Steady increases for western softwood exports

tTt"t INTERNATIoNAL marketplace

I. for U.S.-produced softwood lumber continues to be a small but steady destination for western softwoods, especially in Pacific Rim countries. The market fell back a bit in 2ol2,but recovered with the return of China as a major buyer of U.S. softwoods in 2013. Exports for 2013 should finish 20Vo ahead of 2012 at more than $1.15 billion and 1.4 billion bd. ft.-a possible new near-term record.

China reentered the market in a big way, pushing it to the number one spot with an estimated $223 million in value. Japan continued to improve with an estimated $166 million in value and 173 million bd. ft. received in 201 1. Two other $IO0-million markets were Mexico and Canada, which includes re-exports overseas.

The international markets cooled in 2Ol2 and were slow to start up again in 2013. Exports picked up during the second half of 2013 and are up from 2Ol2 and near the record levels of 201 1. Last vear. China reeained the number one position for softwood exports after dropping back to fourth place in 2012, behind Canada, Mexico and Japan-markets that are steady or slowly growing.

Regional markets estimates in 2013 for U.S. softwoods include the Caribbean at $150 million, Southeast Asia at $50 million, and the European Union falling to $18 million. Upwardmoving markets-such as South Asia, including India and Pakistan, and the South Pacific, including Australia and the French Pacific Islands-combine for another $60 million in exports and Central and South America combine for over $12 million in shipments, up from 9 million in2Ol2.

Western species continue to have the major share of the international markets. Fir has climbed from $58 million in 2005 to $295 million (337o of all softwood export) in 2013. Hemlock has climbed from $11 million in 2005 to $161 million in2oll, but dropped in 2013 to $105 million, mostly from China. Ponderosa pine has maintained a steady market at about $32 million in 2011, but up to $40 million in2013.

Markets

In the worldwide lumber market, U.S. softwood producers are still small suppliers in international softwood markets. Europe, Canada, Chile, New Zealand, and Russia are the major exporting regions or countries for softwood lumber products.

International markets requirements and product uses vary widely by species, sizes, grade requirements, and end use of the materials. Traditional structural species, such as fir and hemlock, are found in many non-structural products. Lower grades of all species, of limited value in structural uses, find a home in crating, pallets and packaging. They are used in many reman and gluing facilities, in parts of the world with much lower labor rates, for furniture and millwork components.

Wood frame residential construction is mostly limited to North America, Japan and Oceana. Even in those markets, the use of North American framing systems that incorporate 38mm x 89mm (2x4) structural members is limited to the U.S., Canada and a small segment in Japan.

Japan is the second largest wood frame building in the world, but of the nearly 540,000 wood frame units in Japan this year, only 108,000 were 2x4based. The vast majority were traditional Japanese metric post and beam timber construction using metric sizes. Structural framing sizes in Australia and New Zealand use 35mm and 45mm by 90mm and l00mm sizes. U.S. softwood producers successful in these markets are providing metric sized lumber to compete with other imported products, mainly from Europe and Canada.

International Wood Uses

Most U.S. softwood exports are for non-structural uses. Interior applications, such as doors, windows, frames, mouldings, flooring and paneling, are a prime destination for both pine and fir species. Furniture parts and glued panels are also major uses of softwood lumber. Western species, such as Douglas fir and hemlock, in clear and other upper grades are prized in Europe for window and door parts and frames. Ponderosa and other western pines are used in rustic furniture, and for upholstery frames in Mexico, China and Vietnam. U.S. producers sell both metric and imperial sizes into these markets, since much of the stock is ripped and resawn to provide "finished" metric sizes for local markets.

A large portion of exported lower grades are used in concrete forming for form walls, wailers and support posts. Much of the worldwide structural construction is based on the use of concrete, creating large demand for formwork materials at all levels. Some markets require structurally graded materials, but otheres see wood as a single-use material and aim for a costcompetitive, disposable supply, such as for fuel or local d-i-y projects.

Western Species Markets

The Pacific Rim is the leading market for western species, with China the top destination in 2013, after dropping back in 2012 behind Japan. China has grown by a factor of 10. In 2005, exports to China were $23 million (33,072,000 bd. ft.), rising to $245 million in 201 I In 2013. however. China jumped 537o, to an estimated $236 million. Hemlock was the top U.S. species imported in 2011 at $105 million; it took the big hit in 2012 and recovered in 20 l3 to $79 million. Douglas fir was $37 million in 2011, and increased to $53 million in 2013.

Japan is the major export market for U.S.-produced Douglas fir, importing $137 million, which was 507o of all Douglas fir exported in 2013, increasing to an estimated $160 milfion this year and up to 53Vo. The vast majority of DF is in metric sizes and lengths for post and beam construction. Hemlock/hem-fir was a distant second at $6 million. Other notable species include redwood, western red cedar, yellow cedar, and ponderosa pine. Overall exports are on track to increase by more than 2l7o over 201 3

Mexico was the fourth largest market for western species in 2013, taking in a market value of $149 million-up from $126 million in 2011. Mexico is a low-grade pine market, with ponderosa pine the top species imported, behind "other softwoods." Uses include furniture components, concrete forming, pallets, crating and millwork. Douglas fir is also imported for some structural applications along the border. The major competition is radiata pine from Chile.

The Softwood Export Council is the U.S. western softwood link to international markets and marketing activities. The SEC and its member organizations, grading and state agencies, and trade associations provide marketing programs, including trade shows, trade missions, market sourcing, design and usage info in native languages. A special SEC program helps put U.S. companies in direct contact with foreign buyers by helping with travel expenses to shows and on missions. Whether you are a producer, wholesaler or retailer, you probably have a link to the SEC and its activities through one of the SEC members. lf you're thinking of expanding or improving your yard, just give us a call to find out how easy we can make it for you.

- Craig lttrsen has served as president of the Softwood Export CounciL since its founding in 1998. Previously, he spent nearly two decades with WWPA. Reach him at c lar sen@ softwood.or g.

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