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Forest Products

Forest Products

Changes in 2020 from 2019:

  • U.S. total exports of forest products: Decreased by $3.4 billion (9.2 percent) to $33.5 billion
    • U.S. domestic exports of forest products: Decreased by $3.3 billion (9.3 percent) to $32.1 billion
    • U.S. re-exports of forest products: Decreased by $120 million (8.2 percent) to $1.3 billion
  • U.S. general imports of forest products: Increased by $304 million (0.7 percent) to $44.6 billion

The value of U.S. domestic exports of forest products[1] decreased by $3.3 billion (9.3 percent) to $32.1 billion from 2019 to 2020.[2] The decline was especially driven by three COVID-19 related factors: transportation disruptions at international ports; increased domestic demand for e-commerce packaging that resulted from government stay-at-home orders that diverted products from export channels to the domestic market; and the partial idling of industries that supply or purchase forest products in the United States and abroad.[3] Canada, Mexico, and China continued to be the largest destination markets for U.S. forest product exports, but such exports to these trade partners dropped by 5.7 percent, 11.3 percent, and 1.3 percent, respectively. The largest absolute decreases in exports, by value, were for wood pulp and recovered paper, industrial papers and paperboards, printed matter, and lumber (table FP.1).

The value of U.S. general imports of forest products was relatively unchanged, increasing modestly by $304 million (0.7 percent). Canada continued to be the leading supplier to the United States in this sector, providing 42.4 percent of U.S. imports, followed by China with 15.8 percent. The largest absolute increase in imports, by value, was for lumber, which was partially due to record high lumber prices resulting from supply constraints in Canada combined with strong demand in the United States for home improvements. The largest absolute decrease in imports was for printing and writing papers (table FP.2).

U.S. Domestic Exports

The decline in U.S. exports of forest products in 2020 represented the second consecutive year of export declines following several years of expansion. Export declines occurred in all sector digests, with the largest absolute decreases, by value, for wood pulp and recovered paper, industrial papers and paperboards, printed matter, lumber, and printing and writing papers. U.S. exports of wood pellets were one of the few areas of growth.[4] Forest product export values fell both for traditionally large U.S. markets (Canada, Mexico, and China) as well as for newer markets (India, Indonesia, and South Korea) (table FP.1).

Wood pulp and recovered paper is a broad digest within the forest products sector. U.S. exports of goods in this digest decreased by $892 million or 10.7 percent. Within this digest, exports of chemical wood pulp[5] decreased by $677 million and exports of waste and scrap of paper or paperboard[6] dropped by $364 million. Many U.S. industries and services that generate waste and scrap paper, otherwise known as “recovered paper,” were partially idled due to the COVID-19 pandemic, thereby reducing domestic supply available for export.[7] Moreover, demand was lower in key destinations such as India, where recycling plants and manufacturers closed during country-wide lockdowns.[8] China is the largest market for U.S. exports of wood pulp and recovered paper, with $2.2 billion in U.S. exports in 2020. However, in 2020, these exports to China dropped by $102 million or 4.4 percent.[9] The Chinese government has been reducing imports of recovered paper since 2017[10] because of concerns about their quality and impact on the environment.[11] China continued to reduce its import permit approvals as 2020 progressed, culminating in its announcement in November 2020 that it intended to fully eliminate the import of recovered paper in 2021 (table FP.1).[12]

U.S. exports of wood pulp and recovered paper also decreased to another large destination market, India, dropping by $182 million or 27.9 percent in 2020.[13] India experienced a lockdown to slow the spread of COVID-19 that lasted more than two months, during which containers backed up at ports and inland cargo freight “largely stopped moving.”[14] As a result, the scrap paper market saw volatile prices and supply shortages, resulting in importers in India requesting government assistance in the form of transportation subsidies to help move material from the port in Mumbai to paper mills in the more inland area of Uttar Pradesh.[15]

Industrial papers and paperboards, the largest U.S. paper products export, experienced the second-largest change, with exports declining by $578 million or 6.3 percent (table FP.1). More than a third of the decline came from bleached paper and paperboard, coated with plastics, weighing more than 150 grams per square meter[16] and corrugated paper and paperboard,[17] with declines of $146 million (18.8 percent) and $72 million (14.1 percent), respectively. Paperboard is thicker than paper and has many uses because of its sturdiness, including for packaging. Record demand for e-commerce shipping boxes during the COVID-19 pandemic outpaced domestic supply and by November had resulted in “U.S. producers pull[ing] back from export markets while raising their domestic and export prices.”[18]

