Updates on B.C. exports reaffirm the reality that market shifts to Asia for B.C. resource-based products are lending strong support to B.C. forest products. This at the same time as data supports news of the U.S. housing market recovery.
The impact of the Chinese market is developed in today’s Vancouver Sun article here by Gordon Hamilton in which he reports that the emergence of China has brought massive change at every level of the province’s resource economy. North American buyers of B.C. lumber are experiencing the impact of local producers who are increasing their exposure to China. It is evident that this development, in combination with the recovery of the U.S. housing market, is lending support to strong lumber prices. David Elstone, forest industry analyst at ERA Forest Products Research, states that “If the Chinese were to stop buying today, the North American market would be in massive disarray.” Asia is now firmly the growth centre for B.C. resources, according to Elstone.
Total B.C. wood-products shipments to China have grown from $58 million a year in 2003 to $1.358 billion in 2012. The increase is dramatic. We’re told that Canfor now counts on China for 25% of its revenue, and that president Don Kayne believes Canfor’s exports to China will double over the next five years. How that prediction will be supported in the face of fibre supply constraints remains an open question.