Due to the intricate supply chain and manufacturing processes in the forest products industry, a noticeable shift in the marketplace generally occurs at a relatively slow pace. But global demand for forest raw materials is changing the speed at which the supply chain must react. A recent visible change occurred in the export market to China. In 2015, China increased its purchases of Ponderosa pine logs from the Pacific Northwest while decreasing its purchases of southern yellow pine (SYP) from the US South.
The shift in demand is likely unrelated to any differences in product specifications, but is simply due to the 24 percent appreciation of the Chinese renminbi against the US dollar (USD) from 2014 to 2015. This exchange rate made marginal purchases of SYP from the South and Doug Fir/Hemlock purchases from the Pacific Northwest cost prohibitive. At the same time, low-cost Ponderosa pine became available in larger quantities because of the availability of salvage logs from the massive Okanogan Complex fire in 2015.
That said, the numbers don’t lie: from 2014 to 2015, Ponderosa pine exports to China increased by 104,204 cubic meters while US South pine exports decreased by 222,718 cubic meters.