A massive increase in demand could make lumber the “new oil”, pushing up prices 300% over the next decade, according to an article in The Times newspaper.
The major market driver, said the report by the paper’s Asia business correspondent Leo Lewis, will be mass urbanisation in China, which will fire a construction boom and lead to huge demand for wood for building and furniture.
Over the next two years alone, stated the article, building activity will reach unprecented levels.
“The Chinese national budet has set aside US$141bn for the production of 20 million m² of affordable housing by 2012,” wrote Lewis.
Giving wood demand an extra boost, the Chinese have issued new building codes which, it is anticipated, will increase the use of timber frame.
“It’s the most comprehensive and detailed code for wood-frame structures,” David Watt of Royal Bank of Canada was quoted as saying.
He added that Chinese demand for Canadian lumber is set to soar.
“We’d said that Canada was moving from a nation of hewers of wood, to a nation of bankers and real estate agents,” he said. “That might have been premature. Lumber might be the next decade’s oil.”
Canadian lumber exports to China had already doubled in the last year, he said, and the shortfall of Chinese consumption over domestic supply is expected to continue to run at 160 million m³ annually.
