How Are Log Exports to Asia Affecting Your Business

How Are Log Exports to Asia Affecting Your Business

September 4, 2018

Americans have always looked to export logs to help increase the bottom line for their company.  In the past it was primarily a small number of high quality veneer logs that were exported.  All that changed a few years ago when the Chinese government made it illegal to harvest logs within their boundaries.

This ruling came at just about the same time that the domestic economy in China was skyrocketing.  As a result, the sawmills located in Asia were forced to increase their purchase of logs in North America to help meet a growing demand.  Up until recently Asian log buyers were paying a 30-40% premium for logs.  This put the logs out of the price range for most mills to purchase the logs and produce lumber for consumption within the US.  The result was a spike in price and spot shortages of the most popular items.

Many suppliers were looking at short term profits over long term relationships.  Until the Chinese government required that logs be fumigated or debarked, it seems like the flow would never end.  Now that the new regulations are in place, there seems to be more lumber available to US manufacturers.  Until the surplus in Asia stabilizes and buyers again approach the market, manufacturers will benefit from slightly lower prices and a more stable supply.

Since 1929 the WPMA has been striving to help our members prosper in a global economy.

For more information please contact Philip Bibeau at 978/874-5445