Global Market Supply and Demand

The demand for wood and wood products from Asia, particularly China, continues to drive market pricing. Domestic demand throughout North America and Europe remain stagnant due to the collapse of the housing bubble, and turn around of these markets is expected to be slow.

Rapidly increasing oil prices are likely dampen economic recovery in the West, and potentially slow the rate of growth in those parts of the world that still have strong growth. Shipping costs will be most immediately affected.

Rebuilding in Japan and to a much lesser extent in New Zealand from the recent earthquakes will lead to increased uses in those areas. In New Zealand, this will result in wood being used that might otherwise be exported to Australia, China, India, Korea and elsewhere. Japan will likely require increased imports to fill needs.

Unlike the earthquake in Chile a year ago that damaged significant timber production facilities, particularly in plywood production, there is little expected loss in production in the countries recently affected. This helped support plywood prices around the world even as the global recession was still officially underway.