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Wood Products Prices in The U.S. 

01-15th January 2011

Report from North America


 Increase in US home sales and starts
Sales of new homes bounced back in November 2010. Sales increased by 5.5% from October to November, according to US Department of Commerce figures. The US South and West accounted for much of increase, while sales in the Northeast and Midwest declined. The inventory of new homes on the market has fallen to below 200,000 units for the first time in 42 years. The National Association of Home Builders is concerned that the lack of financing for construction will result in a very tight market when demand for new homes improves this spring.

Housing starts increased slightly in November to 555,000 (seasonally adjusted rate), up 3.9% from October according to the latest data from the US Department of Commerce. Multi-family housing starts declined by 9.1% from October while single family starts increased by 6.9%. The number of building permits authorised in November fell by 4% from the previous month due to a large decline in permits for apartments. The number of permits issued can be an indicator of future building activity.

Unemployment dropped to 9.4% in December 2010, the lowest rate in 19 months. However, this drop includes people who have stopped looking for work. Given the strengthening economy, many analysts expected a stronger increase in employment. Ben Bernanke, Chairman of the Federal Reserve, reported to the US Congress on 7 January that it could take four to five years before the unemployment rate drops to the usual rate of around 6%.

Canadian housing starts have moderated
While housing starts in Canada have recovered well from the impact of the recession, the number of new starts declined towards the end of 2010. Canada¡¯s unemployment rate held steady in December at 7.6%. Compared to December 2009, employment increased by 2.2%. The Canada Mortgage and Housing Corporation forecasts slightly improving housing starts in 2011 compared to 2010. Little change is expected in the main drivers of home construction in 2011, namely the economy, mortgage rates and immigration.

McGraw-Hill redicts 25% growth in single family housing starts in 2011
The 2011 Construction Outlook report by McGraw-Hill predicts a significant rebound in almost all construction markets in the US. Single family housing is expected to increase by 27% in value and 25% in the number of units built from 2010 levels. Multi-family housing is forecast to grow by 24% in value and 23% in the number of units built. Commercial building construction is predicted to grow by 16%, but the level of activity will still be below normal for hotels and offices. Institutional buildings are expected to decline by 1% from 2010 because there are few public funds to build schools.

Upswing in home renovation spending expected for 2011
2011 may see strong growth in homeowner improvement spending according to data collected for the Leading Indicator of Remodeling Activity by the Joint Center for Housing Studies at Harvard University. Based on the indicator, spending on home renovations could increase by more than 10% in the first half of 2011. As housing prices stabilise and consumer confidence improve, homeowners are more likely to invest in their homes and carry out deferred replacements and repairs.

CARB revises dates to sell non-compliant composite wood products
The California Air Resources Board (CARB) has released a guidance on 6 January that clarifies and revises some of the dates until when composite wood products must be sold that do not comply with current formaldehyde emission standards. California introduced formaldehyde emission standards for hardwood plywood, particleboard, and medium density fiberboard in 2007. The first emission standards became effective on 1 January 2009. Principally, all composite wood products and finished goods sold, offered for sale, supplied, used, or manufactured for sale in California after 1 January 2009, must comply with the applicable emission standards. However, the guidance extends the allowable sell through of some of the products manufactured prior to 2009. The full guidance for manufacturers, importers, distributors, fabricators and retailers of composite wood products and finished goods is available here:
http://www.arb.ca.gov/toxics/compwood/compwood.htm


BKB Hevea Flooring Products from Malaysia expands into US market
Malaysian BKB Hevea Flooring Products announced that their cost-effective engineered hardwood flooring products are now imported into the US. The flooring is made of a hevea (rubberwood) core, a hardwood top layer and a softwood veneer back. FSC-certified flooring will be available in the North American markets.

Canadian company to log submerged hardwoods in Ghana
Ghana¡¯s parliament has ratified an agreement that will allow Canadian Triton Logging to log the submerged timber in the Volta Lake reservoir. The reservoir was created for a hydroelectric plant in 1965. Triton Logging¡¯s subsidiary Clark Sustainable Resource Developments Limited will have exclusive rights to 350,000 hectares of the reservoir. The company intends to sell the timber on domestic and international markets.

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Abbreviations

LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down

Source: ITTO'  Tropical Timber Market Report

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