North America’s sawmills generated the lowest profits in the world during 2006, with the figures for the second quarter of 2007 even lower according to a report from International WOOD Markets Group.

The Global Lumber/Sawnwood Cost Benchmarking report found that profits were “barely positive” during 2006, with rising log prices and falling lumber prices seeing figures for the second quarter of 2007 move “into negative territory”.

In contrast, sawmills in South Africa, Chile and north-west Russia proved to be the most profitable in the world, recording earnings before interest, taxes, depreciation and amortization up to five times higher than the global average of US$13 per thousand board feet.

“[In the US] Lumber prices slumped while log costs in most regions increased, hitting the bottom line hard,” said Bill Mitchell, vice-president at the Beck Group which also worked on the report.

“The weakening US dollar was also responsible for higher costs in Canada and most other forest products regions in the world.”

As reported in this week’s TTJ, supplies of lumber in the US fell to a six-year low, with supplies of 17.65 billion board feet the lowest since the first six months of 2001.