US lumber supply falls due to a drop in Canadian shipments

Softwood lumber available to the US market in 2022 totaled 50.316 billion board feet (bbf), a 2.4% decrease from 2021 but the second highest total in 15 years.

A notable drop in shipments from Canada and a decrease in US production were responsible for the overall decline. However, a surge in offshore imports coupled with a sizable slide in US exports nearly offset the difference.

Lumber available to the US is calculated by adding domestic production and imports and subtracting exports.

Factors that reduced softwood lumber demand

Rising mortgage interest rates through much of 2022, combined with a slowdown in the repair and remodel sector, dampened softwood lumber demand compared to a year ago. The slowdown and subsequent price deterioration led to a spate of production curtailments and closures in Western Canada. Furthermore, some producers in Canada focused sales within their own country or offshore, citing breakeven costs and the potential duty ramifications of selling at or near them.

However, returns in the US dwarfed those of other consuming nations, leading to a 20.7% jump in non-Canadian imports. Shipments from Germany – the second leading supplier to the US behind Canada – climbed 18%, while deliveries from Sweden –
the third leading supplier – surged 51%. Despite the surge in US offshore imports, Canadian shipments were roughly 10 times the volume of the two next largest suppliers.

The 2.5% dip in total US production was due entirely to a decline in US West production. The Southern Pine industry produced a record 22.161 bbf in 2022, up 5.5% from the previous year’s then-record of 20.932 bbf.

US lumber exports plunged 11.9% to 1.082 bbf – the second lowest total in the past 13 years. Mexico surpassed Canada as the most common destination for US lumber exports for only the second time since 1993.

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