile and Russia has been
relatively less impacted.
• The costs for lumber in China have sky-rocketed this year, reaching their highest levels
on record. Canadian lumber prices have gone up the most as they have been heavily
impacted by the alternative market in the US. From late 2020 to July 2021, Chinese
import prices for lumber from British Columbia were up about 60% during this period

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