China now officially the largest overseas market for B.C.’s softwood lumber

Wednesday, 02 March 2011 16:42

Contributed photo - This conceptual drawing is an example of a prefabricated apartment complex in B.C. that is to be assembled in just three days at a Green Building Show in Beijing, China, as part of a demonstration project. Forests Minister Pat Bell said prefabricated construction represents a huge opportunity for B.C.’s softwood lumber exporters to China, where approximately six million housing units are built annually.

By Matthew Bains

NORTHEAST – China is now the largest overseas market for B.C. softwood lumber and could surpass the United States as the largest overall importer in a few years, reports B.C.’s Minister of Forests, Mines and Lands, Pat Bell.

Bell made the announcement recently following a record month last December, which saw 420 million board feet of lumber exported to China. He said if that pace was realized over a full year, B.C. would be exporting over five billion board feet to China, narrowing the gap with the U.S., which imported just under seven billion board feet last year.

Contributed photo - At a Feb. 22 press conference, Minister of Forests, Mines and Lands, Pat Bell, said China’s demand for softwood lumber could soon surpass the needs of the U.S. market.

“This market continues to grow at a pace that is unbelievable,” Bell said in a press conference on Feb. 22. “I believe perhaps in the next couple of years we could see a time where China is receiving more lumber than the U.S.”

Actual exports to China were an estimated 2.8 billion board feet in 2010, valued at about $687 million, more than double the value of shipments in 2009. Bell said he estimates B.C. could export four billion board feet at a value of about $1 billion this year.

“That would again be dramatic growth and not something anyone would have predicted just a few years ago.”

The minister said B.C. has an exciting opportunity to expand that market by taking part in a demonstration project at the end of this month. He said the province would supply lumber, at a cost of about $100,000, to construct a three-storey, nine-unit prefabricated apartment that will be assembled in just three days at a Green Building Show in Beijing.

“The real opportunity for China is modular or prefabricated construction,” said Bell. “In an average year the Chinese build between six and seven million housing units in the six-story walk-up apartment style of construction for which this building process would be most suited.”

He added that market would be much greater than the province could supply and would likely drive the global prices for softwood lumber up.

China’s appetite for lumber has in no small part contributed to the re-opening of 24 mills across the province, said Bell.

“The industry has definitely rebounded. We are seeing the type of activity in the forest industry we haven’t seen since the mid-2000’s, and I’m feeling very optimistic about the future of forestry as we move through 2011.”

However, Bell said, transportation issues and specifically port capacity, is the biggest challenge to growing export markets. He added his colleague, Shirley Bond, Minister of Transportation and Infrastructure, is working hard to have port capacity expanded in Vancouver and Prince Rupert, and is also looking for opportunities in Kitimat and Stewart.

“We know it’s probably our biggest single challenge in terms of increasing both mineral exports and forest product exports, and also potentially energy exports, so that is a key area of focus for our government in the coming years,” Bell said.

The depressed market in the U.S. following the collapse of the housing market continues to be a challenge, Bell said, and exports to the U.S. were down to 36 per cent of total exports, whereas historically, that market took upwards of 70 per cent of total production. He added that the U.S. is still an important market and remains a focus for marketing efforts.

However, he said, the growth of the Chinese market, as well as in other overseas markets such as in Japan could give Canada more leverage when it comes time to negotiate a new Softwood Lumber Agreement with the U.S. in 2013.

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