U.S. exports of printed matter (e.g., books, magazines, newspapers, calendars) decreased by $493 million (13.0 percent) to $3.3 billion in 2020. Exports to Canada, the largest destination market by a wide margin in 2020, decreased by $205 million (12.8 percent) to $1.4 billion. The next three biggest markets also saw decreases in the value of U.S. exports of printed matter, with the United Kingdom, Mexico, and China seeing decreases of $62 million (11.6 percent), $20 million (5.8 percent), and $19 million (14.2 percent), respectively.[19] Printed matter has, for many years, been replaced by increased digitalization. There was also a decrease in the export of printing and writing papers, which dropped by $155 million (17.4 percent) (table FP.1). Stay-at-home orders in major export markets resulting from the COVID-19 pandemic likely accelerated this trend as more remote work further reduced the demand for printing and writing paper.[20]

The value of U.S. exports of lumber declined by $277 million (9.4 percent) to $2.7 billion in 2020, even with the gain in lumber prices which are discussed below. It was the fourth straight year of decline. The largest decrease was in exports to Canada, which fell $67 million (11.6 percent) to $505 million. U.S. exports to the largest export market, China, slightly increased, rising by $4 million (0.4 percent) to $839 million.[21] In January 2020, China and the United States signed the Economic and Trade Agreement between the United States and China (Phase One Trade Agreement)[22] which, by eliminating certain Chinese tariffs on lumber that existed in 2019, was expected to cause a large increase in year over year U.S. lumber exports.[23] Instead, the COVID-19 pandemic and the resulting stay-at-home orders increased domestic demand for U.S. lumber associated with home remodeling; this was coupled with weather and environmental disasters like Hurricane Laura[24] and western U.S. wildfires[25] that limited U.S. supply and kept lumber exports much lower than expected (table FP.1).

U.S. exports of wood pellets increased for the fourth consecutive year to $981 million, an increase of 3.6 percent year over year.[26] European Union (EU) climate change policies have designated biomass (which includes wood pellets) as a renewable energy under the EU Renewable Energy Directive; this designation has incentivized growth in the wood pellet industry, particularly in the United States, the world’s largest producer and exporter.[27] U.S. exports of wood pellets to the Netherlands grew at a notable clip, increasing $59 million (306.2 percent) to $78 million; thus, the Netherlands passed Belgium and Denmark to become the second-largest recipient of U.S. wood pellets behind the United Kingdom. This was likely because the resumption of government subsidies in the Netherlands for biomass resulted in Dutch power companies planning to increase the amount of wood pellets that they were co-firing with coal in 2020.[28]

Despite a decrease in the value of forest products exported to Canada of $519 million (5.7 percent) in 2020, Canada remained the largest export market for U.S. forest products, accounting for 26.8 percent of total exports. U.S. forest product exports to the next-largest export markets also decreased, dropping by $627 million (11.3 percent) to Mexico and $62 million (1.3 percent) to China (table FP.1).

After increasing their roles as U.S. forest product export markets during 2016–19, India, Indonesia, and South Korea all saw decreases in the value of U.S. exports in 2020. U.S. forest product exports to India, Indonesia, and South Korea decreased by 28.4 percent, 32.0 percent, and 8.1 percent, respectively. In contrast, U.S. forest product exports to Vietnam were relatively stable, increasing 2.1 percent; most of this growth was for recovered paper, which has been shifting from China (table FP.1).[29]

U.S. General Imports

U.S. general imports of forest products increased $304 million (0.7 percent) to $44.6 billion in 2020 (table FP.2). The small overall increase in forest product imports was largely due to rising imports of lumber, wood veneer and wood panels, moldings, millwork, and joinery, and logs and rough wood products driven by COVID-19 pandemic related growth in home improvements. These increases more than offset broadly declining demand and imports for printing and writing papers, printed matter, wood pulp and recovered paper, and miscellaneous paper products.[30]

The largest absolute increase in the value of imports was for lumber (traditionally, the largest import digest for forest products), largely driven by record high prices. The Random Lengths Framing Lumber Composite Price, an indicator used to track framing lumber prices in the U.S. market, hit an all-time high of $955 per thousand board feet in September of 2020; it had been $369 per thousand board feet a year earlier.[31] In 2020, the value of U.S. imports of lumber rose by $2.3 billion (39.3 percent) to $8.0 billion (table FP.2).

