The global markets for round timber and sawn timber are increasingly affected by disruptions in supply chains, changing trade rules and economic slumps – especially in China and Japan. China's demand is falling due to a downturn in the real estate market, while Japan is becoming self-sufficient due to the maturity of forests reforested after World War II.
Over the past two decades, bark beetle calamities have led to cheap wood in British Columbia and Europe. That is now over. In addition, countries such as Finland and Sweden are planning to reduce their timber harvests, while Russia's ban on roundwood exports further exacerbates the shortage.
Russ Taylor, co-organiser of the Global Wood Summit 2024 © treefrogcreative
We’ve got a chance in China, but it’s 2030. It’s not tomorrow.
In addition, conservation efforts are exacerbating the shortage: more protected areas and the preservation of old forests in North America are restricting the availability of wood. New Zealand could increase softwood exports in the coming years, but it is expected to see a decline in supply within a decade.
As supply remains limited, Taylor predicts price fluctuations for logs and sawn timber in China over the next few years. He does not expect stably higher prices until around 2030.
On the second day of the summit, John Cooney of ERA Forest Products explained that sawmill closures with a capacity of over 7 million m3 have been announced in North America in 2024 – in addition to 4.7 million m³ already decommissioned between 2022 and 2023. These closures affect not only British Columbia, but also the U.S. South, where capacity cuts of over 2.8 million m³ were recorded in 2024 alone.
In the future, Cooney expects the timber market to recover due to rising demand and increased tariffs, which, however, will weigh on the financial situation of many companies. Key takeaways from the Vancouver discussion are:
- US timber demand in 2025 depends on interest rate cuts.
- The sawmill closures in North America between 2022 and 2024 will further tighten supply.
- The supply of wood from Canada and the western United States is almost exhausted in the short term.
- The US South remains the only growth region for domestic timber supply.
- European imports could partially offset supply, but rising raw material costs make it more difficult for European producers to export.
Cooney predicts that wood demand in the USA will increase by about 3.5 million m³ in 2025. Due to the supply restrictions, he expects prices to increase by around 20%, which could increase the prices of North American 2×4 SPF to US$490/1000 bft and SYP to US$465/1000 bft. (Editor's note: This would correspond to a level of approx. 550 US $ to 660 US $/1000 bft or 395 €/m³.)
In an online survey, two-thirds of the conference participants agreed with Cooney's forecasts or expected even higher prices.
