Softwood Log and Lumber Markets in Asia

Transcription

1 Softwood Log and Lumber Markets in Asia Mapping the Course Vancouver, Washington January 24, 219 Bob Flynn Director, International Timber Fastmarkets/RISI Phone:

2 Agenda Need to look at logs + lumber when discussing markets for softwood lumber in Asia Problems with the trade data Changes in China s softwood log and lumber imports Markets for US and Canadian softwood lumber in Asia and elsewhere 2

3 In December 217, we projected that China s softwood log+lumber imports (RWE) would be stable in 218 Million Cubic Meters Logs Lumber RWE China: Imports of Softwood Logs and Lumber (RWE) 3

4 Problems with the trade data Gap in Chinese reporting of trade data starting in April Shift to weight-only reporting for log and lumber imports Problem with weight to volume conversion factors Issues not only with trade data 4

5 Official statistics on Russia s softwood timber harvest are simply estimated from total harvest levels 81% Share of Softwood in Russian Timber Harvest Statistics 79% 77% 75% 73% 71% 69% 67% 65%

6 Using official Russian data for softwood timber harvests leads to overly optimistic forecasts of future trends 17 Reported Russian Softwood Timber Harvest Million Cubic Meters

7 The good news: our forecast for 218 total softwood imports in China was very close Million Cubic Meters China: Imports of Softwood Logs and Lumber (RWE) Logs Lumber RWE F 218E 7

8 The bad news: we missed the shift back towards more logs, less lumber China: Softwood Log and Lumber Imports, Jan-Nov Logs Lumber 8

9 New Zealand s log market share in China increased to 4% in 218E, and Uruguay also ramped up quickly 16 China Softwood Log Imports Million Cubic Meters E 2 New Zealand Russia USA Australia Canada Japan Uruguay 9

10 Chinese imports of Russian softwood logs and lumber were 1% lumber in 27, but were an estimated 76% in Chinese Imports of Softwood from Russia Million Cubic Meters Logs Lumber (RWE) 1

11 But Russia s total softwood log + lumber (RWE) exports are still below 27 peak Russia's Total Softwood Log and Lumber Exports 7 6 Logs Lumber RWE Million Cubic Meters (RWE) E 11

12 Unprocessed logs were 61% of Russia s wood products export value in 21, but only 16% in 218E Million US Dollars 8, 7, 6, 5, 4, 3, 2, Russian Wood Products Export Value Raw logs Other Wood Products 1, E 12

13 Exports of pine logs from the US South to China have reduced by 6% from their peak earlier in 218 Thousand Cubic Meters US South Log Exports to Asia China India Vietnam Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 13

14 Incredibly, over 4% of US softwood log exports to China in 218 have been from the South, in containers 45% 4% 35% 3% 25% 2% 15% 1% 5% % Share of US Softwood Log Exports to China From US South * * January-October actual. 14

15 Log shipments from the PNW to China have also declined 7 6 USA Softwood Log Exports to China South PNW Alaska Thousand Cubic Meters

16 While the South has gained ground, the PNW is still by far the largest source of log exports Thousand Cubic Meters US Softwood Log Exports to Asia, PNW and South PNW South 16

17 Russia has become the dominant softwood lumber supplier to China; the USA is a minor player China Softwood Lumber Imports, Jan-Nov 218 Chile 3% Sweden 3% Finland 5% USA 2% Other 8% Canada 16% Russia 63% 17

18 In 218, the biggest jump in US softwood lumber exports was to the Caribbean 4,5 4, 3,5 US Softwood Lumber Exports by Destination China Canada Japan Caribbean Mexico Other Asia Other 3, 2,5 2, 1,5 1, E 18

19 US softwood lumber exports to China did include a strong share of treated product, but that market has tanked US Softwood Lumber Exports to China 9 8 Thousand Cubic Meters China (Treated) China (Untreated) 1 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 19

20 64% of lumber exports were to North American and Caribbean countries in 218; only 5% went to Japan, vs. 21% in 2 US Softwood Lumber Exports by Destination, 218 Other Asia 1% Other 4% China 17% Mexico 17% Canada 22% Caribbean 25% Japan 5% 2

21 Japanese softwood lumber imports have been in a long, slowly declining trend for the past 2 years 12 Japan: Softwood Lumber Imports 1 Million Cubic Meters

22 We focus so much energy on China, but Mexico has been a more stable market and is just as large 1,2 US Softwood Lumber Exports to China and Mexico Thousand Cubic Meters 1, China Mexico 22

23 In the near term, US lumber exports will fall due to relatively strong domestic markets US Softwood Lumber, Production and Non-Canadian Exports Million Cubic Meters Production (Left) Exports (Right)

24 The share of Canadian softwood lumber exported to Asia peaked at 34% in 211, now 21% 9 Canada: Softwood Lumber Exports to Asia Million Cubic Meters China Other Asia 24

25 Canadian lumber exports to the USA will remain relatively stable, but exports to Asia will continue to fall Canadian Softwood Lumber Exports Million Cubic Meters Non-USA USA E 219F 22F 221F 222F 223F 25

26 London, May 14-15, 219 Sixth RISI Forest Investment Conference RISI and DANA have combined forces to bring together the most compelling conference for the financial community, those engaged in tracking companies and assets, or those who own and manage timberlands. The two-day conference will take an in-depth look at timberland investments around the globe and how these opportunities will unfold in the near future. 26