Summary
• US softwood exports to Europe have been rising since 2003.
• American Softwoods faced a crisis in 1992 when the EU introduced requirements for heat-treated or kiln-dried timber.
• Housing starts in the US have fallen to 1995 levels.
• The reduction in housebuilding has resulted in an oversupply of timber in the US.
During 2007 I felt a sense of déja vu because when I joined American Softwoods in 1992, the US dollar was at $2 to £1.
The crisis at the time was the impending EU?requirement for all coniferous timber, other than cedar from North America, to be heat treated and/or kiln dried. This resulted in no more green timber coming into Europe, causing severe problems for companies such as Crosby Doors and John Carr Joinery which were concerned as to how they could deal with a severe reduction in supplies of western hemlock and Douglas fir, the major material for their products.
As a result, over the next few years, exports of US softwoods to Europe fell dramatically and the progressive downturn in export levels continued until 1993.
This did not concern the US timber industry too much because at that time domestic housebuilding started to rise – from about 1.2 million homes in 1995 to 2.2 million in 2006. The domestic demand for timber during this period was huge. Therefore, the downturn in exports to Europe did not present a real worry.
However, today is a different story. As a result of the financial crisis that started during the latter end of 2007, housebuilding has virtually stopped. The number of houses being built is at around the same level as that of 1995. This has resulted in an oversupply of timber in the US market, causing severe problems in both the US timber industry and in Canada, which is a major supplier of structural timber to the US.
Opportunities
On the positive side, it has made the US timber industry sit up and look at what opportunities exist outside of the US.
With the US dollar up again at around £2, together with prices for timber in the US at their lowest for many years, you would think here was a great opportunity for timber buyers around the world to take advantage and buy more timber from the US.
To a certain extent this has happened and since 2003 exports to the EU have risen again.
The US financial and housing crisis has had a significant effect on the European timber industry. Before 2006 a number of timber producing countries such as Germany, Austria and Sweden were enjoying significant export levels to the US market. But the downturn in the demand for timber in the US has resulted in an oversupply in Europe and that in itself is putting pressure on timber prices.
The US timber industry has recognised the significance and importance of certification, particularly when selling outside of the US. This has resulted in the establishment of the Sustainable Forestry Initiative (SFI), an independent certification scheme recognised by the UK’s Central Point of Expertise on Timber.
With all that is going on in the timber industry in the US, the softwood timber products produced by American mills are a match for any product available from any timber producer in the world. In fact, at the moment, US softwoods represent not only value for money but also high quality. The diversity of species, together with range, quality and grades, mean they can be used for an infinite number of applications, ranging from general construction, highly engineered projects to high quality furniture.