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China still buying lumber as U.S. bounces back


The recent visit by the Council of Forest Industries brought out some of the industry's heaviest hitters, and also the news that lumber markets continue to bounce back.

It was acknowledged by COFI board chair Nick Arkle that China's arrival as a lumber customer went a long way to offset the loss of the U.S. market when the American construction industry collapsed at the start of the global recession. Now China is still buying wood and the U.S. market is showing signs of life again.

"We're never going to walk away from the American market," said Arkle, a manager with Gorman Brothers Lumber based in Kelowna.

"It's huge and they have an insatiable thirst for building, when the conditions are right. And they want our lumber."

Places like Taiwan (Chinese Taipei) and Korea are emerging as potentially strong customers as well, said Doug Routledge, COFI's vice-president of Forestry and Northern Operations, but he cautioned that "you can do more damage than good" by launching ill-prepared trade missions into emerging markets. "We have to understand the culture and their ways of using wood."

That is especially important, he said, when success is being realized in countries that already embrace B.C. wood.

"Japan has always been a strong market for us and it is doing better than maintaining, right now," Routledge said.

Keta Kosman - the editor/publisher of Madison's Lumber Reporter, the B.C.-based lumber industry trade magazine - said the numbers were indeed adding up to modest success beyond regular expectations.

"This is a very unusual time of year for strong demand and especially for rising prices," she said.

"Historically, following the Labour Day long weekend solid wood prices start to fall because most customers will have stocked up on wood needed to finish the year's building and renovation projects. For the time being, continued uncertainty over the U.S. economy is keeping customers skittish about stocking inventory in real volumes. However, this situation is improved over the last few years' experience, providing encouragement that the egregious boom and bust price cycles of late may indeed be behind us."

The overall industry is also being served by product development. The economic crisis caused sawmills to have to innovate to survive, since the standard saw-log sector was impaired by the loss of the usual American construction activity. The most prominent byproduct that succeeded for saw mills was the emerging pellet industry, which utilized the leftover woody debris from the sawing process and made a merchantable product out of the garbage.

Some companies used those leftover materials to burn for energy production as a byproduct.

"The new frontier for forestry is around the biochemistry," said Routledge.

Scientists are studying wood at the molecular level for futuristic products not yet even conceived of.

The smart jobs of the forest industry are already coming to pass, said COFI's new CEO James Gorman. There will always be a need for harvesting, silviculture, milling and the lumber uses of wood, but new technologies are emerging now to partially offset the lost jobs in the saw-log part of the business.

"We are a bit behind the curve from where we'd like to be, but not terribly behind," said Gorman. With the saw-log side showing concerted signs of recovery, he said, both the old-style forest industry and new-age forest industry will one day in the not-too-distant future be running simultaneously.
 

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