SEATTLE, WA, Dec. 1, 2012/ Troy Media/ – Housing starts in the U.S. jumped to 894,000 units in October. This was 19 per cent higher than in August, and as much as 42 per cent more than in October of last year.

So far this year, housing starts have been at their highest levels since 2008, and market analysts expect the next 12 months to be bumpy but still upward-trending.

The improved housing market has been good news for many sawmills in North America. Lumber production has been higher throughout the continent, with an increase of 7.3 per cent in August year-over-year in the U.S., and of 6.3 per cent in Canada over the same time period.

The U.S. Northwest and the province of Quebec have been the regions with the biggest increases in production the past year. The sawmills in Quebec have really ramped up production, with output in August being 30 per cent higher than in August last year. It is also interesting to note that for the first time in two years, sawmills in the Western U.S. produced as much lumber as the mills in the U.S. South in August. Typically, production levels are higher in the U.S. South than in the West.

The improved U.S. housing market has resulted not only in higher domestic lumber production, but also in an increase in the importation of lumber. Softwood lumber imports in the 3Q/12 were up nine per cent from the previous quarter, which was the highest quarterly import volume since the 2Q/10.

The higher lumber demand has pushed lumber prices substantially upward this fall. In November, Southern pine prices were 48 per cent higher year-over-year, while Western hemlock prices were up 32 per cent over the same period, according to Random Lengths.

Sawlog prices have not yet gone up as a result of the improved lumber market. Pine log prices across the U.S. South have been practically unchanged for almost two years, and sawlog prices in the U.S. Northwest have been surprisingly flat for more than a year. However, in early November, there was increased upward pressure on sawlogs prices in the West from Chinese log buyers that were more active in the market than earlier in the year.

Source: Troy Media

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com