Saturday, November 26, 2011

Timber Producers Buck the Trend for Export Freight

US and Canada Head for More Record Production Levels
Shipping News Feature

US – CANADA - CHINA – Whilst export shipments of waste products, principally metal and paper products, have soared in recent years as China has steadily increased her exports of finished products to the West leaving piles of second hand products and packaging ready for recycling some sectors have made parallel gains in shipping certain types of freight in the opposite direction as manufacturing fodder for the machine which is the Asian supply chain.

Coal and metal ores have of course flowed into China from Australia and other producers but now a report from Wood Resources International LLC shows the astonishing growth achieved by the US and Canadian timber suppliers in moving their product to the Chinese. The Wood Resource Quarterly predicts that exports in 2011 will double those seen in 2010 with softwood shipments predicted to reach an estimated value of US$2.6 billion. Lumber shipments from Canada alone could reach $1.2 billion this year and the North American share of log and lumber import volumes to China has increased from 4% in 2005 to 18%.

Despite the disappointing developments in the US housing sector the past year, lumber production in both the US and Canada has been higher in 2011 than in 2010. Many sawmills in the Western US and Canada have benefitted from the dramatic increase in demand from Chinese lumber consumers and some sawmills are exporting up to 30-40 percent of their production to the fast developing market in Asia.

The biggest increase in shipments the past year has been that of softwood lumber from the province of British Columbia in Canada. Much of this lumber comes from the massive supply of timber that has been killed by the pine beetle over the past 15 years. The value of lumber shipments from Canada has increased from just US$ 55 million in 2005 to the anticipated $1.2 billion this year. While Canada has drastically raised lumber shipments to China in recent years, the US has instead expanded exportation of logs to Chinese lumber manufacturers. This year, US West coast log exporters are projected to ship logs valued at over $900 million, which is up from only $42 million just four years ago.

So whilst the thirst for Asian goods may falter as the fear of recession grips much of the world and industry in the West slows the timber producers of the Northern US hope that the Chinese economy continues to thrive so they may continue to supply a thirsty manufacturing and construction economy with levels of exports which they could only have dreamt of a few years ago.