18 WESTERN PALLET
Material News Roundup
WTO to Establish Panels
The World Trade Organization has agreed to establish two panels to examine Canada's complaint about duties imposed by the United States on softwood lumber imports, according to CBC.
On March 27, the Canadian government requested that a panel be set up to examine the dispute after consultations with the U.S. in January failed to find common ground. It also requested a second panel to review the U.S. use of differential pricing methodology in its anti-dumping determinations. They argued that the anti-dumping and countervailing duties imposed on softwood lumber imports were inconsistent with U.S. obligations under the agreement on subsidies and countervailing measures and the General Agreement on Tariffs and Trade.
The U.S. objected to the Canadian requests, saying it included claims against the measures that don't exist and therefore couldn't be challenged. It also said Canada stated the matter was urgent even though the final determination in the anti-dumping investigation of softwood lumber from Canada made in November 2017.
Sawlog Prices Up in Western North America
Sawlog prices have gone up universally in US dollar terms in 2017, with the biggest growth occurring in Eastern Europe, the Nordic countries and in Western North America, while the price movements have been more modest in the US South, Latin America and Oceania, according to the Wood Resource Quarterly (WRQ).
Sawlog prices in the Western US have seen a spectacular increase in less than two years. A combination of restricted log flows due to wildfires, low sawlog inventories, and strong domestic lumber markets resulted in a substantial jump in sawlog prices in the western states in the 4Q/17. This came at a time when prices had already been slowly trending upward for over a year. In the 4Q/17, average prices for Douglas-fir and hemlock sawlogs were about 27% higher than in early 2016, making the current price levels the highest recorded since the WRQ started tracking sawlog prices in 1995.
Other notes:
- Trade of softwood lumber reached an all-time-high in 2017 as demand for wood was strong in most key markets around the world. An estimated 126 million m3 of softwood lumber was shipped from forest-rich countries such as Canada, Russia, Sweden and Finland to markets with high consumption of lumber, including China, the US, the United Kingdom, Japan and Germany.
- US softwood lumber production in 2017 reached the highest level seen in ten years, with the biggest increase in the southern states.
The strong market for lumber in the US led to record high lumber prices in both the US and Canada in late 2017 and early 2018.
Over the past two years, prices for imported softwood lumber to China have been steadily rising and reached the highest levels in three years in early 2018.
Although lumber imports to Japan fell in the 4Q/17, the total volume for the year was up slightly for the second consecutive year.
Global trade of wood pellets has grown quite substantially over the past five years, from 11.8 million tons in 2013 to 18.3 million tons in 2017 with Europe being the dominant market.
Most of the investments in pellet production over the past five years have been in the US South, while investments in Canadian capacity have been limited.