North America: Softwood lumber business has remained sluggish in Q4 as well
After a disappointing first half, expectations at mid-year for the third and fourth quarters of 2011 were low. These expectations were largely realized as demand stagnated and production was more than adequate in meeting both domestic and export consumption. After growing rapidly for more than a year, year-over-year increases in North American exports to China (particularly from Canada) slowed substantially in the second half of 2011. Thus, compared with late 2010 when accelerating optimism over China markets dominated the industry’s outlook, the last half of 2011 was dominated by growing concerns about China’s economic health. However, while growth in exports to China will undoubtedly be much slower in 2012 than in the previous two years, the China export business is unlikely to see a serious retreat anytime soon and will remain a significant pillar of support to North American softwood lumber producers.