Select Page

The strong North American lumber demand at the end of 2020 has continued at the beginning of 2021, and is expected to continue into the first half of 2021, mainly due to the increase in housing affordability, the reduction of housing inventory and the aging of housing inventory.

In fact, the continuation of the COVID-19 pandemic will significantly affect and change the consumption habits of consumers, and the favorable demographic structure of millennials entering the golden year of buying houses will also promote strong growth in timber demand.

It is estimated that the U.S. housing starts in the first quarter of 2021 will exceed the established level in 2020. It is expected that North American lumber demand will be further supported by the continued high level of maintenance and renovation activities, and the increase in sales of existing homes is expected to boost expenditures in this sector, especially in the second quarter. It seems that the increase in supply in the North American market and the increase in wood imports from Europe are still not enough to offset the supply and demand gap in 2020.

U.S. softwood lumber consumption demand will remain strong in the next two years, but the capacity growth of North American lumber mills is still limited. This is because of the shortage of raw material supply after the outbreak of mountain beetle in BC, Canada, and the decline in production capacity in 2020 In response to COVID-19, U.S. material mills cut investment expenditures for new capacity expansion;

As the Asian region continues to recover from the impact of the epidemic, demand in the Asian lumber market, especially Japan, is expected to remain stable in the 2021.

China’s two largest supplying countries, Russia and Canada, collectively account for roughly two-thirds of total imported softwood lumber. They both lost market share in 2020. Predominantly European suppliers, including Ukraine, Sweden, Germany, Finland, and Belarus, are expected to increase their presence in China to fill the need for wood.

In Europe, the pricing level in the first quarter of 2021 is expected to exceed the level in the fourth quarter of 2020, reflecting similar trends to the North American market. The increase in lumber usage in the construction industry is expected to further support the demand across Europe in early 2021.

EU’s Covid-19 recovery package aims to make Europe the world’s first climate-neutral continent by 2050. This goal is achieved in part by unleashing a wave of renovations that will make 35 million buildings energy and resource efficient by 2030. Europe’s wood industry could benefit from this recovery package and the first signs could be seen in 2021.

Overall, the outlook for 2021 is quite upbeat with demand set to be strong but threats abound, including high geopolitical tensions, unpredictability connected to Covid-19 and the vaccinations rollout, as well as high freight rates.

The post 2021 trends in global lumber markets appeared first on Timber Industry News.