A Summary of the Global Forest Industry: 1H2024

Wood Industry General
1

Global Timber Markets

1. Sawlog Prices and Sawmill Production

  • Global Sawlog Price Index (GSPI):
    • 1Q/24 Performance: Increased by 4% quarter-over-quarter but was still almost 6% lower than in 1Q/23.
    • Regional Trends:
      • Increases: Significant price increases occurred in Central and Northern Europe.
      • Decreases: Prices fell slightly in North America and Eastern Europe.
  • British Columbia Sawmills:
    • Production Curtailed: Most sawmills reduced production in 2023 and early 2024.
    • Cost Impact: Declining demand for sawlogs reduced log costs by 40% from their 2022 peak, reaching their lowest levels in almost four years.
    • Cost Comparison: Despite the decline, lumber manufacturers still face some of the highest wood costs in North America.
  • Baltic and Nordic Sawlog Prices:
    • Baltic States: Prices continued to fall in early 2024, declining 20% over two years.
    • Nordic Countries: Prices increased by 13% during the same period despite weakening lumber markets.

2. Softwood Log and Lumber Trade

  • Global Softwood Log Trade:
    • Five-Year Trend: Trade has trended downward, with 2023 shipments 28% lower than in 2018, reaching 67 million mÂł, the lowest level in 15 years.
    • Significant Declines: The most notable volume declines were in exports from the Czech Republic, Russia, and Canada. Norway, Poland, Japan, and Sweden maintained export levels due to high demand from neighboring countries’ sawmills.
  • Softwood Lumber Trade:
    • 2023 Performance: Global trade of softwood lumber fell almost 6% year-over-year as demand weakened in the US, China, and Europe, reaching the lowest levels in over 10 years. The most significant reductions were from Russia and Central Europe.
    • China’s Imports: During the first five months of 2024, imports were down 7% from the same period in 2023. Most suppliers saw declines except for smaller increases from the US and Belarus. Russia holds the largest market share at 66%.
    • Nordic Countries’ Exports: Prices increased during winter and spring following a three-year low in fall 2023. April 2024 prices were comparable to April 2023. Shipments to Europe and China decreased, but exports to Japan, Egypt, and the US increased.

3. North American Lumber Production

  • 1Q/24 Performance:
    • Overall: Production was up 3% from the prior quarter but down 1% from 1Q/23, at 24.4 million mÂł.
    • US Production: Fell 3% year-over-year.
    • Canadian Production: Rose 2% with significant increases in Eastern provinces.

4. Russian Lumber Exports

  • Destinations: Most exports from Siberia and the Russian Far East go to China, Kazakhstan, and Japan, with China accounting for almost 90%.
  • Export Trends: Exports to China in the first five months of 2024 fell by 3% compared to the same period in 2023, the lowest volume since 2015. Prices for Siberian lumber increased since late 2023 but were lower in 2Q/24, averaging $219/mÂł, than in 2Q/23.

Global Wood Fiber Markets

1. Hardwood Fiber Price Index (HFPI)

  • Two-Year Surge: The HFPI surged by 24% over the past two years, reaching its second-highest level in over 35 years in early 2023.
  • Recent Trends: Fell slightly in the second half of 2023 and early 2024 but remained substantially higher than its 10-year average.

2. Chinese Wood Chip Imports

  • Reduction in Imports: The pulp industry in China reduced imports in 2023 as the domestic paper industry shifted to wood pulp imports.
  • 2023 Import Levels: Shipments fell 21% from the previous year, reaching their lowest level since 2020.
  • Supplier Trends: All supplying countries reduced sales except for Indonesia. Vietnam and Australia remained the major suppliers, accounting for 83% of the total import volume.

Global Biomass Markets

1. Wood Pellet Trade

  • 2023 Performance: Global trade fell for the first time in at least 15 years. The UK remains the largest importer, followed by Japan and South Korea. Nearly 60% of the world’s trade is shipped to these three countries.
  • UK Imports: Declined by 14% in 2023 to nearly 6.5 million tons. However, demand surged in early 2024, with volumes almost 50% higher than the same period in 2023.

2. Wood Pellet Prices

  • Price Declines: Fell in the past year in most European and Asian markets, with the most significant declines (20%-30%) in South Korea, Belgium, Latvia, and Austria.
  • 2Q/24 Levels: Prices in both Asia and Europe were close to their lowest levels in about two years.

Source: Håkan Ekström, Special Advisor, Global Forest Products

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