The external market rose
Since the beginning of the epidemic, US timber prices have been on a roller coaster track of rising and falling prices. Timber prices began to climb again in December after falling sharply from a record high in May last year. According to statistics, wood is now about 22% lower than the peak, but it is still about three times the average price before the pandemic.
There are several reasons behind the rise in timber prices, but the main reason is that sawmills in the United States cannot keep up with demand. The output of sawmills decreased at the beginning of the epidemic. Although it has recovered some, it is still plagued by labor shortage. Compared with the increase of housing construction, the output of sawmills is obviously backward.
Other problems leading to higher timber prices include continued supply chain disruptions, Canadian timber import tariffs and a decline in supply due to the unusually strong wildfire season in the western United States and British Columbia.
Insufficient power of domestic demand
At present, there are few orders in China, and the operating rate of the national timber market is about 50%. The main reason for the rising price is the rising cost of raw materials. Log traders lost almost all of their profits in the second half of last year. Now there is no way out but to rise.
In addition, China's dependence on foreign timber has increased year by year, and has become the world's largest timber importer. Now the sea freight has been soaring, the foreign quotation is also rising, and the arrival price of logs will continue to rise. Superimposed on the recent rise in crude oil price, the turnover and transportation cost of timber has increased, the logistics cost has increased, and the market that flour is more expensive than bread has to rise.
The downstream demand of timber is mainly driven by infrastructure and real estate, but at present, the domestic demand is limited. Most of the projects were difficult to collect money last year. In addition, due to the cold weather in the northern region, the construction site has not started yet. Due to the impact of the epidemic, the construction site opening meeting is generally delayed this year, and the market is finally demand-oriented. The next price is still uncertain. In the face of this year's timber market, we should be cautious, calm and careful consideration.
On the whole, although the supply and demand sides are recovering steadily, the continuous increase of raw material prices, shipping, freight and labor costs has sounded an alarm to wood enterprises, and the cost of wood enterprises has been pushed up. Finally, whether the wood market can continue to improve depends on demand.