{"id":79936,"date":"2020-10-19T09:46:40","date_gmt":"2020-10-19T09:46:40","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/canadian-softwood-lumber-market-outlook-2020-2021\/"},"modified":"2025-09-19T08:54:16","modified_gmt":"2025-09-19T08:54:16","slug":"canadian-softwood-lumber-market-outlook-2020-2021","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/canadian-softwood-lumber-market-outlook-2020-2021\/","title":{"rendered":"Canadian softwood lumber market outlook in 2020\/2021"},"content":{"rendered":"

The main driver for Canadian softwood lumber production is not domestic consumption, but rather exports\u2014 and exports to the US and China in particular. The COVID-19 recession is expected to cause exports to decline 3% in 2020. We do expect a sharp rebound in US demand, but the outlook for China is not as strong.<\/p>\n

Exports to the US should remain strong as the country\u2019s residential-construction markets have not been affected by the COVID-19 recession like other sectors of the economy. Moreover, we expect low interest rates, tremendous pent-up demand from a decade of underbuilding, and strong demographic tailwinds will all bolster US residential-construction markets in 2021.<\/span><\/p>\n

Meanwhile, Canadian softwood lumber shipments to China have fallen dramatically as the weak Russian ruble has shifted China\u2019s main supply of softwood softwood lumber from Canada to Russia, with the increased supply of beetle-killed European sawn timber taking additional market share in 2019\u221220. Based on this profile, we expect Canadian exports will increase 6% in 2021.<\/p>\n

Canadian softwood lumber capacity has contracted in 2019\u221220. Expansions in the eastern provinces were more than offset by closures in British Columbia as long-dead beetle-killed wood became too expensive to process economically or operationally.<\/p>\n

High prices and profitability in 2020 will lead to investment, which should increase capacity in 2021. However, fiber-supply constraints in British Columbia will limit capacity growth for the year.<\/p>\n

We expect softwood lumber production costs will edge lower in 2020 for a number of reasons, including low softwood lumber prices in 2019 and weak consumption in 2019\u221220 driving down timber prices, closure of higher-cost facilities as mills try to bring production in line with weaker demand, and falling manufacturing costs. Most components of manufacturing costs will fall in 2020. Energy prices have fallen sharply. Labor markets have weakened tremendously, putting downward pressure on labor costs. Finally, Canadian mills will cut miscellaneous costs in an effort to stay as lean as possible while there is so much uncertainty surrounding COVID-19. As a result, we expect inflation-adjusted costs will fall an average of 3% in 2020. Softwood lumber production costs will likely see a near-term bottom in 2020. We expect most costs will increase as softwood lumber demand and prices begin to recover in 2021.<\/p>\n

Canadian softwood lumber prices are mainly driven by demand\/supply conditions in the US market. softwood lumber prices have hit record levels in 2020. This is not because demand is exceptionally strong. Rather, it is because demand is much stronger than market participants expected. In March\u2212May, mills slashed production and dealers aggressively drew down inventories in anticipation of sharply weaker demand as fear and uncertainty around COVID-19\u2019s effect on the economy dominated mill planning.<\/p>\n

However, instead of plunging as most people expected, end-use markets for softwood lumber actually strengthened significantly. This drove dealers back to the mills at a time when production was down and mills didn\u2019t have inventory. Consequently, softwood lumber prices have rocketed higher and, for the year as a whole, we predict prices will increase an average of 57% from last year.<\/p>\n

After hitting such extreme highs this summer, we expect prices will fall more than 20% in 2021. The decline is not because of weak demand or falling operating rates. Part of the price spike in 2020 was because mills cut back production in the expectation that demand would plunge. We assume this will not happen in 2021; in fact, we assume mills will increase production to meet stronger expected demand. With production remaining more in line with demand next year, prices will fall back toward more \u201cnormal\u201d profit levels.<\/p>\n

\"\"<\/a><\/p>","protected":false},"excerpt":{"rendered":"

The main driver for Canadian softwood lumber production is not domestic consumption, but rather exports\u2014 and exports to the US and China in particular. The COVID-19 recession is expected to cause exports to decline 3% in 2020. We do expect … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":59390,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[4716,4715],"tags":[3313,3309,3432],"class_list":["post-79936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-trends","category-market-analysis","tag-canada","tag-exports","tag-softwood-lumber","topic-forestry","topic-industry-prices","topic-sawmilling","topic-wood-construction","area-north-america"],"acf":[],"yoast_head":"\nCanadian softwood lumber market outlook in 2020\/2021 - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/canadian-softwood-lumber-market-outlook-2020-2021\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Canadian softwood lumber market outlook in 2020\/2021 - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"The main driver for Canadian softwood lumber production is not domestic consumption, but rather exports\u2014 and exports to the US and China in particular. 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