Over the past year, cutting costs grew at a significantly lower rate than prices for lumber. According to the analysis by Wood Resources International, this is the reason for a yield increase of the international timber industry. In the United States, for instance, lumber prices have been subject to an increase of 40% since the beginning of 2017 and recently reached their highest level in over 30 years. During the same period, cutting costs remained unaltered in the south of the US while they gained 28% in the west. Canada paints similar picture.
The European gross margins of 2018 are also on a very high level. In the north, the highest level in four years was registered while other parts of the continent reached a level that has not been observed in the past ten years.
Not all countries are benefitting from this development, though. Sawmills in Eastern Russia, New Zealand and Brazil are confronted with the opposite development. In Siberia, for instance, the cutting costs to lumber price ratio dropped by 21% in the past three years and is currently at the lowest level since 2013. This is explained by the increasing roundwood price and growing competition in the region.