A large portion of the increase in the value of imports of lumber came from Canada, as imports rose $1.8 billion (42.6 percent).[32] The quantity of U.S. imports from Canada in 2020, however, was essentially unchanged from the previous year. Canada has had less available supply due to a “catastrophic and multi-decade outbreak of bark-eating beetles, followed by a series of historic wildfire seasons.”[33] There has also been a reduction in the Annual Allowable Cut (AAC) in the province of British Columbia, which has reduced production volumes in that region.[34] At the same time, the COVID-19 pandemic stay-at-home orders resulted in “robust [U.S.] remodeling demand” while new housing construction saw only a blip of a slowdown during the initial shutdowns before returning to within a percentage point of pre-pandemic levels.[35] These supply and demand dynamics resulted in record lumber prices in 2020.[36]

The same U.S. housing and housing remodeling market effects previously discussed likely contributed to increases in related digests. For instance, wood veneer and wood panel imports rose by $836 million (15.4 percent) to $6.3 billion in 2020. Canada is the largest source of U.S. imports of these wood products and they increased by $605 million (26.9 percent).[37] The Random Lengths Structural Panel Composite Price, an indicator used to track structural panel prices in the U.S. market, reached an all-time high of $788 per thousand board feet in September of 2020; it had been $339 per thousand board feet a year earlier.[38] Imports of moldings, millwork, and joinery increased by $74 million (2.2 percent). Miscellaneous articles of wood and logs and rough wood products increased by $68 million (3.8 percent) and $57 million (11.1 percent), respectively (table FP.2).

In 2020, U.S. imports fell significantly for printing and writing papers, printed matter, wood pulp and recovered paper, and miscellaneous paper products. These declines can be attributed to the continued rise in digitalization that is “increasingly replacing printed material as more consumers source their reading material online and engage in digital communication.”[39] Printing and writing papers imports were down by $925 million (27.5 percent) and newsprint imports were down $234 million (31.5 percent) (table FP.2). Printed matter imports decreased by $885 million (18.9 percent) and most of this decrease came from China, with imports declining by $602 million (24.6 percent).[40] U.S. imports of miscellaneous paper products decreased $271 million (9.2 percent) to $2.7 billion. Most of this decrease was attributable to imports from China, which decreased in value by $316 million (27.5 percent).[41] Finally, wood pulp and recovered paper imports were down $466 million (13.6 percent) to $3.0 billion in 2020. Imports were down sharply from the two biggest suppliers, dropping from Brazil by $303 million (23.1 percent) and from Canada by $226 million (12.0 percent).[42]

The largest source of U.S. imports of forest products in 2020 was Canada, totaling $18.9 billion (42.4 percent); this represented an increase of $1.6 billion (9.5 percent) from 2019. In contrast, U.S. imports of forest products from China decreased $1.6 billion (18.4 percent). In contrast, imports from Vietnam increased 35.8 percent ($292 million) for a range of reasons.[43] Although U.S. imports of forest products from South Korea and India had been increasing for the previous three years, in 2020 they decreased by 20.2 percent and 5.2 percent, respectively (table FP.2). The drops in 2020 were likely due to COVID-19 related disruptions in both countries.[44]

 

[1] The Forest Products sector consists of 16 product digests. Each USITC sector digest encompasses various 8-digit subheadings in the Harmonized Tariff Schedule of the United States (HTS). For a complete list of HTS subheadings classified in a particular sector or digest, see this data table.

[2] Unless otherwise noted, the export data used in this section are for domestic exports. For more information on trade terminology, please refer to USITC, “Special Topic: Trade Metrics,” Shifts in U.S. Merchandise Trade, 2014, June 2015.

[3] For more information the impact of COVID-19 related shipping disruptions on U.S. merchandise imports, see the Special Topic section of this report.

[4] Wood pellets, which are categorized under HTS subheading 4401.31, are within the FP001 digest (logs and rough wood).

[5] Chemical wood pulp is categorized under HTS headings 4702, 4703, and 4704.

[6] Waste and scrap of paper or paperboard is categorized under HTS heading 4707.

[7] Mongelluzzo, “Top US Shippers: Recyclables Exporters Bracing for Large Drops,” June 3, 2020.

[8] Mongelluzzo, “Top US Shippers: Recyclables Exporters Bracing for Large Drops,” June 3, 2020.

[9] USITC DataWeb/Census, digest FP009, accessed July 1, 2021.

[10] Staub, “China’s Overall Paper Imports Dropped,” January 28, 2020.

[11] Scott and Ireland, “China’s Recycled Wastepaper Import Policies,” November 2019.

[12] Staub, “Paper and Plastic Exports Drop Again in 2020,” February 5, 2021.

[13] USITC DataWeb/Census, digest FP009, accessed July 1, 2021.

[14] Taylor, “India’s Recycling Market Hits the Reset Button,” July 27, 2020.

