China fever has gripped the Canadian lumber industry, according to a local industry analyst.
Vancouver’s International Wood Markets Group said Friday that shipments of Canadian lumber to China had soared 97% in the first six months of 2011 compared with the same period in 2010.
Most of that lumber is manufactured in B.C., the group said, noting that shipments are increasing so rapidly that total B.C. lumber shipments to China could hit seven million cubic metres for the year.
“At this rate of shipments, it appears that China could import up to 35% of total B.C. lumber production in 2011,” wrote Wood Markets Group in an update published Friday.
Still, that growth comes at a time when the U.S. housing market, which is B.C.’s number 1 lumber customer, remains at historic lows.
The province’s two major lumber producers – Canfor (TSX:CFP) and West Fraser Timber Co. (TSX:WFT) – reported decreases in net income in the second quarter of 2011, despite the increase in shipments to China.
Both companies noted that Asian demand has helped them feed their bottom lines, but a true recovery for B.C.’s most storied industry won’t happen until the U.S. starts building single detached houses again.
“We are seeing several positive indicators in lumber markets, especially Asia where we shipped record-high volumes in the quarter,” commented Canfor president and CEO Don Kayne.
“That said, a sustained recovery of lumber markets and prices will not begin until there is a turnaround in the U.S. economy, and particularly in the housing sector.”
Joel McKay
Twitter:jmckaybiv