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44 | Sector Focus: North America


SUMMARY


■ Producers and traders report unprecedented demand


■ Sales of lumber by Home Depot and Lowe’s in the US amounted to US$19.6bn in 2020


■ Housing starts in the US are ahead by 37% this year


■ The US market is going to need imports from European producers for the foreseeable future


DEMAND SENDS US SOFTWOOD PRICE STRATOSPHERIC


Surging US softwoods consumption has seen increased import demand, while high prices have dented exports, but with foreign sales expected to rise in 2022, writes American Softwoods consultant Charles Trevor


Since reviewing the US market for softwood lumber and for engineered wood products in April 2020, the international market for softwood has undergone some of the most seismic changes in living memory, owing mainly to the Covid pandemic. Producers and traders report unprecedented demand, supply shortages for many species and stratospheric prices, with little or no end in sight.


Given these unique circumstances, how to chart a way forward, make sense of what has happened and make some tentative predictions for the remainder of 2021 and 2022?


First, a look at what has brought the softwood world to its present situation, with reference to the US, still the world’s largest softwood market. Much if not all of the current situation has been caused either directly or indirectly by the pandemic. Like the Spanish ’flu epidemic after the


Above: Canal jetty PHOTO: MANCHESTER DECK CO TTJ | May/June 2021 | www.ttjonline.com


First World War, Covid has been a worldwide phenomenon. Few developed countries have escaped the economic consequences. However, it seems that China and most western economies are on course to make a relatively rapid recovery through 2021, provided the vaccine campaign, which has been so successful in the US, the UK and China, can be rolled out as effectively in


Europe, South America, India and other developing countries.


This recovery could in turn cause further raw material shortages (including softwood) as demand ramps up in building and construction sectors. It seems unlikely RMI will continue at quite the same breakneck pace it achieved in Europe and the US during the pandemic, as people gradually return to full time work and furlough schemes are wound up – though it should be remembered that not all RMI is done as DIY by householders and thus consumption of softwood lumber in the RMI sector is likely to continue at a relatively healthy level through 2021 into 2022. Significantly, sales of lumber by Home Depot and Lowe’s in the US amounted to US$19.6bn in 2020 and will continue to be strong in 2021.


Housing starts in the US were up 19% in March over February and are ahead by 37% this year. This trend is set to continue for the remainder of 2021, pointing to increased softwood lumber demand. The consensus is for a 9-12% increase in starts in 2021, but rising mortgage costs in 2022 could put a brake on demand for new houses through 2022 into 2023. RMI could also be affected by homeowners having spent two years improving their homes. However, current


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