Demand For Lumber Up In USA
Tuesday, November 27, 2012 @ 11:27 AM
Prince George, B.C.- Wood Resources International says there is an increased demand for lumber and saw logs in the USA.
The report says the improved housing market in the US in the past four months has resulted in higher lumber production with the price of lumber rising by about 30% from last year.
Sawlog prices have however remained unchanged so far this year.
Housing starts in the US jumped to 894,000 units in October. This is 19% higher than August and as much as 42% higher than last year. So far this year housing starts are at their highest levels since 2008. However a bumpy road is expected over the next 12 months.
Lumber production is up in Canada by 6.3% with the entire continent showing an increase of 7.3% in August year over year.
The US northwest and Quebec have been the regions with the biggest increases in production. In Quebec output is up 30% over last year in August.
Lumber imports were up nine percent over the previous quarter according to Wood Resources.
Sawlog prices have not yet gone up however in November there was increased pressure in the Northwest US by Chinese log buyers who are more active in the market than a year earlier.
Comments
Why, oh why, are we sending sawlogs ANYWHERE? It hasn’t made any sense to me for the last thirty years!
We send sawlogs to China, then buy their manufactured crap! Stupid.
Sometimes it’s necessary to make export log sales to get export lumber sales. For instance, a traditionally constructed Japanese post and beam house might have up to 1300 different lumber dimensions in it. They do not use a relatively few standardised dimensions for everything, the way we do here. Logistically, it would be virtually impossible for any lumber mill in BC to produce, sort, and deliver to Japan just-as-needed any more than a few of the most commonly used of those 1300 different sizes. Yet if we want to sell them lumber from the species that grow here, it’s to our great advantage to be able to find a way for them to also access sizes in those same species that we can’t readily supply. In instances like that, a complete ban on all log exports might well work against us in preserving the very jobs we’re hoping to retain here.
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Seems to me that the Yanks have been after our logs ever since the free trade agreement was signed. If they are going to get our raw logs make them pay premium price for them.
It actually works both ways, Old Hippy. The former mill at Sooke, on Vancouver Island, sourced much of its hemlock log supply in Washington State. Similarly, pulp logs from Alaska have often been part of the feedstock for coastal BC pulp mills.
If the economic ‘playing field’ were truly level there shouldn’t be any problem with BC mills being able to compete with most of the existing American Pacific Northwest mills. The productivity per man hour in most export oriented BC mills is almost always higher than in all but the most recently constructed American mills. And they haven’t built very many new mills there in recent years.
Even if wages are higher here, the cost per MBF produced is still generally lower here. And its always cheaper to move lumber long distances than it is to move logs, however transported.
In the past, the difference in the exchange rate between our buck and theirs gave their mills an advantage in log purchases, since American dollars bought more BC logs, (after they had been converted to a larger number of Canadian dollars), than Canadian dollars did.
Conversely, we enjoyed an advantage through currency conversion when we sold them lumber the lower our dollar was to theirs. Long term, we’ll both be much better off with our dollar and theirs close to parity.
If our stupid BC Liberal government doesn’t give away our ‘natural advantages’, like lower cost hydro-electric power for our industries (which they seem to be going out of their way to end), and subject us to ever increasing inane bureaucracy, (much of it downloaded to the Regional or municipal level now), and ridiculous punitive taxes, we shouldn’t have any problem retaining lumber manufacturing here and competing fairly with US mills in the North American market.
If we can’t, it’ll be because those hydro increases, tax increases, and cost of all that bureaucracy forces our mills into becoming too large as individual production units. While this certainly does lower the ‘unit cost’ of each stick of lumber produced, it only does so as long as ALL those sticks can actually be sold. When we try to throttle the capacity of a ‘super mill’ back to match the prospects for sales in a declining cyclical lumber market, the costs go through the roof.
“We send sawlogs to China, then buy their manufactured crap! Stupid.”
We send softwood sawlogs to China and they send back manufactured bamboo flooring and cutting boards.
I love the magic of changing one wood for another.
Time we grew our own bamboo, eh??!! LOL
‘Trade’ with China will never be on a ‘level playing field’ so long as their currency is a tightly controlled one and atificially pegged in its exchange rate with other currencies. This allows China to do what the Japanese used to be particularly adept at doing, only on a much larger scale, (because of the difference in size between China and Japan considered as productive entities).
Namely, mobilise national credit internally to build up “the State” (regardless of its eventual effects on “the individuals” that make up that State).
That eventual outcome, when Japan did this prior to World War Two, WAS World War Two.
In the interim between now and World War Three, a virtual certainty unless necessary financial corrections are initiated soon, China will always be able to elbow its way into any export market to secure resources to do more of the same.
The notion that we are somehow going to ‘compete’ with them in the provision of manufactured products for sale here, there, and elsewhere is the ultimate in financial delusion. Failing needed financial corrections here, where there still is a modicum of freedom, we’d best not criticise the rise in military spending we’ve recently undertaken, nor our continued participation in “live fire” combat training exercises like Afghanistan and Libya, and others that will yet be in store. We’re going to need all we can get of that if we ever hope to survive and preserve our culture.
Hooboy. We need live fire traing to survive !! Get out you tin foil hat for that one. Hooboy
I worked at PG Sawmills back in the early 70’s and we would produce lots of custom cut wood, all for export. Japan in particular. Why do we have to send the logs now?
What would you rather have defending you, Jim13135, a military whose members have never seen combat, or one in which at least a basic core number of its members have? Or do you naively think that there will never be another world war, when all the economic conditions that drew the world into the last two are repeating themselves at an accelerating pace?
We don’t ‘have’ to send them logs at all, servant. But it may improve our lumber sales if we do. Our mills can certainly supply the most common sizes used in Japanese construction without any difficulty whatsoever. And do. We’ve done that for years.
But logistically it is going to be virtually impossible for any BC mill to provide the less common dimensions in the quantities needed, which are minor in comparison to the products we do send them, and get them to Japan right when and where they’re needed.
If we want to sell them lumber from our species, much of which is used as high grade exposed wood in their type of construction, then it helps if we can assure them that less common of those 1300 different sizes can be had when needed in those same species.
To do that requires a supply of logs in Japan, from which those sizes can be cut there on demand. It would not pay to try to inventory every possible lumber dimension they use there, and hold it in storage over there until its needed.
As far as the history of log exports in general go, virtually every area of North America that started out exporting logs somewhere else, soon found it led to lumber exports replacing them instead. It is far more cost effective to ship lumber than it ever is to ship logs, just looking at REAL costs.
Our problem today is that we’re not dealing with REAL costs in comparing internationally where it’s cheapest to manufacture a product, but ARTIFICIAL ones derived from currency exchange rates that are purposefully manipulated by countries like China, to give them an unfair advantage over us.
Socredible-I’ll defend myself, we cannot rely on a military to save us if we ever come under attack. You don’t seriously think keeping the residents of PG safe would be high on their list do you?
Lets put it this way. Would bank robberies be more or less common if the vault was made of cardboard?
Classic change of subject….:-) if they dont quit shipping raw logs vaults won’t be needed because all the money will be in foreign countries.
Well, go ahead and ban all raw log exports. And then all the money spent for them will definitely still be in foreign countries. Wouldn’t you say?
Just because we refuse to sell logs is no guarantee some foreign buyer will take our lumber instead. They may, or they may not. Especially if other logs are available from elsewhere, and they are. And that’s what they really want.
And we’ve got a little bigger problem that we won’t move to correct. A financial problem. And we’ve convinced ourselves we need THEIR money to solve it. And so we export logs, and bitumen, and other unprocessed resources.
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