The World Trade Organization (WTO) reported in September that overall world trade will expand by only 1.7% in 2016, a downward revision from earlier this year and the slowest pace since the global financial crisis in 2009. This forecast however, is not true regards the global trade of softwood lumber. In contrast to general world trade, global demand for lumber increased in 2015 (+10.2%) and 2016.
According to WRI, the slow and steady improvements in the US housing market in 2016 have resulted in both higher production domestically and an increase in lumber imports. During the summer and fall, China has seen strong demand for imported softwood lumber with the import volumes for the 2Q/16 and the 3Q/16 reaching their highest level on record.
Russian export prices have been fairly stable so far this year with only slight increases during the fall. In US dollar terms, prices continue to be at their lowest levels in over ten years, thanks to the weak Russian Rouble.
Global sawlogs prices fell again in the 3Q/16 after a temporary increase in the 2Q/16, following an almost two year-long downward trend. The Global Sawlog Price Index (GSPI) has fallen by 14.3% in two years and currently is almost 12% below the ten-year average.
In the 3Q/16, the European Sawlog Price Index (ESPI-€) fell by 0.5% from the previous quarter to €83.40/m3. The Index has trended downward for the past few years, and in 2016, was at its lowest level since 2010. Much of the recent decline has been the result of reduced demand for lumber in some markets and generally lower lumber prices in both domestic and export markets.
Residential pellet prices in Europe have moved slightly upward this fall but still have a way to go before reaching the same levels as last fall. Import volumes of pellets to South Korea have increased rapidly and the country was the second largest importer of pellets in the 3Q/16.
Import volumes of pellets to South Korea have increased rapidly and the country was the second largest importer of pellets in the 3Q/16.
The major suppliers in 2016 have been Vietnam and Malaysia, together supplying 84% of the total import volumes.