Lumber Prices in USA & Canada - North American Timber Market

North American Lumber Market

01-15th June 2006

USA increased plywood imports in Q1 2006
According to the USDA, Foreign Agricultural Service (FAS), US imports of softwood and hardwood plywood rose in the first quarter of 2006. US softwood plywood imports increased 21.2% to 488,925 m3 ($137.4 million, up 31%) while hardwood plywood imports rose 15.2% to
927,214 m3 ($368.1 million, up 19%). Most hardwood plywood imports came from China (368,477 m3, up 48.5%), Malaysia (155,467 m3, up 22.5%), Indonesia (106,983 m3, down 11.5%), Russia (103,941 m3, up 9%) and Brazil (50,307 m3, down 33%). Malaysian and
Russian hardwood plywood suppliers have been able to expand their deliveries again, while suppliers from Indonesia and Brazil delivered less hardwood plywood than in the same period last year.

North American red oak faces challenging times
The good fortune of red oak, the most abundant commercial hardwood sawn species in North America, changed dramatically at the beginning of this decade, according to the Hardwood Market Report. Red oak, and to a slightly lesser extent white oak, production started to
shrink and prices started to decline. Three fundamental reasons are:
Hardwood using industries in the USA, in particular furniture, find it increasingly difficult to compete against products from China and other low-cost countries. This has resulted in a much reduced demand for red oak (see table).
Growing consumer preference for maple other whitewood species, nowhere as pronounced as in the cabinet industry. While previously, red oak accounted for over 75% of the mix used by the cabinet industry, now maple is the dominant species.

Increasing competition from European hardwoods are taking market share away from US red oak. Imports of foreign temperate woods (lumber and finished goods) are growing. This applies not only just to furniture but to a wide variety of manufactured wooden products.

Although sawmills curtailed their output for both green and kiln-dried lumber, the diminished supply did not prevent prices from falling quite steeply. Many sawmills are shifting instead to other species, but this is not an easy task to achieve. Due to the sheer magnitude of oak
forests in the Eastern USA and Canada, it is virtually impossible for hardwood sawmills to reduce red oak production to any significant extent. Serious marketing efforts have been initiated recently in order to revitalize the demand for oak.

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

Source: ITTO' Tropical Timber Market Report