The long awaited Global Wood Summit kicked-off in Vancouver yesterday with a detailed overview of global log and lumber trends by forest market analyst and conference co-host Russ Taylor of Russ Taylor Global. With due notice that “forecasters are almost always wrong”, Taylor described the long list of current and expected “fibre supply disruptors”, (including the war in Ukraine and in the Middle East), and the many negative policy initiatives, (such as the EU Deforestation Regulation and new logging restrictions in BC and Oregon), that are exacerbating the availability and supply of low-cost softwood logs world wide. Within North America, potential growth in log and lumber supply is limited to the US South, and other than beetle and wildfire killed logs in select regions, there are few other new sources of wood, said Taylor. “As such, you can expect log and lumber prices to be very volatile until about 2030”.

Taylor was then joined by Western Forest Product’s VP Don McGregor, who spoke to the evolving lumber market in Japan. McGregor emphasized Japan’s ageing population and thus fewer housing starts, the government’s support for the domestic timber and lumber sectors, and Japan’s rising timber harvest levels (of Sugi) and expected lumber exports.

The summit’s second market panel focused on the decline in log and lumber imports into China, reflecting the country’s economic decline over the last four years. The value of lumber exports from BC to China dropped from $1.8 billion in 2013 to $268 million in 2023, and softwood lumber imports in China from all countries are down 35% since 2019. The value of exports to Japan have also declined, though less drastically, from $825 million in 2013 to $382 million in 2023. The one silver lining on the horizon is China’s eventual economic recovery, given that it will require significantly higher volumes of softwood lumber, although it isn’t expect for several years at best.

Taylor then joined panelists Peter Buchleitner (Claus Rodenberg Waldkontor, Germany), Gerry Mi (Western Coast Enterprise, Canada), Mike Chien (Lignum Forest Products, Canada) and Steve Downie (Interfor, Canada) for a lively Q&A on the above topics. Most confirmed their confidence that China would recover (“it’s too big to fail”) and polled on their expected timing the range of two years to five years-plus was mentioned.

The third and fourth panels focused on forestry and wood product production in Chile (Ryan Walters, CMPC, Maderas), New Zealand/Australia (Mary Ellen Aronow, Manulife, USA), Russia (Slava Bychkov), Sweden/Finland (Erik Eliasson, Norra Timber) and Central Europe (Severin Rumplmayr, Donausage Rumplmayr). Moderated by Kevin Mason of ERA Forest Products Research (and Global Wood Summit co-host), select country highlights include: 

• Chile – export markets are showing signs of renewed activity with shipments abroad steadily increasing.
• New Zealand – plantations are fast growing, products are versatile, markets are close and its a low cost producer.
• Australia – plantations are fast growing, operable terrain, domestic-led demand and a supportive government.
• Russia – reduced exports due to government policy and war sanctions, China market is down too but will recover.
• Sweden/Finland – a battery of EU and local restrictions have raised log costs and reduced harvest levels significantly.
• Central Europe – log supply and demand balance is ok but some consolidation and adjustments will be required.

The final panel, moderated by ERA’s John Cooney, focused on the US and Canadian timberlands and fibre supply situation. Amanda Lang (Forisk) highlighted the US South’s positive growth-versus-harvest rate and the Pacific Northwest’s expected contraction (~3.5% over the next decade). Rob Schuetz (Industrial Forestry Service), spoke to the impact of Canada’s Boreal Caribou strategy and Indigenous reconciliation requirements on sawlog availability across Canada. Combined with other policy shifts, Schuetz noted BC’s low harvest-to-ACC rate (~47%) and high number of manufacturing closures since 2020. John Brink (Brink Forest Products) capped the day with an emotive and inspiring commentary on his life-journey from Holland to Prince George—post World War II, where he become one of BC’s most successful value-added wood manufacturers. Among other factors, Brink emphasized the importance a strong primary sector is to a successful value-added sector.

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