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Industry News
A global wood shortage looms.
The drivers: China's demand for high-grade logs used to make dimensional lumber, and the EU/U.S. push for biomass power (wood chips and wood pellets, made from lower-grade round wood and waste wood, for residential, commercial, and industrial applications, including space heating, electricity generation, and co-firing with coal in coal-fired power plants).
Already, 60% of the logs that are produced in the world go to China. A major exporter is neighboring Russia--specifically, Siberia, home to the world's largest forest, for the time being. It is slated for extinction in 20-30 years because of illegal logging--about a third of all logs exported to China are cut illegally--which is controlled by Russian organized crime.
Demand for wood from certified sustainable sources will increase dramatically over the next two-to-three years, analysts say. That rules out most African and South American suppliers, which means that wood from Canada and the United States will rise in value.
An upturn in the hard-hit North American dimensional lumber markets will further drive demand for wood.
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