British Columbia's exports of lumber to China weaken on slower Chinese construction market, but industry experts still project 20% rise in sales to C$1.3B during 2012

Audrey Dixon

LOS ANGELES , February 16, 2012 (Industry Intelligence) –

The British Columbia lumber industry, which saw great growth for much of last year in exports to China, is seeing a slowdown in 2012 because of a weaker construction market there, the Globe and Mail reported Feb. 14.

In 2011, British Columbia sold C$1.07 billion of lumber to China, up 60% from a value of C$668 million in 2010 and more than triple the sales in 2009.

Industry executives project an increase in sales during 2012 of about 20%, for a total of about C$1.3 billion, according to RBC Dominion Securities analyst Paul Quinn, the Globe and Mail reported.

Inventories of wood in China are high. In December, British Columbia sold just C$67 million to China, said Statistics Canada. December, the second-slowest month of 2011, historically ranks the highest in sales.

Quinn said that, although orders are currently picking up a little, he expects sales to China to remain weak through the first quarter.

China has become a vital market for British Columbia’s forest industry amid the U.S. construction industry downturn, the Globe and Mail reported.

Last year, the province's lumber producers sold 30% of output to China compared to 20% a year earlier. In 2011, the U.S. bought 40% of British Columbia’s lumber production, down from half the year before.

However, the province’s lumber sales to China fell every month since September, the Globe and Mail reported.

Canfor Corp. CEO Don Kayne visited China earlier this month on a trade mission. His company sees large potential in the Chinese government target of 10 million new units of affordable housing each year through 2015.

The Canadian government and industry have built strong connections and made progress with the vice-minister of construction, said Kayne a week ago from Beijing.

The primary source of this article is the Globe and Mail, Toronto, Ontario, on Feb. 14, 2012.
 

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