Could This be the Bottom?

It gets to the point I don’t want to look at my “Google Alerts” because I afraid I’ll hear about more mill closers. Today was one of the worst— four mill closures:

• Plum Creek is permanently closing the Pablo, Mont. Mill.

• Plum Creek is also closing the Columbia Fall Pine board mill and the Evergreen stud mill (at least for 60 days and possibly longer based on market conditions)

• Weyerhaeuser is closing its Bay City log export facility in Aberdeen, Wash.

How bad can it get?

I have to believe we are near the end — in part because it’s hard to imagine it can the market can drop any further. It appears Hank Ketcham, president of West Frasier Timber, holds the same opinion. In the Vancouver Sun he stated:

“It’s really hard for me to believe it could get worse. It just can’t keep going on like this,” Ketcham said in a conference call with financial analysts.

What do the experts say?

The Western Wood Products Association forecasts not-to-distant turnaround.

It estimates 432,000 houses will be started in 2009, down more than half from 2008 totals and one-fifth of what was built in 2005.

The volume of lumber used in new home construction is expected to total 5.3 billion bd. ft. in 2009, compared to the 27.6 billion bd. ft. in 2005.

In 2010, housing is forecast to improve modestly to 553,000 starts, bringing lumber consumption to nearly 30 billion bd. ft. WWPA does not expect housing starts to exceed 1 million units until 2012.           

Tags: lumber, mills, recession