Forest Products Industry Hit Hard by COVID-19 Impacts

SEATTLE (Scrap Monster): The forest products industry has been badly hit by the outbreak of COVID-19 pandemic. The impacts are likely to last for at least two to three years.

The projected dip in housing starts is expected to lead to massive slowdown in lumber demand and production during H2 2020 and the initial three quarters of 2021. The shortage of workers is likely to impact new tree planting. The pallet and ties consumption may face headwinds at least until Q3 2021, due to anticipated national and global economic recession. The pickup in home remodelling activities will result in mild recovery in hardwood and softwood consumption in 2021.

The pulp demand is likely to witness mixed trends. The sanitary paper markets may see big boom. However, markets for finished paper, containers and packaging markets are expected to report weakness, in comparison with 2019. The wood products trade across the globe is likely to remain curtailed at least until mid-2021, after which a slow recovery may likely happen. Meantime, trade will experience most severe declines in Q3 and Q4 this year.

A recovery in forest products industry is highly correlated with recovery in U.S. economy. Incidentally, market experts project nearly 8% decline in U.S. GDP during the current year.

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