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Tuesday, February 08, 2011

U.S. Exports of Wood To China Increase

The U.S. timber industry has been hurt by a depressed housing construction market, but increased timber exporting to China is helping.  Companies in the $30 billion U.S. timber industry, such as Weyerhaeuser Company and Plum Creek Timber Company are also benefiting because Russia increased tariffs on its wood exports in 2007, leading Chinese buyers to turn increasingly to the U.S. and Canada for wood. Weyerhaeuser turned a fourth-quarter profit from a loss a year earlier due to tripling its Chinese log exports in 2010.  Wood exports to China helped offset a 10% drop in its total logging volume in the same period.

U.S. lumber production peaked at 40.5 billion board feet in 2005 and plunged to 23.4 billion in 2009, according to Western Wood Products Association and Southern Forest Products Association estimates. According to some estimates, roughly 35% of the U.S. timber industry's lumber mills remain closed and exports to China aren't a long-term solution for the U.S. timber industry. According to Wood Resources, the number of U.S. logs shipped to China increased more than 10 times from 256,000 cubic meters in 2007—or less than 1% of the total logs produced, to an estimated 2.4 million in 2010, or about 7% of the region's total log production.

Prices for wood products are continuing to climb. Prices for hemlock logs destined for sawmills in the U.S. Northwest jumped 43% to $66 a board foot in 2010 from $46 in 2009, according to Wood Resources. The export surge also doesn't include wood from other regions. Prices for southern pine, for example, rose just 4.8% in the period, to $65 from $62. (WSJ, 2/7/2011, photo: WSJ)

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