The Covid-19 pandemic and associated government stimulus measures are turbo-charging growth in the housing market. The structural shift to remote working is triggering a migration away from multi-family dwellings in urban areas to more affordable single-family homes in the suburbs. Lockdown measures and government stimulus cheques have boosted consumer savings. This in turn is leading to a surge in home improvements – from renovating exterior decks to building home office additions.
In 2021 European softwood consumption is forecast to grow by 3.5 million m3 to 87.4 million m3. Strengthening demand from China is also playing a pivotal role in global timber demand. In 2020 as buyers were unable to travel overseas on purchasing trips, inventories depleted. For example, between early fall of 2020 to January 2021 softwood timber inventory in the greater Shanghai area fell from 1.5 million m3 to 600,000m3.
An additional factor impacting wood markets is the global shortage of vessels and containers. The pandemic has impacted ports due to labour shortages and have curtailed the number of containers and ships in operation. As manufacturers gear up for recovery a number of shipping companies are quickly returning containers empty to service higher valued consumer exports. Container rates have more than doubled in the past year, resulting in shortages of containers available for return bound traffic. Shipping delays and declining container availability has led to eroding of port timber inventories. Industry observers expect that it will take until the end of this calendar year for container availability to normalise.
In time global timber prices are expected to moderate from peak levels, however it is important to recognise that stable export programs are underpinned by fair and internationally competitive market prices.