The devastating earthquake and subsequent tsunami that hit Japan will likely drive demand for B.C. lumber, according to a Scotiabank economic report released today.
"Reconstruction in Japan will boost demand and prices for lumber, OSB and plywood, especially from Canada's West Coast over the next six to 12 months," said Patricia Mohr, vice-president, economics and commodity market specialist at Scotiabank.
However, the need for construction material will also be considerable over the coming years.
"B.C. and Alberta forest products companies, specialists in high-quality, Japanese-specification J-grade lumber, have offered their support to the Japanese government in home rebuilding," commented Mohr.
"While it will take several months for Japan to map out its plans for reconstruction, the Japanese government has already contacted wooden prefabrication plants in Japan to quickly build a large volume of factory-built homes as temporary dwellings in devastated areas. Construction of permanent homes will come later." (See "Richmond plant to build temporary homes for Japan" – BIV Business Today, March 25.)
Japanese orders for J-grade lumber and OSB are picking up for West Coast mills already.
About 70,000 buildings were damaged (the equivalent of 8.6% of Japanese housing starts, totalling 813,000 units in 2010).
Japan has a wood-first policy for government-funded or sponsored buildings, with wood considered an environmentally friendly product, more capable of withstanding earthquakes than other building materials.
Japan is one of the largest importers of wood products in the world. In 2010, the country imported wood raw material (logs and chips) and processed wood products valued at more than $10 billion.