The U.S. lumber market was red hot in the third quarter of 2020, with prices surging to levels never seen before, according to the Wood Resource Quarterly. Southern pine prices increased by 160 percent from the year’s low in April, to September.
In the western United States, Douglas-fir lumber prices almost doubled during the same period. High domestic demand for lumber in the U.S. and a trade dispute with China reduced U.S. softwood exports in 2019 and 2020, with year-over-year reductions of 17 percent recorded in the first nine months of 2020.
Total shipments for 2020 are on track to be their lowest in over ten years. Canadian lumber exports have also declined in 2020. During the first nine months of the year, shipments were 10 percent lower than in the same period in 2019, with most of the decline occurring from January to June. In the third quarter of 2020, total export sales picked up from the previous two quarters, equaling the third quarter of 2019 shipment volume.
The price surge in the U.S. domestic market directly affected Canadian export prices in 2020. Average prices for U.S.-bound lumber in September 2020 were 94 percent higher than in September 2019.
Lumber trade fell slightly in Europe in 2020. During the first eight months, shipments from the major exporting countries were down 1.2 percent, the first year-over-year decline in eight years, reported WRQ. Countries that have reduced exports the most so far this year include Finland, Latvia, and Austria.
Lumber imports to China slowed in the third quarter of 2020, with total volumes falling 2 percent from the previous quarter and 4 percent from the third quarter of 2019. Total imports for the first nine months were 10 percent below the same period in 2019, according to the Wood Resource Quarterly.
China’s two largest supplying countries, Russia and Canada, collectively account for roughly two-thirds of total imported softwood lumber. They both lost market share in 2020.
Predominantly European suppliers, including Ukraine, Sweden, Germany, Finland, and Belarus, have been increasing their presence in China to fill the need for wood in the world’s second-largest market this year.
Despite the reduced demand for lumber, import prices have moved up this year and in the third quarter were the highest they have been in two years. Russian prices were close to a record high. Russian lumber is also the supply source that has increased the most in price the past year.
Lumber imports to Japan fell by almost 10 percent during the first nine months of 2020 compared to the same period in 2019. The year-over-year changes were mixed for the four leading suppliers, with Canada, Finland, and Russia reducing shipments to Japan, while Sweden increased export volumes by 19 percent this year. Importation from smaller suppliers such as Austria, Chile, the United States, the Czech Republic, and Germany have fallen by 10-35 percent in 2020.