Western softwood shipments rise to international markets ONLY THE FTNEST #

7T"t TNTERNATIoNAL MARKETPLACE I for U.S.-produced softwood lumber is one of the few lumber markets that have continued to grow over the past few years.

As recently as 2005, during the height of the U.S. housing market, international markets dropped to $449 million and 76,424,000 bd. ft. By 2008 the market had climbed to $584 million, $372 million from western species and 86,814,000 bd. ft. After a small retreat in 2009, exports for 2010 were 5l%o ahead and expected to top the 2008 figures, climbing to $600 million.

Western species have done well the past few years. Douglas fir has climbed from $58 million in 2005 to $156 million (29Vo of all softwood exports) in 2009, and hemlock has climbed from $l I million to $30 million during the same period. Ponderosa pine has maintained a steady market at about $24 million over the past five years.

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

International markets requirements are widely varied by species, sizes, grade requirements, and end use of the materials. Traditional U.S. structural species, such as Douglas fir and hemlock, are found in many nonstructural products. Lower grades of all species, which have limited value in structural applications, find a home in crating, pallets and packaging. They are used in many remanufacturing 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 parts of Oceana. Even in those markets, the North American framing system using 38mm x 89mm (2x4) structural members is limited to the U.S., Canada and a small segment in Japan.

Japan is the second largest woodframe building country in the world, but of the almost 500,000 wood frame units in Japan last year, only 91,000 were 2x4 based. The vast majority were traditional Japanese metric post and beam timber construction using metric sizes.

Most of the U.S. softwood exported is for non-structural uses. Interior applications, such as doors, windows, frames, moulding, flooring, paneling and other millwork is a prime destination for both pine and fir species. Furniture parts and glued panels are also a destination for softwood lumber.

Douglas fir and hemlock in the clear and other upper grades are prized in Europe for wooden window and door parts and frames. Ponderosa and other western pines are used in rustic pine furniture and for upholstery frames in Mexico, China and Vietnam.

A large portion of exported lower grades in softwoods is used in concrete forming for forming, wailers and support posts. Much of the worldwide structural construction is based on the use of concrete, so there is a large demand for formwork materials at all levels.

Western softwood species have found distinct foreign markets based on species and size. For strength, long lengths, and large selections of solidsawn lumber, the Pacific Northwest is the place to go.

The Pacific Rim is the leading market for western species, and Japan is the leading destination. Japan is the major export market for U.S.-produced Douglas fir importing $77 million (98,435,000 bd. ft.), which was 507o of all Douglas fir exported in 2009. The vast majority of the product is in metric sizes and lengths for post and beam construction. For 2010, exports are on track to increase by more than 60Vo over 2009.

China is another market that has grown over the past five years. In 2005 American lumber exports to China were $23 million (33,072,000 bd. ft.) and rose to $35 million (49,566,000 bd. ft.) in 2009. With the change in the Russian export taxes,

China is looking to the west for increased supply for raw materials (Please turn to next page)

2009 Softwood Lumber Exports

Western Species by Destination Country

Douglas fir

Japan

Canada

Hemlock

Canada

China

Hem-fir Ponderosa Cedars

Canada Mexico Canada

Korea, South Canada Indonesia

China China China

Japan Korea Belgium

Mexico Japan Japan

Netherlands

Philippines

Taiwan Pakistan Caribbean

AII EyeS On China

One of the success stories to emerge from an othenrvise slow third quarter of 2010 is the sharp increase in softwood lumber exports. Offshore business has been good in a number of countries with an over all increase in the third quarter of 52% over the same period a year ago, according to Random Lengths.

0f particular interest is the volume going to China, as exports there more than doubled last yea/s numbers.

Bolstered in large part by our weak dollar, increased taxes on Russian logs coming into the country, the Chinese have been looking more and more to U.S. mills to provide the products they need to satisfy their appetite for wood fiber. And with domestic prices at record lows, many producers see the China market as a better alternative.

One result of this fiurry of business is that new floor levels have been established for domestic prices.

Recently, a number of producers and exporters took part in a trade mission to China that was organized by the Evergreen Building Products Association. EBPA is a non-profit trade group whose members are interested in oromoting western-style conshuction, U.S. building products, and related services in international markets.

EBPA has worked in conjunction

Slow Recovery

(Continued from page 28) to Japan has also expanded, with American mills exporting some 160 million bd. ft. to the island country in 2010,a 507o increase.

Looking to 2011, housing is

byBobMaurer,swansonGroup

with the U.S. Department of Commerce to create the U.S./China Build program, and they have been conducting two "missions" a year to China since 2001. The program consists of seminars presented in different cities to promote, educate and illustrate the value of U.S. building products and building techniques. The program regularly attracts close to 400 designers, architects, builders, distributors, remanufacturers, landscapers and students.

While this program may not be responsible for the recent surge in business in China, it has certainly been busy laying the ground work to familiarize the end users in China with U.S.based products.

Fifteen companies participated in the most recent U.S./China Build program last October (photo above).

Region

North America

East Asia

Caribbean

Southeast Asia

European Union

World