Sunday, April 7, 2013

Western Red Cedar price pressure in 2013

North American Lumber Prices Forecast to Soar in 2013 and Reach Record Highs in 2014


By:
International Wood Markets Group
New five-year outlook shows that supply and demand conditions in wood products for the long-awaited ‘super-cycle’ are now taking hold, with the full impact still some 3+ years away
With the return of a demand-driven wood products market in 2012 – due to rapidly increasing housing starts in the U.S. – it is now forecast that lumber and panel prices will move to new highs in 2013 and record highs for lumber in 2014. A North American “super-cycle” has been predicted by Wood Markets since 2008 as a result of emerging supply-side constraints (mainly on forests and logs) as well as changing demand dynamics, but the global financial crisis that started in late 2008 and an unusually slow U.S. housing market recovery have delayed this event until 2012.
With the expectation of strong growth in U.S. housing starts over the next five years, combined with a better balance in the housing inventory and a recovering economy, the U.S. supply chain is expected to become overwhelmed at times during the next five years, allowing wood products prices to soar.
While there are a number of assumptions that are required to maintain steady economic growth, a strong wood products recovery amidst a tightening timber and mill supply base is still expected.
These and other findings on U.S. and Canadian lumber markets as well as forecasts for all engineered panels were released in December by Wood Markets in its eighth edition report, "WOOD Markets 2013 • The Solid Wood Products Outlook • 2013 to 2017."
The report examines an overall tightening of the global timber supply base, but forecasts that it is mainly in North America where scarcities will be felt. With China now importing more and more logs and lumber from North America and with U.S. demand now rebounding, some key structural constraints are expected to keep log and lumber supplies tight relative to demand growth, including a collapse of the Russian logging sector in 2009 from the global financial crisis where log exports are now less than 40% of their 2007 level as they continue to decline in 2012. Changes to the Russian log export tax will continue to leave Russian log exports less available and expensive.

At Sterling Fence Inc, we have purchased supplies this year ahead of any price increases in order to insure stable retail prices in this years building season,

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