After muted gains in the second half in 2012, log prices in the Pacific Northwest are climbing back to pre-recession levels. Forest2Market projects that they will gain additional ground in 1Q2013, the result of the ongoing recovery taking place in both domestic and export markets.
“Asian appetite for Northwest forest products strengthened in the second half of 2012 and looks strong moving into the New Year,” says Gordon Culbertson, Manager of Forest2Market’s Pacific Northwest business. “Inventories of imported logs and lumber products in China have declined by nearly 50% from a year ago, while the Chinese Government has renewed efforts to stimulate affordable housing construction. Russia’s market share, traditionally the largest supplier of Chinese logs and lumber, has continued to erode, leaving Chinese buyers to fill the shortage with deliveries from North America and New Zealand.”
According to Forest2Market’s Delivered Price Database, prices for logs delivered to Northwest seaports for export loading to Asia revived as 2012 progressed, with Douglas fir prices gaining back $72 per MBF of the $78 per MBF they lost in the first half of the year and Hem-fir hitting a 2012 peak in November at $558 per MBF. Strong demand from China, especially for hem-fir logs, and Japan’s renewed interest in higher quality second growth Douglas fir logs will bolster prices going forward.
Source: Forest2Market Jan 2013