Softwood lumber demand jumps 18% last year

Global demand for softwood lumber increased by about 18 percent in 2010. This came after a year when wood consumption worldwide was the lowest it had been in almost 50 years. This upward trend in consumption has continued thus far in 2011, with total volume consumed being more than 20 percent higher than the same period in early 2010, according to the market publication Wood Resource Quarterly.

Not surprisingly, it is China that has been the major driver in the higher demand for lumber. The country’s sawmills are far from being able to meet the increased demand, and as a result there has been a substantial increase in import volumes the past five year, from just over two million cubic meters (m3) in 2006 to 9.4 million m3 in 2010. This unprecedented rise in shipments continued the first two months of 2011 when imports were as much as 32 percent higher than in 2010.

Practically all major lumber markets in Asia, Europe and North America experienced stronger demand last year. This resulted in higher production worldwide and also increased global trade. The world’s largest importer, the US, imported seven percent
more lumber in 2010 than the previous year, while imports to the third largest market, Japan, were up almost 15 percent. In Europe, shipments were up between 10 and 35 percent to the largest lumber-consuming countries on the continent.

The improved market conditions have resulted in higher lumber prices worldwide. Lumber prices can be anticipated to go up in many markets during 2011 for a number of reasons, including expected increased demand in China, somewhat higher lumber imports to Japan for the rebuilding after the earthquake, and continued measured improvements in the US housing market (mainly repair & remodelling and multi-family residential housing).