Lumber prices were higher during the first quarter of 2002 and then proceeded to move lower only to move somewhat higher in the fourth quarter. There were a number of factors affecting the lumber market. There was an ongoing trade dispute between the U.S. and Canada which led to some buying of lumber on the expectation that supplies could tighten. Lumber also found support as the U.S. housing sector remained robust as interest rates reached the lowest levels in many years. The overall U.S. economy seemed to be slowly improving though the improvement was uneven at times.

The U.S. department of Agriculture reported that U.S. exports of hardwood logs in the January-September 2002 period were 1.74 million cubic meters, up 8 percent from the same period in 2001. For all of 2001, hardwood log exports totaled 2.09 million cubic meters. The major export destination was Canada. In the January-September 2002 period, Canada took 1.21 million cubic meters or 70 percent of the total U.S. exports. For all of 2001, Canada took 1.50 million cubic meters. The next largest market was Honk Kong which took 78,842 cubic meters in the first nine months of 2002. China took 76,724 cubic meters followed by Japan with 68,418. Other large buyers included Italy and Germany.

U.S. exports of hardwood lumber in the January-September 2002 period were 2.12 million cubic meters, an increase of 7 percent from the same period in 2001. For all of 2001, exports were 2.63 million cubic meters. The largest market for U.S. exports was Canada. In the first nine months of 2001, Canada imported 724,515 cubic meters, an increase of 4 percent from the same period in 2001. Canada imports about 34 percent of the U.S. hardwood lumber. The next largest importer was Hong Kong with 184,545 cubic meters, an increase of 14 percent from 2001. China imported 184,346 cubic meters, an increase of 78 percent from the same period in 2001. Other large importers include Spain, Italy and Mexico.

U.S. exports of softwood lumber in the January-September 2002 period were 1.30 million cubic meters, a decline of 10 percent from 2001. For all of 2001, exports were 1.87 million cubic meters. Canada was the largest market for U.S. softwood lumber. In the first none months of 2002, Canada's imports of softwood lumber were 304,080 cubic meters, down 15 percent from the same period in 2001. The next largest market was Mexico which took 208,052 cubic meters, an increase of 2 percent from 2001. Japan imported 194,578 cubic meters of softwood lumber, down 42 percent from 2001. Other large importers included the Dominican Republic and China.

U.S. exports of softwood logs in the first nine months of 2002 were 4.56 million cubic meters, down 10 percent from 2001. For all of 2001, U.S. exports were 6.61 million cubic meters. The major market for U.S. softwood logs was Japan which in the first nine months of 2002 imported 2.14 million cubic meters, down 14 percent from the same period in 2001. Imports by Canada were 1.87 million cubic feet, down 5 percent from 2001. Other large buyers include South Korea and China.

U.S. exports of wood poles in the January-September 2002 period were 930,631, an increase of 58 percent from the same period in 2001. For all of 2001, exports were 850,889. Exports of softwood plywood in the first nine months of 2002 were 259,508 cubic meters, down 8 percent from 2001. Exports of hardwood plywood were 115,914 cubic meters, an increase of 8 percent from 2001. Exports of particle board in the January-September 2002 period were 163,765 cubic meters, up 13 percent from 2001.

Futures Markets

Lumber futures and options are traded on the Chicago Mercantile Exchange.

Excerpted from the CRB Commodity Yearbook. For more information on CRB products click here

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