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From The Editor

Wednesday, May 16th

Some good news on Chinese and US lumber demand

According to the latest import lumber statistics from China Customs, Canada (almost all from B.C.) was the largest supplier of softwood lumber to China in the first quarter of 2012, supplying 1.45 million m3 (about 900 million board feet - nominal count) with a 47% market share of total imported softwood lumber. In terms of shipments, this is a slight improvement over 2011/Q1 (+3.7%). Canada's softwood lumber market share averaged 46% in 2011 and has increased every year since 2006 when its market share was only 16%. By comparison, Russian volumes kept pace with Canadian shipments in 2012/Q1 (+4.5%) and maintained a 35% market share.

These details and other analysis on logs, housing and market trends have just been released in the May issue of WOOD MARKETS' monthly China Bulletin. China's softwood market appears to be improving in April as compared with the first three months of 2012 as wholesale prices have increased slightly, but steadily. However, the wholesale market price is still very low and cash flow in the supply chain is still very tight. Considering the uncertain market and current government credit policies, most importers have been slowing their purchasing activities and were trying to get their inventories down.

In oher good news, US housing signs are positive. Builder confidence in the market for newly built, single-family homes gained five points in May from a downwardly revised reading in the previous month to reach a level of 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This is the index's strongest reading since May of 2007.

The NAHB also reported that nationwide housing production gained 2.6 percent from an upwardly revised pace in March to hit a seasonally adjusted annual rate of 717,000 units in April, according to newly released figures from the U.S. Census Bureau and HUD. This modest gain was seen in both the single- and multifamily sectors, which registered growth of 2.3 percent and 3.2 percent, respectively.

"April's increase in housing production comes on top of strong upward revisions to the previous month's data, and is an encouraging sign that we are returning to a gradual, upward trend that should continue in the year ahead as builders respond to improving demand for new homes in certain markets," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.

Scott Jamieson, Editorial Director

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