U.S. Lumber Demand Sends European Lumber Prices Higher

Unrelenting building demand, the result of the COVID-19 pandemic, amongst other things, has kept U.S. sawmills from being able to catch up with that unabated demand. With U.S. builders needing lumber coverage, but rarely asking about price, suppliers have been forced to look for product sources apart from their traditional suppliers. Europe has been able to fill that void, as it is one of the few parts of the globe with a surplus logs and finished wood products due to a beetle infestation that killed large swaths of trees that must now be harvested. U.S. demand means beetle-killed wood in Europe could sell faster than expected, although international shipping and U.S. trucking constraints limit supply chain capabilities. USDA Foreign Agricultural Service data shows that the U.S. continues to buy the biggest share of its foreign forest products from Canada, but imports from the European Union reached an all-time high in 2020, nearly tripling 2019’s amount. The biggest jump from European countries came from Sweden, which rose a dizzying 1,300%. Imports from Europe remained strong in the first three months of 2021, up 37% from the same period a year ago. According to Hans-Joachim Hormel, the head of Baden-Wuerttemberg State Forest lumber sales in Germany, even with “insane” Chinese demand for European lumber, the strength of U.S. buying is the largest factor supporting prices. Hormel went onto say that U.S. buyers have lower expectations for quality, so the damage and discolorations in lumber from beetle-infested forests make it ideal for export stateside.