North America - is there a rally coming?

Friday 25 Oct 2013

Due largely to the strength of new residential housing starts, U.S. consumption rose by 4.4 million m3 (+7.6%) to 62.5 million m3; Canada’s growth was even higher, up by 10.8% to 15.8 million m3. For the first six months of 2013, U.S. consumption was up by some 8% versus the same period in 2012, while Canadian consumption dipped by approximately 5%.

U.S. softwood lumber output in 2012 was 48.8 million m3 (+7.2%), compared with 45.2 million m3 in 2011 (figure 3). Production gains were spread fairly evenly across the U.S., with the West having a slight edge over the South in terms of percentage change from 2011 (6.7% versus 6.0%). Canada’s sawn softwood production rose in 2012 to 39.4 million m3, an increase of 5.4% from 37.4 million m3 in 2011; however, it was still well below the 2004 peak of 62.2 million. In the first six months of 2013, U.S. and Canadian shipments were both higher by about 5%.

At 8.8 million m3, North American producers’ offshore exports in 2012 were similar to those seen in 2011: total exports, including trade between Canada and the U.S., increased by 3.3% to 27.7 million m3 (figure 4). With strong demand and much higher prices in 2012, most of the trade stayed within North America (where the returns were the highest).

However, increasing demand and prices in Japan allowed for higher exports from the U.S. (+15.2%) and Canada (+12.2%). Exports to China were lower from both the U.S. (-37.2%) and Canada (-15.1%) following a mid-year slowdown. However, in the first six months of 2013, U.S. and Canadian exports to China picked up (albeit from relatively low levels) due to steady demand. Closer to home, Canadian shipments to the U.S. grew by 7.7% in 2012 to 13.4 million m3, and then again by 22% in the first six months of 2013.

Source: International Wood Markets Group, www.woodmarkets.com .

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