[15] Dilshad, “UP Paper Mills Feel Heat,” November 30, 2020.

[16] USITC DataWeb/Census, HTS subheading 4811.51, accessed July 6, 2021.

[17] USITC DataWeb/Census, HTS subheading 4808.10, accessed July 6, 2021.

[18] Fastmarkets RISI, PPI Pulp & Paper Week, January 8, 2021.

[19] USITC DataWeb/Census, digest FP016, accessed July 1, 2021.

[20] Fisher International, “Pulp & Paper Industry 2020 Year in Review,” December 22, 2020.

[21] USITC DataWeb/Census, digest FP002, accessed July 1, 2021.

[22] On January 15, 2020, the United States and China entered into a Phase One Trade Agreement that required China to purchase certain U.S. goods and services, and to make structural changes to its economic and trade regime. USTR, Economic and Trade Agreement between the Government of the United States of America and the Government of the People’s Republic of China (Phase One Trade Agreement), January 15, 2020.

[23] Muhammad, “The US Timber Industry has been Crippled,” November 20, 2020.

[24] Powell, “Louisiana Timber Losses from Hurricane Laura,” October 1, 2020.

[25] Sickinger,“After the Fires, Timber Industry Faces ‘Generational’ Losses,” November 22, 2020.

[26] USITC DataWeb/Census, HTS subheading 4401.31, accessed August 2, 2021.

[27] Ireland, “International Trade in Wood Pellets,” September 2018.

[28] Flach, “Dutch Wood Pellet Imports Surge,” May 26, 2020.

[29] Staub, “Paper and Plastic Exports Drop Again in 2020,” February 5, 2021.

[30] Alderman, “United States Forest Products Annual Market Review,” October 2020, 14.

[31] Random Lengths, “Random Lengths Weekly Report: Lumber Price Guide,” September 18, 2020.

[32] USITC DataWeb/Census, digest FP002, accessed July 1, 2021.

[33] Meyer, “Why Dead Trees Are ‘the Hottest Commodity,’” April 27, 2021.

[34] Ekstrom, “The US is Increasingly Dependent on Overseas Lumber,” January 18, 2021.

[35] Alderman, “United States Forest Products Annual Market Review,” October 2020, 14.

[36] Random Lengths, “Random Lengths Weekly Report: Lumber Price Guide,” September 11, 2020.

[37] USITC DataWeb/Census, digest FP004, accessed July 1, 2021.

[38] Random Lengths, “Random Lengths Weekly Report: Panel Price Guide,” September 18, 2020.

[39] IbisWorld, “IBISWorld—Industry Market Research,” accessed May 12, 2021.

[40] USITC DataWeb/Census, digest FP016, accessed July 1, 2021.

[41] USITC DataWeb/Census, digest FP015, accessed July 1, 2021.

[42] USITC DataWeb/Census, digest FP009, accessed July 1, 2021.

[43] Nguyen, “Vietnam Rises to Second Spot,” October 1, 2020.

[44] Kirk, “COVID-19 Hitting South Korea Hard,” May 13, 2020; Kazmin, “India’s Exporters Face Crunch,” April 8, 2020.

 

Bibliography — Forest Products

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Dilshad, Mohd. “UP Paper Mills Feel Heat as Covid Hits Waste Paper Imports from Europe, US.” The Times of India, November 30, 2020. https://timesofindia.indiatimes.com/city/meerut/up-paper-mills-feel-heat-as-covid-hits-waste-paper-imports-from-europe-us/articleshow/79479867.cms.

Ekstrom, Hakan. “The US Is Increasingly Dependent on Overseas Lumber Supply as Canadian Softwood Lumber Production Continues to Decline.” Wood Resources International LLC, January 18, 2020. https://news.cision.com/wood-resources-international-llc/r/the-us-is-increasingly-dependent-on-overseas-lumber-supply-as-canadian-softwood-lumber-production-co,c3266538.

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Flach, Bob. “Dutch Wood Pellet Imports Surge to a New Record in 2019.” U.S. Department of Agriculture (USDA) GAIN Report, May 26, 2020. https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Dutch%20Wood%20Pellet%20Imports%20Surge%20to%20a%20New%20Record%20in%202019_The%20Hague_Netherlands_05-16-2020.

IBISWorld. “Industry Market Research, Reports, and Statistics.” Accessed May 12, 2021. https://www.ibisworld.com/default.aspx.

Ireland, Robert. “International Trade in Wood Pellets: Current Trends and Future Prospects.” U.S. International Trade Commission (USITC), Executive Briefings on Trade, September 2018. https://www.usitc.gov/publications/332/executive_briefings/wood_pellets_ebot_final.pdf.

