CALGARY, AB, Nov. 28, 2012/ Troy Media/ – The footprint of the forestry industry in Alberta is often understated. Alberta’s lumber industry is the third most important in Canada, after B.C. and Quebec, but it’s often overshadowed by the stupendous amount of economic activity generated by the energy and agriculture industries. The forestry industry was hit hard by the downturn, but lately it’s been showing signs of life.

The Alberta Forest Products Association (AFPA) released third quarter revenue numbers for their members this week, coming in at $614 million. This is the highest quarterly figure since the third quarter of 2008 and is largely attributable to surging lumber shipments. Pulp production remains subdued, however, with output remaining at 18 per cent.

It’s not surprising lumber has been leading the recovery, as it’s riding the housing recovery wave south of the boarder. Housing starts in the United States are now up over 800,000, well above 2011 levels. Because of sawmill closures over the years capacity is tight, meaning the price of lumber has jumped on the higher activity. In Chicago lumber futures have jumped from the $240-245/thousand board feet (tbf) range at the beginning of the year to a $310-315/tbf range currently.

While the U.S. housing market was down, China became a major destination for Canadian lumber shipments. This helped keep a number of sawmills in western Canada operating and will allow them to take advantage of the resurgent price south of the boarder. Once more faith in the recovery takes hold, however, more sawmills will reopen, taking some steam out of the surge in prices.

Source: Troy Media

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com