B.C. forest industry poised for growth, analysts say

Posted by Rumin Mann
May 10th, 2011

Canaccord Genuity has a bullish outlook on the lumber market for mid – to late 2011 and 2012. They believe that supply side constraints, such as the implications of the mountain pine beetle in western Canada, will act as drivers for upward pressure on prices later in 2011.
The gradual U.S. housing recovery offers a source of export growth because 25% of the demand for our lumber is derived from U.S. home remodeling needs and that figure is expected to turn up sharply in 2011.

According to Canaccord Genuity, increased exports to Asia should also absorb available Canadian lumber. Government of B.C. statistics indicate that Canadian offshore export shipments this year are growing at a rate of 34%. China is one of the biggest drivers of Asian growth and, in January 2011, shipments of B.C. softwood lumber to China were double the volume shipped a year earlier.

TD analysts state that China has surpassed Japan as the largest export market for North American lumber; acquiring 46.3% from North American offshore exports. Although China primarily uses lumber for industrial applications, TD believes there is significant room for growth in the wood-frame housing market.

Source: BC Local News – May 5, 2011

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