American softwood global exports declined from US$949m in 2018 to US$770m in 2019. By far the largest reduction came in exports to China, where US softwood sales fell from US$150m in 2018 to US$74m in 2019, owing to the imposition of an import tariff on imports from the US.
Other factors affecting US softwood exports included lower priced material being available from Europe, where winter storms brought large volumes of timber onto the global market, a strong US dollar and sustained heavy timber demand in the domestic market.
However, China’s newly introduced Tariff Exclusion Process, which allows Chinese importers to apply for the removal of tariffs on specific products, is already having a positive impact. Some US timber suppliers have reported large orders for logs and timber from China. Meanwhile, US exports to Japan remain steady at US$97m owing to the Japanese preference for building with Douglas fir.
Exports to the EU, including the UK, were US$24m in 2019, with Italy the leading importer with US$5.9m, followed by the UK with US$5.1m and Germany with US$3.9m.
Sales are predominantly higher grades of both rough and planed southern yellow pine (SYP). An interesting trend has been an increase in sales of lodgepole pine from US$0.5m in 2015 to US$5.3m in 2019. In terms of other substantial markets, India has been a considerable success story and its US softwood imports hit a record US$25.3m in 2019.
In common with most countries in the world, the US expects to see a significant decline in GDP in the second quarter of 2020 due to the Covid-19 pandemic.
Unemployment claims in the US are reported to be reaching 22 million. However, it is hoped that the recently announced gradual return to work will mitigate GDP decline and rise in unemployment to some extent.
Housing starts are forecast to decline from 1.3 million in 2019 to 1.21 million in 2020, but rebounding to 1.52 million in 2021. A gradual improvement in the third quarter followed by more rapid growth in the fourth quarter will accelerate into 2021.
Prior to the pandemic, the fundamentals underlying US softwood’s main end use markets remained strong. There is pent-up demand for new housing and US housing stock is relatively old, which should encourage RMI activity. So, demand for softwood timber will fall in April and May 2020, before beginning to recover in June and into the third and fourth quarters.
Consumption is forecast to surge by 8.3% in 2021. Demand for domestically produced timber is predicted to fall 5% in 2020, but grow by 13% in 2021.
Exports are expected to reduce by 30% in 2020, before rebounding sharply in 2021 as global trade gradually returns to normal.
Cross-laminated timber (CLT), or mass timber as it’s called in the US, has enjoyed considerable growth thanks to recent changes in American building codes, especially in medium- to high-rise building.
Between 2016 and 2019, American CLT production quadrupled. Eight companies entered the market, construction started on three new plants and plans for a further three were announced in 2019.
A total of 78 CLT buildings were constructed in the US in 2019, representing 372,000m2 of space.
Promotional activity by the American Softwoods organisation globally in 2019 included seminars on wood use in central and south America and Egypt, a market assessment visit to Morocco, participation at numerous trade shows and inward missions to the US for importers from key international markets. The latter introduce importers and manufacturers to US lumber species, grades, applications, and quality control measures.
While travel is on hold for the time being, American Softwoods is also working to open new markets through our work to provide information to international government and building code officials. Work in Chile is progressing to support use of US Douglas fir in timber bridges. Work in China and Thailand is ongoing to educate architects about correct use of US softwoods in hybrid and wood frame structures. Testing of preservative-treated US softwoods is also under way in Thailand.
So, although the short-term outlook for the American softwood industry is difficult, the fundamentals both of the industry and of the US economy remain robust and positive, pointing to a strong rebound in demand both for domestic consumption and for exports in 2021.
