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Above: Timber lofts, Milwaukee PHOTO: WOOD WORKS, ADX CREATIVE


forecasts show only a small decrease in RMI spend from US$161.8bn in 2021 to US$159.6bn in 2022.


Softwood consumption in the US was flat between 2016 and 2019, but jumped in 2020 and is forecast to increase by 4.5% in 2021 and 4% 2022. The US market is going to need imports from European producers for the foreseeable future as Canadian production declines, especially in British Columbia. Canada still dominates imports to the US, with an 87% share of imports, but that’s down from 97%, with Europe at 8.5% and rising. Of total US consumption of softwood of 81 million m3


in 2021, 25 million m3 will be imported. Eleven million m3 of new


production has also been announced in the US since 2018, which will come on stream between 2021 and 2023.


Lumber exports from Canada and the US to China are declining. From a peak of US$159m in 2018, US exports fell to US$65m in 2020. Much of Canada’s exports are low grade material from mountain pine beetle attack.


Canada is still the top destination for US lumber with sales of US$169m in 2020, followed by Mexico (US$127m) and Japan (US$70m) in 2020. Sales in Europe by contrast were US$4.9m in the UK, followed


by US$4.7m in Italy and US$2.3m in Germany. The main species imported to Europe from the US are southern yellow pine in the UK and Italy, with some lodgepole pine being imported into Italy and Spain. Promotional programmes by American Softwoods have been impacted by pandemic, but plans to ramp up marketing are in place for later in 2021 and into 2022, with a full programme of participation at trade fairs in Europe, South America and in the Far East. There are also hopes negotiations on a US/UK trade agreement will restart. Any agreement would provide a boost to Anglo/ US trade.


With the exception of Canada and the Dominican Republic, US softwood sales to all major markets are down in the first two months of 2021, owing to continued high prices and supply shortages, after falling by 20% in 2020 for the same reasons. Exports are expected to increase by 3% in 2022. Customers are frightened of being left with high-priced stock when the inevitable correction happens, but there’s little sign of this at present. Industry forecasts point to a possible correction towards the end of the third or into the fourth quarter of 2021. In the meantime, supply will remain tight and prices at or near record levels. A


possible indicator of future price direction can perhaps be gauged by using the Chicago Futures Market for western SPF 2x4 lumber futures. May 2021’s price is US$630/m3 falling to US$460/m3


for March 2022.


There are, however, a number of factors that suggest lumber prices might fall earlier, such as an increase in production as Covid- safe working practices in mills reduce; an increase in inflation caused by the US$1.9trn US government stimulus package, a further US$2.5trn infrastructure budget and a summer slowdown in lumber consumption. However, given that global demand for softwood will likely remain strong for most of 2021, any decline in prices will probably be gradual.


Although lagging behind some European countries, the US is now beginning to embrace cross-laminated timber (CLT) and other engineered wood products. There are now 15 CLT plants operating, with four either under construction or planned. An estimated 1,100 mass timber projects have been completed to date. ■


The author would like to acknowledge assistance in preparing this article from Forest Economic Advisers and Russ Taylor Global.


Above left: Housing starts are up in the US PHOTO: NIGEL RIGDEN Above right: Wharf-side deck PHOTO: SOUTHERN FOREST PRODUCTS ASSOCIATION www.ttjonline.com | May/June 2021 | TTJ


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