By Ross Marowits
THE CANADIAN PRESS
MONTREAL - Canadian lumber exports to China are on pace to reach a record US$1.2 billion in 2011, an industry publication has forecast.
Meanwhile, Wood Resource Quarterly also said softwood log and lumber exports to China from the United States and Canada should double this year to an estimated US$2.6 billion.
The North American share of log and lumber import volumes to China has increased to 18 per cent in 2010 from four per cent in 2005.
The value of lumber shipments from Canada is up from just US$55 million in 2005.
"Many North American log and lumber suppliers have the opportunity to expand their export sales in the coming years and it is likely that their presence in the Chinese market will grow," said the report.
Most Canadian exports come from British Columbia, which has a massive supply of timber that has been killed by the mountain pine beetle over the past 15 years.
Canfor (TSX:CFP) CEO Don Kayne said earlier this year that he believed the industry could double the volume of wood going to China over the next five years, while West Fraser Timber (TSX:WFT) CEO Hank Ketcham said in July that his company set a record in the second quarter by shipping more than 30 per cent of its Canadian production to China and Japan.
A recent report from the TD Bank suggested a ray of light for Canada's lumber industry because of growing demand from China and an expected recovery in the U.S. homebuilding market late in 2013.
Economist Leslie Preston said that conservative estimates suggest China's imports of wood products will grow at 10 per cent per year through 2015.
Reduced U.S. housing starts and tariffs imposed by the softwood lumber agreement with Washington have forced Canadian producers to seek alternative markets.
Production has increased in the past year helping sawmills in the western regions of both countries. The Seattle-based quarterly said some sawmills are exporting up to 40 per cent of their output to Asia.
While Canada has raised lumber shipments to China, the United States has expanded exports of logs to Chinese lumber manufacturers.
The value of West Coast log exports is expected to surpass US$900 million, up from only US$42 million four years ago, according to Wood Resource Quarterly, which tracks the lumber industry in key regions of the world.
Canadian businesses are eager to expand their sales to the world's second-largest economy, which is also a major buyer of other Canadian resources, including coal and fertilizer and grain.
The federal government said this week that it was closing in on a key trade agreement to boost economic ties with the growing economic superpower.
15:54ET 05-10-11
