North American Lumber Market

16-31th March 2006

US veneer consumers turn to darker species
US timber buyers are increasingly looking to source darker hardwood species, according to TTJ.online and Bacon Veneer, a US veneer company. Species such as African wenge have been gaining popularity with designers. The trend towards darker species follows a 10-15 year period of dominance by lighter coloured woods. Meanwhile, mahogany supplies have declined drastically after the inclusion of big-leaf mahogany on Appendix II of CITES.

New US home sales suffer continuing decline
Sales of new US homes plunged 10.5% to 1.08 million in February, the fourth consecutive decline and the lowest since April 2003. The average price fell by 2.9% from February 2004 while the stock of unsold homes hit 6.3 months of supply, the highest level in 10 years. These seem to confirm that the housing market is cooling.

Canada rejects anti-dumping application
The Canadian trade tribunal (CITT) has dismissed the petition made by the Canadian Council of Furniture Manufacturers (CCFM) on 28 October 2005 to initiate an anti-dumping investigation against Chinese household furniture imports. CITT said the products in question could not be categorized into a single product group but into a number of different ranges of products . CITT added that no information was provided by CCFM on these separate products. Information was also missing about the proportion of local manufacturers affected and the losses per product incurred as a result of the Chinese imports.

Positive outlook for Canadian furniture market
Similarly to the US market (see TTM 11/5), the 2006 outlook of the furniture market in Canada also appears positive. This conclusion is based on the economic fundamentals that affect the consumption of durable goods in the country.

Household furniture consumption to resume growth
The Canadian furniture market (at retail prices) grew continuously between the third quarter of 2002 and the first quarter of 2005 and was stable during the second half of 2005. However, indications are that growth will resume again this year, estimated to average 3%. The size of the Canadian furniture market in 2005 stood at CAN$10.1 billion and is expected to reach at least CAN$10.4 billion this year.

Hefty climb expected in office furniture consumption
Average annual office furniture sales in Canada (at retail prices and including recycled furniture) showed steady growth throughout this decade. Last year’s growth stood at 6.3% lifting the market to CAN$5.46 billion. In spite of sagging corporate profits, growth this year may surpass the 10% mark and raise the value to about CAN$ 5.8 billion. However, shrinking corporate profits usually result in lower capital investments (including furniture) with a considerable time-lag. Therefore, it is likely that demand for office furniture will decline in 2007. 

Abbreviations

LM        Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS         Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR            French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down