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Will Lumber Usage In China Affect Pricing In US?

Finding Value In The Forest

Posted: May 10, 2011 10:13 AM by Aaron Levitt

Lumbering Along With the American housing market still in the proverbial toilet, lumber seems like an unlikely portfolio candidate. However, growth abroad could help return American lumber exports to prominence. Worldwide demand for softwood lumber rose nearly 18% in 2010. Global consumption of wood and lumber products for the first quarter of 2011 increased 20% versus last year. Both China and Japan have seen voracious demand for timber since early 2009. Already China is short 100 million cubic meters of wood, or roughly double major producer British Columbia’s entire yearly output of timber. Some analysts estimate that China will need to import about 182 million cubic meters of wood by 2015. This is an increase of 70% from its current timber import levels. These continued increases in demand for raw logs have some analysts predicting that lumber prices could rise from today’s $300 per thousand board feet to $500 within the next three to five years.