Kazmin, Amy. “India’s Exporters Face Crunch as Coronavirus Pummels Economy.” Financial Times, April 8, 2020. https://www.ft.com/content/bbbfec9f-6880-4f7e-9d38-497f34788037.

Kirk, Donald. “COVID-19 Hitting South Korea Hard as Economy Contracts and Exports Tumble.” Forbes, May 13, 2020. https://www.forbes.com/sites/donaldkirk/2020/05/13/covid-19-hitting-south-korea-hard-as-economy-contracts-and-exports-tumble/.

Lauriat, George. “The ‘Misery Whip’: The Ongoing US-Canada Lumber Dispute Just Doesn’t Cut It.” American Journal of Transportation, September 29, 2020. https://ajot.com/premium/ajot-the-misery-whip-the-ongoing-us-canada-lumber-dispute-just-doesnt-cut-it.

Meyer, Robinson. “Why Dead Trees Are ‘the Hottest Commodity on the Planet.’” The Atlantic, April 27, 2021. https://www.theatlantic.com/science/archive/2021/04/climate-origins-massive-lumber-shortage/618727/.

Mongelluzzo, Bill. “Top US Shippers: Recyclables Exporters Bracing for Large Drops in Supply, Demand.” The Journal of Commerce, June 3, 2020. https://www.joc.com/maritime-news/top-us-shippers-recyclables-exporters-bracing-large-drops-supply-demand_20200603.html.

Muhammad, Andrew. “The US Timber Industry Has Been Crippled by Double Whammy of Trade War and Covid-19.” Quartz. November 20, 2020. https://qz.com/1934494/us-timber-industry-has-been-crippled-by-trade-war-and-covid-19/.

Nguyen, Trinh. “Vietnam Rises to Second Spot in Share of US Imports: Jungle Scout.” Vietnam Briefing, October 1, 2020. https://www.vietnam-briefing.com/news/vietnam-rises-second-spot-in-share-us-imports-jungle-scout.html/.

Powell, Mike. “Louisiana Timber Losses from Hurricane Laura Surpass $1.1 Billion.” Forest2Market, October 1, 2020. https://www.forest2market.com/blog/louisiana-timber-losses-from-hurricane-laura-surpass-1.1-billion.

Random Lengths. “Random Lengths Weekly Report: Lumber Price Guide.” Random Lengths, September 11, 2020. (subscription required). https://www.risiinfo.com/product/random-lengths-weekly-report/.

Random Lengths. “Random Lengths Weekly Report: Panel Price Guide.” Random Lengths, September 18, 2020. (subscription required). https://www.risiinfo.com/product/random-lengths-weekly-report/.

Scott, Sarah, and Robert Ireland. “China’s Recycled Wastepaper Import Policies: Part 2 Economic Effects and Implications for Associated Industries.” United States International Trade Commission (USITC), Executive Briefings on Trade, November 2019. https://www.usitc.gov/publications/332/executive_briefings/ebot_trade_in_wastepaper.pdf.

Sickinger, Ted. “After the Fires, Timber Industry Faces ‘Generational’ Losses and Longer-Term Supply Questions.” The Oregonian, November 23, 2020. https://www.oregonlive.com/wildfires/2020/11/after-the-fires-timber-industry-faces-generational-losses-and-longer-term-supply-questions-of-supply.html.

Staub, Colin. “China’s Overall Paper Imports Dropped Another 39% Last Year.” Resource Recycling News (blog), January 28, 2020. https://resource-recycling.com/recycling/2020/01/28/chinas-overall-paper-imports-dropped-another-39-last-year/.

Staub, Colin. “Paper and Plastic Exports Drop Again in 2020.” Resource Recycling News (blog), February 5, 2021. https://resource-recycling.com/recycling/2021/02/05/paper-and-plastic-exports-drop-again-in-2020/.

Taylor, Brian. “India’s Recycling Market Hits the Reset Button.” Recycling Today, July 27, 2020. https://www.recyclingtoday.com/article/india-covid-19-recovery-recycling-shipping/.

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U.S. International Trade Commission (USITC). Shifts in U.S. Merchandise Trade, 2015 (2015 Trade Shifts). USITC Publication 4641. Washington, DC: USITC, September 2016. https://www.usitc.gov/research_and_analysis/trade_shifts_2015/index.htm.

U.S. Trade Representative (USTR). “Economic and Trade Agreement between the Government of the United States of America and the Government of the People’s Republic of China (Phase One Agreement).” January 15, 2020. https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china/phase-one-trade-agreement/text.