International markets continue calling on western softwoods

tTt "u rNrERNArroNAr- marketplace for U.S.-produced soft- wood lumber continues to be a small but steady destination for western softwood species, especially in the Pacific Rim countries.

The market took a huge jump in 2010 and 2011 with the addition of China as a major buyer of U.S. softwoods. Exports for 2010 finished 5l%o ahead of 2009, at more than $843 million and 1.3 billion bd. fr.

Softwood shipments for 2011 took another huge jump with a $1.32 billion export value wirh more than 1.63 billion bd. ft. shipped overseas. China entered the market in a big way, pushing it to the #l spot with $245 million in value and 414 million bd. ft. Japan continued to improve, with $154 million in value and 173 million bd. ft. received in 2011. Two other $100 million markets were Mexico and Canada, including re-exports overseas.

International markets cooled in fourth quarter 2011 and were slow to start up again in 2012. Exports have picked up during this second half of 2Ol2 and are only down l\Vo from 20 11 and above 2010. Estimated value for 2012 should be just under $ l 0 billion in value and, | .25 billion in board footage. This year, China dropped way back from its import levels of 2011, and may end up back into the #4 position, behind the steadily growing markets of Canada, Mexico and Japan.

Regional markets estimates in 2012 for U.S. softwoods include the Caribbean at $124 million, Southeast Asia at $45 million, and the European Union ar 925 million. South Asia, including India and Pakistan, and the South Pacific, including Australia and the French Pacific Islands, combine for another $36 million in exports. Central and South America combine for over $5 million in shipments.

Western species continue to have the major share of the international markets. Douglas fir has climbed from $58 million in 2005 to $283 million (3OVo of all softwood export) in 201 I and should drop only a little to $265 million in 2012. Hemlock has climbed from $ll mil- lion to $16l million in 2011, but dropped in 2Ot2 to $79 million, mostly from China. Ponderosa pine maintained a steady market at about $32 million in 201 l, but jumped to $40 million in 2012.

Southern pine shipments reached $175 million in 2011, but dropped to $ 144 million in 2O12.

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, size, 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, of 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, North American framing system using 38mm x 89mm (2x4) structural members is limited to the U.S., Canada, and a small segment of Japan. Japan is the second largest wood frame construction market in the world. But of Japan's nearly 450,000 wood frame units in 2012, only 98,000 were 2x4 based. 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 100mm 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 Uses

Most of the U.S. softwood exPorted is for non-structural uses. Interior applications, such a doors, windows, frames, mouldings, flooring, paneling, and other millwork, are a prime destination for pine and fir species. Furniture parts and glued panels are also a destination for 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 because much of the stock is ripped and resawn to provide "finished" metric sizes for local markets.

A large portion of exported lower grades in softwoods are used in concrete forming for forms, wailers and support posts. Much of the worldwide structural construction is based on the use of concrete, so there are a large demand for formwork materials at all levels. Some world markets require structurally graded materials, some cultures use the material repeatedly, but some see wood as a single-use material and aim for a cost-competitive disposable supply, and use the remains for fuel or local d-i-y projects.

Western softwoods have found distinct foreign markets based on species and size. For strength, long lengths, and large sections of solid lumber, or for tight close grain materials, the U.S. West is the place to go. The Pacific Rim is the leading market for westem species. China was the top destination in 201 l, but fell behind Japan in 2012. China has grown by a factor of 10. In 2005, exports to China were $23 million (33 million bd. ft.), rising to $245 million in 201l.In 2012. however, China decreased 5O7o to $ 125 million.

Hemlock was the leading U.S. species imported in 2011, at $105 million, and took the biggest hit in 2012, down to $29 million. Douglas fir was $37 million in 201l. but fell to $24 million in2012.

Japan is the major export market for U.S.-produced Douglas fir, importing $137 million,which represented 5OVo of all Doug fir exported in 2011. The vast majority of the product is in metric sizes and lengths for post and beam construction. Western hemlock and hem-fir were second at $4 million.

Other notable species include redwood, western red and yellow cedars, and ponderosa pine. For 2012, exports were on track to increase by more than 87o over 2Oll.

Mexico was the third largest market for western species in 2012. A market value of $126 million was sent to Mexico in 201l,and2Ol2 should top out at $144 million. Mexico is a low-grade pine market, with ponderosa pine the leading import, behind "other softwoods." Uses include furniture components. concrete forming. pallets, crating and millwork. Doug fir is also used fbr 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 agencies, trade associations. and state agencies provide marketing programs, including trade shows, trade missions, market sourcing, design and usage information 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 trade missions. Whether you're a producer, wholesaler or retailer, you probably have a link to the SEC and its activities through an SEC member.

- Craig Larsen is president oJ the Softwood Export Council, Portland, Or. Reach him ar (503) 620-5946 or c lar s e n@ s oftw ood.o rg.