Boost in lumber production no boom

Posted by Rumin Mann
October 8th, 2010

A 20-per-cent increase in lumber production at B.C. sawmills in the first seven months of 2010 is better news for the province’s beleaguered forestry industry, but that really depends on where the mills are.

Statistics Canada reported Wednesday that B.C. sawmills produced almost 15.8 million cubic metres of lumber to the end of July, up nearly 21 per cent from the same period of 2009.

That is slightly more than half of Canada’s total production — almost 31 million cubic metres — over the same period, an increase of almost 20 per cent from 2009.

However, while some mills in B.C.’s northern and central Interior have opened or added shifts, others remain curtailed. And which mills operate depends on whether they can tap export markets that have become more lucrative while the U.S. housing construction sector remains stagnant.

“There are reasons why B.C. is quite unique right now in the world,” Russ Taylor, president of the consulting firm International Wood Markets, said. “We have very good access to the Pacific Rim and very low sawmilling costs.”

Taylor added that the depressed U.S. lumber market has dragged prices down to levels that are more attractive in export markets, such as China and Taiwan, that are normally shut out when the U.S. market is strong and buyers are willing to pay premium prices.

“Shipments from B.C. to the U.S. were probably up five to 10 per cent [in 2010],” Taylor said, “but shipments to China were up 60 per cent through the first six months this year, and that volume is quite substantial.

“China is now our second largest [export market]. It used to be Japan.”

However, while the picture has improved for some mill communities, it has not lessened the industry’s struggles to a significant extent.

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