International Timber Market Forecast for The Second Half of 2024

Looking back at the first half of the year, both ends of the market supply and demand showed weakness, and wood prices continued to hover at a low level. Entering the second half of 2024, the international timber market continues to face multiple challenges such as the global economic slowdown, the pressure on transportation costs due to the Red Sea crisis, the tightening of raw material supply and the surge in production costs.

Below is an in-depth analysis of the latest developments in the major timber markets in North America, Europe, Africa, Oceania, Asia and Latin America, and a forecast of the market trend in the second half of the year.

North American markets: Prices under pressure, outlook bleak

The North American lumber market has been in trouble recently, and futures prices have fallen sharply, hitting a low of $452.50 per thousand board feet, down nearly 30% from the peak of the year. In particular, the price of key varieties such as southern ponderosa pine fell to a record low of only $335, highlighting the serious lack of market demand. The sharp rise in labor costs and production expenses has plunged many sawmills into losses and forced capacity reductions. Even with the arrival of the traditional peak season, wood prices still have not seen obvious signs of rebound, and the market is generally expected to maintain a low trend in the second half of the year.

European market: Rising costs and tight supply

The European timber market is also facing serious challenges. The high cost of sawmilling, coupled with difficulties in extracting logs caused by bad weather in Northern Europe, has made the supply of raw materials for sawmills tight, making it difficult to sustain the production of specific specifications.

Rising log and production costs in Scandinavia and a moratorium on spruce harvesting in Latvia due to plant health concerns have further exacerbated the market shortage. In addition, Finnish timber prices have soared to record highs due to the ban on imports from Russia. Although there is a risk of shortage of softwood sawn timber in some countries, the overall market demand is weak, and the supply of wood exported to China and other regions is expected to remain tight. At the same time, the upcoming 

implementation of the EU Zero Deforestation Act (EUDR) will also have a profound impact on the EU timber import and export industry.

African market: Policy adjustment, supply recovery

The African timber market is expected to turn a corner in the second half of the year. Reduced rainfall in Congo, improved transport conditions and relaxed log export policies are expected to release a large backlog of stocks.

Despite challenges such as power outages, Gabon plans to increase sawn timber production (* from 1.33 million cubic meters in 2023 to 1.35 million cubic meters in 2024) to meet market demand. Some countries, such as Cameroon, are actively stockpiling for the coming rainy season. With the steady growth of China-Africa timber trade, it is expected that African timber will mainly supply Asian markets such as China and the Philippines, and occupy a certain share in the European market.

Oceania market: Low production, stable demand

The Oceania wood market presents a contradictory situation of low production and stable demand. New Zealand's plantation production is sluggish, but some timber merchants have maintained normal operations with stable market demand and price support.

Although the volume of logs harvested in Australia has decreased, the average price has increased significantly, reflecting the strong demand for high-quality wood. However, with the tightening of the government's management of state-owned forests and the implementation of the logging ban, Australian timber exports may decrease in the future, and prices are expected to rise further.

Asian market: Rainy season, high shipping costs

Timber production in Asia has been severely affected by the rainy season, with reduced timber harvests in Thailand, Indonesia, Malaysia and other countries. At the same time, the Red Sea crisis and the arrival of the shipping season have pushed up the cost of shipping, further squeezing the profit margin of the timber trade.

Log stocks in the Chinese market are at a low level, downstream demand is weak, and subsequent demand recovery is uncertain. The plate market is facing the double pressure of price inversion and inventory reduction at home and abroad. It is expected that in the coming period of time, China's timber market will continue to be affected by changes in inventory structure and downstream demand.

Latin American market: Frequent natural disasters and export disruptions

The Latin American timber market has been hit by a combination of extreme weather and port problems. Frequent rainfall in places such as Brazil has affected timber harvesting and transport; Port congestion, labor strikes and other factors, as well as the Amazon rainforest protection policy, will further limit the export of wood products. In the short term, these obstacles are difficult to overcome, and the prospects for Latin American timber exports are worrying.

In summary, the international timber market will continue to face many challenges in the second half of 2024. This reminds domestic regional wood importers to adjust their strategies according to their own actual conditions to cope with the impact of market changes.