The Unintended Consequence of China's Lumber Demand, OSB Prices Soften

Many people have heard me talk about the unintended consequences that result from situations in the lumber market. While China's demand for lumber has helped the lumber industry in North America, one unintended consequence could be that there will be less lumber supply available for U.S. homebuilding, and prices will rise as domestic demand increases.

As China's demand for lumber increases, it could reduce lumber available for U.S. homebuilding. China in now the second largest user of North American lumber. Only the United States uses more. Low-grade lumber that would be used for building houses in Atlanta is used largely in concrete forming when shipped to China, and also in furniture construction. Inventories are low for building material supply yards for this time of year. However, there is very little residential construction in Georgia, and the record-breaking rains of the last week have made jobsite delivery nearly imposible.
Lumber sales to China continue to see growth
B.C. continues to ramp up lumber shipments to China and has already exceeded its lumber shipments to the Asian economic giant over last year despite the difficult global economic conditions.
Typically, OSB prices start to fall at this time of year, unless there is tropical activity to stimulate buying. Mill files are growing shorter, and secondaries are trying to move off contract loads. Two Atlantic Ocean weather systems being watched
The National Hurricane Center is monitoring two systems in the Atlantic Ocean this morning.