Asia is growing hungrier for American wood products, and producers in the Northwest are delving deeper into exports even as domestic lumber demand rebounds from an epic building slump.
Representatives from 15 Chinese and three South Korean companies are in Coeur d’Alene this week to see what more the Inland Northwest has to offer and build trade relationships.
The delegations toured mills Wednesday in Kettle Falls and Colville and attended a conference on small-diameter logs and wood exports Thursday at the Coeur d’Alene Resort.
Exports of both logs and finished wood products provided a lifeline to many Northwest mills during the recession, industry representatives said.
“I believe many companies have learned a lesson from the economic downturn. Before that, not many companies were interested in exporting simply because the market here was good,” said Xu Fang, director of American Softwoods, a consortium of U.S. softwood trade groups. “They need to diversify their business.”
Xu, who is based in Shanghai, said China is interested in Douglas fir, Western hemlock, cedar and ponderosa pine from the Northwest.
“Wood products coming from the Pacific Northwest have a very good reputation,” he said. “There’s a high demand for those products to be used in construction and in residential applications.”
But not for framing or finishing work, like in the U.S., Xu said. Rather, much of the lumber shipped from this region to China is used for concrete forms, underlying layers and even pallets.
Lumber exports to China from Washington, Oregon, northern California and Alaska were up 97 percent in the fourth quarter of 2012, according to the U.S. Forest Service’s Pacific Northwest Research Station. Sixty percent of West Coast log exports went to China in the fourth quarter.
“China will continue to import a large amount of wood products in the near future as long as the prices are reasonable,” said Xiaoping Zhou, a research economist with the station.
Domestic prices have shot up recently as building bounces back across the country, said John Branstetter, sales manager with Vaagen Bros. Lumber Inc., which operates a lumber mill in Colville.
“Prices are up dramatically over a year ago,” Branstetter said. “Everybody’s in a much better mood. The lumber market is way better.”
Even with that turnaround, export markets remain attractive, he said. Vaagen Bros. sells lumber to Australia and some to China, and Branstetter said he expects to open new export channels after Asian buyers toured the Colville mill this week.
China is beginning to show interest in finished products beyond basic lumber, said Kristie McCurdy, manager of International Marketing for Boise Cascade Co., which operates three mills in Kettle Falls and Colville.
“Their market is maturing, so I see opportunities potentially in I-joists (an engineered wood joist) and laminated veneer lumber,” McCurdy said. “We’ve shipped I-joists to Shanghai for a specific condominium project.”
“There’s no doubt that we have built a consistent demand into the Chinese market through softwood exports, whether it be lumber, logs or plywood,” she added. “I don’t think we’re going to see huge peaks here in the next few years, only because prices are higher. But we will have consistent demand.”